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

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

Heritage fund or Slinky fund?

Posted on 10 July 2014 by VRS  |  Email |Print

The recent announcement that the Alberta Heritage Savings Trust Fund earned $2.1 billion in 2013 is great news, but don’t break out the champagne yet. While these record earnings will help relieve Alberta’s current budget deficits, they are almost meaningless in the long term — which is, or at least was, the whole point of having a heritage fund.
Why? Because under current government policy, virtually all of the fund’s realized annual earnings are transferred to general revenue for in-year spending. This means the fund’s value cannot grow as the market goes up………………………………………..Full Article: Source

Tanzania: Sovereign Wealth Fund - Call to Impose Strict Risk Limitations

Posted on 09 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 caution comes amid recent findings by the New York -based Revenue Watch Institute (RWI) and the Vale Columbia Centre on Sustainable International Investment (VCC), revealing that vast sums of money made from the extraction of oil, gas, and minerals–much of it in resource-rich countries where most citizens are nonetheless impoverished–are poorly managed and off limits from the oversight of civil society and the media…………………………………..Full Article: Source

Chan defends fund at length

Posted on 08 July 2014 by VRS  |  Email |Print

The market should disregard the short- term performance of the Exchange Fund, said Hong Kong Monetary Authority chief executive Norman Chan Tak-lam. HKMA yesterday revealed the latest official foreign currency reserve assets stand at US$320.9 billion (HK$2.5 trillion) at the end of June, up from US$320.2 billion in May.
Chan wrote in an article reviewing his work over the past five years that the fund - the reserve that the HKMA uses to defend the Hong Kong dollar - is not a sovereign wealth fund and the investment objective is not to pursue high returns.He stressed the necessity to hold enough highly liquid assets to meet short-term obligations…………………………………….Full Article: Source

Nigeria: Akwa Ibom top contributor to Sovereign Wealth Fund in 2013- MD

Posted on 07 July 2014 by VRS  |  Email |Print

Akwa Ibom State remains the highest contributor to Sovereign Wealth Fund in the Country for 2013, it has been revealed. The Managing Director/Chief Executive of the Nigerian Sovereign Wealth Investment Authority (NSIA), Mr. Uche Orji, who stated this Friday when he and his team paid Governor Godswill Akpabio a courtesy visit at Governor’s Office, Uyo, hinted that Akwa Ibom Government contributed the highest to the fund particularly counterpart funding.
Mr. Orji said they were in the state to partner the state government and invest in the state as well as be a part of the uncommon transformation of Governor Akpabio, hinting that the authority invests in real estate, agriculture, power and seaport, among others………………………………………..Full Article: Source

Romania’s Government wants to set up sovereign fund by raising private money

Posted on 02 July 2014 by VRS  |  Email |Print

The Romanian Government will start looking for investors to subscribe in the first private equity fund managed by the state, this fall, according to Mircea Geoana, senator for the Social Democratic Party (PSD). He said that this fund could gather up to EUR 4 billion. This vehicle won’t be a sovereign fund in the true sense, as most money will come from private investors, according to Wall-street.ro.
“Technically, it’s not a sovereign fund, we are following the Polish model. It is a fund that will be called Romania-Moldova. On October 2-4 this year we will make an announcement of the public offer and then we will start presenting it in a road-show and try to gather investors. The fund will be launched in 2015, because it will take at least nine months to make the necessary documentation and gather investors,” Geoana explained………………………………………..Full Article: Source

Time to launch a sovereign wealth fund: Manish Kejriwal, Temasek Holdings

Posted on 01 July 2014 by VRS  |  Email |Print

Manish Kejriwal was the senior managing director of one of the world’s largest sovereign wealth funds (SWