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Sovereign Wealth Funds Briefing - Category | Fund Profile/New Launches more

Shale gas: George Osborne proposes north of England fund

Posted on 10 November 2014 by VRS  |  Email |Print

Shale gas extraction revenues could be held in a “sovereign wealth fund” for the north of England, the chancellor has said. George Osborne told BBC Radio 4’s Today programme the fund would be a way of “making sure money is not squandered on day-to-day spending”.
Friends of the Earth’s Helen Rimmer said it was “a desperate attempt to win over communities”. The idea will be discussed in the House of Lords on Monday. Possible sites for the extraction of shale gas have been identified across the north of England, with test drilling licences granted in Lancashire, Cheshire, Merseyside and Greater Manchester………………………………………..Full Article: Source

Australia missed a chance to set up wealth funds, says Asciano chairman

Posted on 10 November 2014 by VRS  |  Email |Print

ASCIANO chairman and BHP Billiton director Malcolm Broomhead says Australia to some extent wasted the decade-long commodities boom by failing to establish a sovereign-wealth fund and follow the likes of Norway. But the resources industry veteran says a fund is still needed to tackle looming demographic changes and that industry cost structures need to change to be able to establish one.
Mr Broomhead, speaking after a recent Australian Futures Project panel session at La Trobe University in Melbourne, said Australia had been through a “decade of decadence”. “We’ve ended up with the highest cost structure, albeit with the highest standard of living in the world, making it twice as expensive to stevedore a ship here as it is in New Zealand,” he told The Australian………………………………………..Full Article: Source

Super Fund defends investment policy

Posted on 04 November 2014 by VRS  |  Email |Print

The New Zealand Superannuation Fund is defending its investment decisions, saying it is putting more money than ever into domestic investments. A Singapore government fund has struck a multi-million dollar deal for a stake in buildings on Auckland’s waterfront, prompting the Property Council to suggest the Superannuation Fund’s focus is offshore and IT should invest more in domestic commercial property.
But the Fund says the amount it has invested in New Zealand grew from $2.4 billion in 2009 to $3.8 billion in September. It says it has a highly disciplined approach to selecting the best investment opportunities for its purpose, which is to maximise long-term returns without undue risk………………………………………..Full Article: Source

Who is behind Bridge Partners, PKR lawmaker asks of firm appointed to manage 1MDB funds

Posted on 04 November 2014 by VRS  |  Email |Print

A lawmaker has raised questions over 1Malaysia Development Bhd (1MDB) move to appoint a little-known Hong Kong based firm to manage its US$2.3 billion, or RM7.4 billion, funds.
Rafizi Ramli (PKR - Pandan) said the sovereign fund’s move to appoint Bridge Partners raised eyebrows, as very little information is known about the company. “This is a pertinent matter because RM7.4 billion worth of public money is managed by a company not subjected to our laws……………………………………….Full Article: Source

Time govt rolls out own Sovereign Wealth Fund

Posted on 04 November 2014 by VRS  |  Email |Print

There has been a significant increase in the number of sovereign wealth funds (SWFs), especially in Africa over the last decade. An SWF is a state-owned investment fund composed of financial assets such as stocks, bonds, real estate, or other financial instruments funded by foreign exchange assets.
There are currently 51 SWFs with combined assets in excess of US$4 trillion. The Abu Dhabi Investment Authority (Adia) is the largest SWF with assets in excess of US$620 billion. Adia was established in 1976 to manage excess earnings from the oil sector………………………………………..Full Article: Source

Tanzania: Govt to establish natural resource Fund

Posted on 27 October 2014 by VRS  |  Email |Print

To ensure that ongoing gas exploration and subsequent planned production benefits the country, the Ministry of Energy and Minerals is to create a Sovereign Wealth Fund (SWF) that will serve as a catalyst for future national development projects fueled by the gas and oil sectors.
Addressing stakeholders at the Tanzania Oil and Gas Conference and Exhibition (TOGACE) mid week in Dar es Salaam, Deputy Minister Masele also announced plans to table a bill in parliament geared at controlling expenditure of revenue collected from natural resources. The Deputy Minister warned that Tanzania may suffer an economic recession should it commit itself to gas production expenditures instead of development projects………………………………………..Full Article: Source

Tanzania: Special fund to cater for natural resource earnings

Posted on 24 October 2014 by VRS  |  Email |Print

The government is planning to establish an investment fund, Sovereign Wealth Fund (SWF), to serve as a catalyst for national development by diversifying the economy through the use of revenues from such natural resources as oil and gas. Deputy Energy and Minerals Minister Stephen Masele said in Dar es Salaam on Wednesday that the ministry would introduce a motion on SWF Act in the upcoming National Assembly session in November.
“The fund will be used to control expenditure of the revenues collected from natural resources, including oil and gas,” said Mr Masele during a Tanzania Oil and Gas Conference and Exhibitions (TOGaCE)………………………………………..Full Article: Source

Tory Peer Proposes Sovereign Wealth Fund Amendment to UK Infrastructure Bill

Posted on 24 October 2014 by VRS  |  Email |Print

Lord Hodgson of Astley Abbotts, a Tory peer, proposed an amendment to the UK infrastructure bill. In it, Hodgson entails the formation of a soverign wealth fund being funded by shale gas revenue. Hydraulic fracturing, also known as fracking, could provide the UK with a boom in energy revenue.
According to the Associated Press (AP), Lord Hodgson issued the following statement:“You could argue this is akin to an everlasting pension fund for UK plc. Norway has an extremely successful sovereign wealth fund and as a result Norwegian government bonds are some of the most sought after and highly rated in the world. A British sovereign wealth fund might not just help the country in the long run, it might also improve our financial stability in the short run”……………………………………….Full Article: Source

Zambia needs wealth fund

Posted on 22 October 2014 by VRS  |  Email |Print

In the 2015 national budget Government, through the Ministry of Finance, has set aside K100 million towards the creation of a sovereign wealth fund. Minister of Finance Alexander Chikwanda has proposed that the fund be housed by Zambia’s nascent investment vehicle, the Industrial Development Corporation (IDC).
The Bank of Zambia (BoZ) has, however, suggested that it houses the fund. Deputy Governor for Administration Mabula Kankasa recently said the central bank has taken this position after studying a number of sovereign wealth funds around the world………………………………………..Full Article: Source

1MDB not national sovereign wealth fund? What is it, then?

Posted on 17 October 2014 by VRS  |  Email |Print

Prime Minister Datuk Seri Najib Razak’s controversial pet cash cow spin, 1Malaysia Development Berhad (1MDB), has denied that it is the country’s second national Sovereign Wealth Fund (SWF), after Khazanah Nasional. In an Oct 9 posting on its webpage titled “Frequently asked questions (FAQ) about 1MDB”, it reiterated that 1MDB was a strategic development company, wholly owned by the federal government, specifically the Finance Ministry.
So, 1MDB belongs to the government, rakyat and Malaysia, right? But it is not a SWF?Well, then let’s make way for 1MDB, initially set up as the Terengganu Investment Authority in 2009, to split hairs on what it really is………………………………………..Full Article: Source

Sovereign wealth fund should sit at BoZ-Deputy Governor

Posted on 17 October 2014 by VRS  |  Email |Print

The Bank of Zambia has suggested that the proposed setting up of a sovereign wealth fund should be housed at the central bank. Finance Minister Alexander Chikwanda announced during the budget presentation that K100 million was allocated for the establishment of a sovereign wealth fund and suggested that the fund will be housed under the Industrial Development Corporation.
But Bank of Zambia Deputy Governor for Administration Dr Mabula Kankasa said it would be prudent if the fund was managed by the central bank. She was speaking on Wednesday when she led a team from the Bank of Zambia in making a presentation to the Expanded Estimates Committee on the 2015 national budget at Parliament buildings………………………………………..Full Article: Source

Transparency key to Zim’s wealth fund

Posted on 14 October 2014 by VRS  |  Email |Print

Zimbabwe must be transparent and accountable to its citizens with the newly established Sovereign Wealth Fund (SWF), a leading South African banker has said. Nesbert Ruwo, an investment banker said the country needs to engage its people first before it rushes to create the wealth fund.
“The key ingredients to a successful SWF include transparency and accountability. Citizens, who are the ultimate beneficiaries, need to be appraised continuously before and after a SWF is set up. Public awareness and support is of paramount importance,” he said………………………………………..Full Article: Source

Zim rushes to create sovereign fund

Posted on 13 October 2014 by VRS  |  Email |Print

Sovereign Wealth Funds have been attracting a lot of attention in recent years as more countries establish funds and invest more capital in a wide range of assets. At least US$6 trillion in assets are being held by these funds globally. But the question is, should every country set up their own and for what purpose? Is there a rationale to rush to join the bandwagon?
A sovereign wealth fund (SWF) is a fund owned by the state that is invested in various financial assets (such as shares, fixed income instruments, and properties). A SWF is a form of a national savings account with a specific purpose(s), but mainly for the benefit of its current and future citizens………………………………………..Full Article: Source

Protect, grow permanent fund for the future

Posted on 10 October 2014 by VRS  |  Email |Print

The state’s Land Grant Permanent Fund will distribute almost $600 million this year to New Mexico schools and other beneficiaries, a year-over-year increase of more than $60 million. In fiscal year 2016, we expect the Land Grant Permanent Fund and our other permanent endowment, the Severance Tax Permanent Fund, will distribute as much as $850 million in funding to benefit public schools and pay for government services.
While many New Mexicans are unaware of these benefits, without them, we would all be paying much higher taxes. As members of the State Investment Council, we ask for your vote on Nov. 4 for Constitutional Amendment 5. Amendment 5 will allow us as fiduciaries to better manage the Land Grant Permanent Fund, and should have a long-lasting and valuable impact on the state’s investment returns………………………………………..Full Article: Source

Sovereign wealth fund option to diversify Macau economy

Posted on 09 October 2014 by VRS  |  Email |Print

In recent months the government and lawmakers have been discussing creating a sovereign wealth fund. A sovereign wealth fund was also suggested as an option by the International Monetary Fund (IMF) in its July 2014 staff report. Under Article 4 of the IMF Articles of Agreement – which sets out the obligations of members regarding exchange arrangements – the IMF conducted a consultation with Macau, the first since the handover of sovereignty in 1999.
The staff report describes Macau’s economy as open and tourism dependent. Macau has no public debt and noteworthy fiscal reserves. The Macau financial system was highly commended in the report and the outlook appeared bright. Notwithstanding this, the IMF pointed out some changes that might occur in this framework in future………………………………………..Full Article: Source

Boris Johnson: Britain needs ‘gigantic’ SWF to help build new roads

Posted on 06 October 2014 by VRS  |  Email |Print

Britain’s public sector pensions should be merged to create “gigantic” sovereign wealth fund which can invest in the roads, railways and airports that “this country is crying out for”, Boris Johnson has said.
The Mayor of London said that there has been an “ontological explosion” of pension fund managers who each have “their little jaws wrapped blissfully around the giant polymammous udder of the state”. He said that pensioners would enjoy higher incomes if Britain’s 39,000 public sector funds were merged to create a “citizen’s wealth fund” which could invest in major infrastructure to help stimulate Britain’s economy………………………………………..Full Article: Source

Norway’s Central Bank to Buy Kroner for Oil Fund in October

Posted on 01 October 2014 by VRS  |  Email |Print

In an unusual move, Norway’s central bank said on Tuesday it would buy Norwegian kroner and sell foreign exchange in the market in October on behalf of the country’s sovereign-wealth fund, sending the krone higher against the euro.
Norges Bank said it would sell the equivalent of 250 million Norwegian kroner ($38.8 million) a day in October. The central bank announces on the last working day of each month how much foreign currency it will buy or sell in the following month but hasn’t bought or sold foreign currency in this way since October 2013, when it sold kroner………………………………………..Full Article: Source

Suffering Wealth and Sovereign Wealth

Posted on 29 September 2014 by VRS  |  Email |Print

The Excess Crude Account (ECA), which was set up by former President Olusegun Obasanjo under the inspiration of Dr. Ngozi Okonjo-Iweala in 2004, was the saving grace. Nigeria would have lapsed into a catastrophic economic downturn. Yet, when Obasanjo set up ECA, governors kicked against it, describing it as unconstitutional. All money must be shared, they said.
If Obasanjo had caved in, there would have been nothing to fall back on in 2009 when the crunch set in. We still make use of it till today. So much for constitionalism. ECA is, of course, not the same thing as SWF. ECA simply saves the difference between the budgeted and the actual prices of crude oil. It is a stabilisation fund, summoned when it is needed, especially by the governors who continue to wave the constitution in our face anything they crave raw cash. SWF, on the other hand, is primarily an investment………………………………………..Full Article: Source

Temasek ‘a company like no other’

Posted on 25 September 2014 by VRS  |  Email |Print

Its beginnings were modest and fraught with risk but when Temasek Holdings held its 40th anniversary dinner last night, it had become, in the words of President Tony Tan Keng Yam, “a company like no other”.
In his keynote speech, Dr Tan said the investment firm was an “experiment born out of necessity” and had transformed itself into a Singapore institution that “epitomises a culture of constant hard work and ceaseless innovation to build for the future”. Last night, plenty of well-wishers gathered to mark that singular achievement over the past 40 ground-breaking years………………………………………..Full Article: Source

PNG’s Sovereign Wealth Fund: still too many loose ends

Posted on 23 September 2014 by VRS  |  Email |Print

If it’s going to proceed with it, the government would do well to announce specific plans for the Sovereign Wealth Fund before the year is out. Since August, government ministers have hinted that we might soon see an update on the state of Papua New Guinea’s Sovereign Wealth Fund (SWF). Despite the recent parliament sitting, the government’s plans remain unclear. We wait for the answers to two important questions:
When will the Sovereign Wealth Fund be finalised and implemented? Will the operational rules and responsibilities, and the overall role of the Sovereign Wealth Fund, actually be what they said it would be at the outset? With PNG’s LNG exports now regularly reaching Japan’s shores, the government should be ready to answer these questions………………………………………..Full Article: Source

Economists release new analysis of a ‘Scottish Oil Fund’

Posted on 19 September 2014 by VRS  |  Email |Print

A new economic analysis of a potential Scottish Oil or Sovereign Wealth Fund has found that Scotland could earn the same from the fund as current revenues from North Sea oil and gas tax receipts. The new economic outlook found that Scotland could have amassed a fund worth between £73.64 billion and £147.28 billion in 24 years, the same time as the Norwegian Oil Fund has been running.
The economic analysis found that the Scottish Oil Fund would bring in an annual income of between £2.9 billion and £5.8 billion respectively in today’s prices, the same amount as current estimated tax receipts from North Sea oil and gas revenues……………………………………..Full Article: Source

Scottish oil fund ‘would be worth billions’

Posted on 18 September 2014 by VRS  |  Email |Print

A Scottish sovereign wealth fund could produce a recurring oil income worth billions to an independent Scotland, according to a new analysis. The economic outlook found that if only £1.2 billion was invested each year into an oil fund and delivered similar growth to the Norwegian Fund, then Scotland could expect a fund worth £73.64 billion in 24 years.
Rather than be directed to tax revenues, the fund would continue to grow year on year with revenues from the North Sea and investment returns reinvested, the report argued. Oilandgaspeople.com chief executive Kevin Forbes said the analysis suggested that Scotland could create ”a never-ending supply of funds derived from North Sea oil and gas” if it were to establish a national oil fund…………………………………..Full Article: Source

Oil fund post-Yes vote ‘could reach £147bn’

Posted on 18 September 2014 by VRS  |  Email |Print

Scottish independence: An independent Scotland could amass an oil fund that would “never run out” and reach £147 billion within 25 years of a Yes vote, according to new research. The SNP Government wants to set up a Norwegian style fund and a report by leading North Sea employment firm oilandgaspeople.com finds it could eventually bring in an income of between £2.9 billion and £5.8 billion - the same amount as North Sea taxes alone.
Kevin Forbes, of oilandgaspeople.com said: “The significance of this shouldn’t be underestimated. If Scotland invests now for the future, it could find itself with a never-ending supply of funds derived from North Sea oil and gas. In other words, the oil and gas money will never run out.”…………………………………..Full Article: Source

Look at Norway’s independence example

Posted on 18 September 2014 by VRS  |  Email |Print

Norway’s oil discovery happened at much the same time, but there was a significant difference in the way the Norwegians dealt with the wealth that came with the striking of black gold. The state has retained control of the Norwegian oil industry, and set up a sovereign wealth fund to use its oil income to best effect.
The fund, set up in 1990, was valued at NOK1,234bn (£119bn) on 1 January 2014 and is expected to be worth around $1 trillion by 2020. The capital itself, however, is never touched to cover state spending……………………………………Full Article: Source

Moody’s applauds Khazanah’s key role in national development

Posted on 18 September 2014 by VRS  |  Email |Print

Moody’s Investors Service has commended Khazanah Nasional Bhd over the key role it plays in national development through continuous strategic investment. It said Khazanah’s leading role in the Malaysian Airlines restructuring plan illustrated the potential impact of sovereign wealth funds on debt sustainability.
“As part of our Sovereign Bond Ratings methodology, we regard Khazanah, Malaysia’s sovereign wealth fund as supporting the country’s rating,” Moody’s said in its ‘Credit Analysis on Malaysia’ report. Khazanah, an investment arm of the Malaysian government, held assets worth RM135.1 billion (13.7 per cent of the gross domestic product - GDP) at the end of 2013……………………………………Full Article: Source

Why 1MDB is often misunderstood

Posted on 17 September 2014 by VRS  |  Email |Print

Its corporate tagline “Forging partnerships, advancing growth” is clearly visible on the hoarding boards at the site of the future Tun Razak Exchange. As work goes on unassumingly to lay the groundwork for Malaysia’s international financial district, the world is watching anxiously to see the kind of growth its master developer 1Malaysia Development Bhd (1MDB) will be advancing.
In the two years since the project has been launched, the relocation process has been smooth, the ground work is in progress, the MRT station on its site begins to take shape, and it has recently announced Lend Lease of Australia and Exim Bank of China as investors. 1MDB’s substantial energy assets have also attracted scrutiny, especially with all the talk of imminent listing…………………………………Full Article: Source

Angola’s Sovereign Wealth Fund Is Underway

Posted on 16 September 2014 by VRS  |  Email |Print

Announced in 2008, established in 2012, and receiving the final installment of its initial endowment in June of this year, Fundo Soberano de Angola (Angola’s sovereign wealth fund) finally has progressed to investing its $5 billion in assets. In a series of recent interviews, fund Chairman José Filomeno Dos Santos has been detailing how the fund’s portfolio will be diversified and answering questions about its governance structure.
The guiding principle of the fund will be to “[pursue] investments that generate long-term and sustainable financial returns” and, in turn, use that wealth “to promote growth, prosperity and social and economic development across Angola” and sub-Saharan Africa more broadly. To accomplish these goals, up to one third of the $5 billion fund will be put into alternative investments across sub-Saharan Africa………………………………………..Full Article: Source

NZ: Cunliffe unveils sovereign wealth fund policy

Posted on 15 September 2014 by VRS  |  Email |Print

A Labour Government would establish a sovereign wealth fund to invest in new businesses, including clean energy projects using dividend cash from the remaining stakes in mixed ownership model companies and higher oil and gas royalties, leader David Cunliffe says.
Mr Cunliffe this morning unveiled his party’s ‘NZ Inc’ policy which he said would “drive growth, boost clean technology and protect our strategic assets to achieve our goal of a smarter, cleaner, fairer economy”. The policy’s three key aims were to “drive sustainable growth, support the transition from fossil fuels to clean technology and enshrine New Zealand ownership of our strategic assets”………………………………………..Full Article: Source

Labour’s late call for a sovereign wealth fund

Posted on 15 September 2014 by VRS  |  Email |Print

Its announcement of the NZ Inc fund, a sovereign wealth-type fund, would be seeded in the first instance by $100 million a year in dividend income from the government’s ongoing ownership of partially privatised electricity and airline assets, and from any other state-owned companies that happen to turn a profit.
However, that would be the tip of the iceberg, with funds in the longer term coming from royalties earned by companies extracting oil, gas and minerals from New Zealand territory. The big missing piece in Labour’s analysis is how much it would raise royalties. It says Australian royalty rates are higher and would provide a benchmark, but there are no accompanying numbers………………………………………..Full Article: Source

Kenya to establish sovereign wealth fund

Posted on 15 September 2014 by VRS  |  Email |Print

Kenya is fast tracking the establishment of the National Sovereign Wealth Fund (NSWF) that will invest with revenues from the country’s natural resources, the presidency said in a statement on Friday.
It said the framework for the commodities based on the NSWF will be developed through the Sovereign Wealth Fund bill 2014. “Stakeholders are currently reviewing the NSWF Bill, which will soon be tabled in parliament,” the President’s Chief of Staff Joseph Kinyua said. The law will provide guidelines on how and under what conditions money will be withdrawn from the fund………………………………………..Full Article: Source

‘Blurred lines’ on Angolan wealth fund

Posted on 12 September 2014 by VRS  |  Email |Print

The launch of Angola’s $5-billion sovereign wealth fund was hailed as a major step in the country’s post-war economic development and asset managers from around the world licked their lips in anticipation of an opportunity to work with Africa’s second-biggest oil producer.
Nearly two years on from its high-profile beginning in October 2012, the Fundo Soberano de Angola (FSDEA) is still regarded in investor circles as a tantalising opportunity, but it is dogged by a number of unanswered questions. First, there is the discomfort around the fund being chaired by José Filomeno dos Santos, the eldest son of Angola’s president José Eduardo, who since 1979 has led one of Africa’s most corrupt countries where vast oil revenues have done little to address grinding poverty………………………………………..Full Article: Source

Malpass: Fed Risks Turning Its Balance Sheet Into Sovereign Wealth Fund

Posted on 10 September 2014 by VRS  |  Email |Print

David Malpass, president of Encima Global Research firm, isn’t too impressed with the Federal Reserve’s decision to maintain a huge balance sheet for years and to refrain from an interest-rate hike until at least next year.
The Fed’s balance sheet has bulged to $4.5 trillion through quantitative easing, and it has kept its federal funds rate target at a record low of zero to 0.25 percent since December 2008. “Far from being neutral or stimulative, these policies have caused huge distortions in financial markets, contributing to slow growth and falling median incomes,” Malpass writes in The Wall Street Journal………………………………………..Full Article: Source

Super fund governance overdue for overhaul

Posted on 09 September 2014 by VRS  |  Email |Print

When the Coalition came to power a year ago it promised a big shake-up in the corporate governance standards of the country’s $1.6 trillion superannuation. Fast forward to today and the Abbott government has made haste to dilute the Future of Financial Advice (FOFA) reforms after some heavy lobbying by the big financial institutions.
But issues of corporate governance seem to have ground to a halt. These include the composition of superannuation fund boards and the role of default funds in the modern award system - areas which have rightly attracted a lot of heated debate in the past few years………………………………………..Full Article: Source

Can Scotland Really Be as Rich as Norway?

Posted on 09 September 2014 by VRS  |  Email |Print

Scotland’s pro-independence politicians are putting considerable faith in oil. Probably too much. One of the touchstones for the independence movement is that with control of its share of North Sea oil and gas revenue, Scotland could become rich in its own right, like Norway.
But the numbers don’t quite stack up if Scotland plans to create a nest egg like Norway’s sovereign wealth fund, a near $900 billion investment portfolio built up since 1990……………………………………….Full Article: Source

The Fed Is Looking Like a Sovereign Wealth Fund

Posted on 08 September 2014 by VRS  |  Email |Print

The Federal Reserve recently made clear it is planning to maintain its enormous balance sheet—roughly $4.5 trillion in Treasurys and mortgage-backed securities—for many years, while keeping interest rates near zero at least into 2015. Far from being neutral or stimulative, these policies have caused huge distortions in financial markets, contributing to slow growth and falling median incomes.
Given the tendency of government programs to expand and become permanent, the risk now is that the Fed’s large pool of assets and liabilities evolves into a semi-permanent government-controlled investment fund, a U.S. version of the sovereign-wealth funds created by other governments………………………………………..Full Article: Source

Inside Angola’s Sovereign Wealth Fund

Posted on 08 September 2014 by VRS  |  Email |Print

Ready to invest. The fund received the last part of its $5 billion endowment in June, and has put the whole lot to work, albeit so far mainly in listed securities (chiefly cash and bonds, but some listed equities too). It is now beginning to invest in alternatives.
Target allocation. Dos Santos told me the aim is to put one third of the fund’s assets into liquid securities (a figure that can never drop below 20%), one third into alternative investments in sub-Saharan African, and one third into what he called “opportunistic investments internationally: distressed assets that the fund could take advantage of, spin around and refocus.”……………………………………….Full Article: Source

Ho Iat Seng: Consider options ahead of Macau sovereign fund

Posted on 26 August 2014 by VRS  |  Email |Print

The President of the Legislative Assembly says that before a fund is created other options should be considered, as the first may be too risky. The President of the Legislative Assembly, Ho Iat Seng, said that if the government of Macau decides to create a sovereign wealth fund it must act very carefully, as times are very unstable for investment.
“I’m always concerned about the return rates of sovereign funds. These days, the return rates are low. I believe that if it is decided to create a sovereign fund it will require us to be very prudent”, Mr. Ho Iat Seng said during a meeting with journalists for the annual report of the legislative year………………………………………..Full Article: Source

Ho Iat Seng: Consider options ahead of Macau sovereign fund

Posted on 25 August 2014 by VRS  |  Email |Print

The President of the Legislative Assembly says that before a fund is created other options should be considered, as the first may be too risky.The President of the Legislative Assembly, Ho Iat Seng, said that if the government of Macau decides to create a sovereign wealth fund it must act very carefully, as times are very unstable for investment.
“I’m always concerned about the return rates of sovereign funds. These days, the return rates are low. I believe that if it is decided to create a sovereign fund it will require us to be very prudent”, Mr. Ho Iat Seng said during a meeting with journalists for the annual report of the legislative year. He also recalled his experience, back in 2007, when he was involved in the decision to create the China Investment Corporation, a sovereign wealth fund that manages part of the People’s Republic of China’s foreign exchange reserves………………………………………..Full Article: Source

India: Set up sovereign wealth fund to manage investments in PSUs

Posted on 25 August 2014 by VRS  |  Email |Print

Apex public sector enterprises body SCOPE today suggested setting up a sovereign wealth fund to manage investments in state-owned units. “Globally, many countries have created sovereign wealth fund or sovereign holding structure for their state-owned enterprises for improving governance and deliverability.
“Therefore, there is need for structural change which could be arrived at by wide deliberations between academicians, researchers, professional and government and people at large. This would help in improving corporate governance practices and far better professionalization,” Standing Conference of Public Enterprises (SCOPE) Director General U D Choubey said in a statement………………………………………..Full Article: Source

ORTEL: Create an American sovereign wealth fund

Posted on 22 August 2014 by VRS  |  Email |Print

In America, the cradle of capitalism, we need to have a sovereign wealth fund. Capitalized with at least $1 trillion in the beginning, our fund should be the largest, most forward-looking and most successful one in the world. If run independently (without partisan influence) by credentialed managers who might contribute their service gratis, America’s Sovereign Wealth Fund would produce consistent and outsized rates of return on invested capital.
Under exceptional management, our fund could grow in size to levels that might help reassure our foreign creditors, as these must already be more than worried given the size of America’s total debt, and our demonstrated pattern of bipartisan profligacy………………………………………..Full Article: Source

IMF Urges SWF for China’s Casino City

Posted on 14 August 2014 by VRS  |  Email |Print

Macau has been urged to create a sovereign wealth fund (SWF) and invest the billions in profits made from its engorged gambling industry. The International Monetary Fund (IMF) said the explosion of the betting tourism in the Special Administrative Region (SAR) since 2001 meant its government had received huge revenues over the last decade.
“To ensure that public finances remain on a sound footing as the gaming sector matures and the population ages, they recommended the adoption of a medium-term budget framework,” an IMF report on the region said………………………………………..Full Article: Source

Scottish independence and a Sovereign Wealth Fund

Posted on 11 August 2014 by VRS  |  Email |Print

EY explained in a recent report on the anticipated implications of Scottish independence for the oil and gas industry that a central theme in the debate has been the proposal from the ‘Yes’ campaign that if Scotland become independent then it should follow the approach of oil-rich countries in setting up a Sovereign Wealth Fund.
The fund would aim to enable the country to spend the wealth generated by oil and gas across the generations so that the beneficial impact is transformational to the economy in many decades time. However, its opponents insist that its creation could require tax increases and/or cuts to public expenditure…………………………………Full Article: Source

Macau urged to create SWF to invest reserves

Posted on 01 August 2014 by VRS  |  Email |Print

Macau’s government has been urged to create a sovereign wealth fund (SWF) to better manage its substantial fiscal reserves and buffer the territory against external shocks. Following a recent mission to the Chinese SAR, the International Monetary Fund (IMF) issued a report stating that the establishment of an SWF with a clear mandate would enable Macau to generate better risk-adjusted returns over a long horizon, as well as help to diversify its asset base.
According to the IMF, the territory’s fiscal reserves stood at 58.7% of its overall GDP in 2013, or close to US$30 billion. It also projected that Macau’s economy would grow by 9% this year and by 10% in 2015………………………………………..Full Article: Source

Macau: Sovereign wealth fund an option

Posted on 30 July 2014 by VRS  |  Email |Print

The International Monetary Fund thinks it’s a good idea that Macau establish a sovereign wealth fund. Anselmo Teng Lin Seng of the Monetary Authority here is well aware of the option.
Macau’s Monetary Authority president Anselmo Teng Lin Seng said that establishing a sovereign wealth fund as suggested by the International Monetary Authority is “one of the options” to further diversify the city’s reserves, although he did not confirm if such an option was a near-term goal………………………………………..Full Article: Source

BRICS Bank Is Mostly a Jointly Managed Sovereign Wealth Fund

Posted on 22 July 2014 by VRS  |  Email |Print

Because the credit ratings of Brazil, Russia, South Africa and India are not robust enough to command borrowing on the capital markets at relatively low rates, and it is only China’s economy among the BRICS that can currently support massive borrowing on the capital markets to enable relatively low-interest lending, it again points to the BRICS Bank being a SWF-like entity.
SWFs generally do not borrow on the capital markets and instead use their own corpus of funds to invest in other countries, almost never their own country. Technically, some SWFs do have the ability to borrow, but rarely do so in practice………………………………………..Full Article: Source

Managing foreign exchange reserve risks; Taiwan to consider SWF?

Posted on 21 July 2014 by VRS  |  Email |Print

Foreign exchange reserves hit a record high of US$423.45 billion in Taiwan in June and also set a new high of US$7.47 trillion in Asia. Seventy percent of the increase in foreign exchange reserves in 2013 were seen in Asia. The government, therefore, has to seriously consider measures to manage Taiwan’s huge foreign exchange reserves. We have previously suggested setting aside a part of the country’s foreign exchange reserves to establish a sovereign wealth fund.
Currently there are more than 30 countries, including Singapore, Kuwait, Brunei, Norway and the United Arab Emirates, that have set up such funds with total combined assets of US$6.321 trillion. Although Taiwan has not set up such a fund, it has one in practice. The central bank has made good use of its foreign exchange reserves in recent years, contributing about NT$200 billion a year to national coffers, helping cover fiscal deficits………………………………………..Full Article: Source

Sovereign fund could be answer for Taiwan

Posted on 21 July 2014 by VRS  |  Email |Print

Not so long ago, a third-party investment manager handling government funds caused heavy losses for Taiwan’s Labor Pension and Labor Insurance funds. Now another market trader is suspected of speculating on shares with board members of an over-the-counter listed company, causing the pension fund to lose more than NT$60 million (US$2 million).
Minister of Finance Chang Sheng-ford has suggested setting up a “Taiwan sovereign fund,” but nothing more has been done about it. If fund managers are inexpert and third-party traders keep mishandling the funds, establishing a sovereign fund could be a solution, since it could kill two birds with one stone by averting rogue trading and improving investment performance………………………………………..Full Article: Source

Bahamian govt in sovereign wealth fund plans

Posted on 18 July 2014 by VRS  |  Email |Print

The Government’s draft oil exploration legislation contains provisions for the creation of a Bahamian sovereign wealth fund, which would receive all due multi-million dollar royalty payments on any ‘black gold’ under this nation’s water.He confirmed that provisions to create a Bahamian sovereign wealth fund, which would be owned and managed by the Government on the Bahamian people’s behalf, were among the legislation being drafted.
Sovereign wealth funds, such as Singapore’s Temasek, have been established by many Middle East and Asian nations as vehicles to hold multi-billion dollars worth of assets and revenues, which are generated from sectors such as oil. These funds are then invested in productive areas of the global economy………………………………………..Full Article: Source

India: ‘No plans now to set up sovereign wealth fund’

Posted on 14 July 2014 by VRS  |  Email |Print

India is not looking to set up any sovereign wealth fund (SWF) for now, Finance Secretary Arvind Mayarm has said. “We don’t think we have reached a stage where we can now commit our forex reserves to a SWF and start investing all around the world,” he said.
Mayaram’s remarks are significant as it is the first time since the new Government assumed charge that a senior Finance Ministry official was commenting on the matter of sovereign wealth fund………………………………………..Full Article: Source

Tanzania: Sovereign Wealth Fund Formation - Dar Needs to Tread Carefully

Posted on 11 July 2014 by VRS  |  Email |Print

Tanzania is on course to establish a Sovereign Wealth Fund to manage proceeds from oil and gas finds, but experts caution that to reap maximum benefits from its resources, the country must have in place effective mechanisms to foster good governance and transparency.
The mining sector’s contribution to Tanzania’s GDP more than tripled between the mid-1990s and 2012, reaching 3.5 per cent. However, since the mining boom started in the early 1990s, the East African country has failed to transform this into wealth for communities near the mines, critics say, hence the need for the government to rectify mistakes and ensure the Sovereign Wealth Fund works for the population from grassroots………………………………………..Full Article: Source

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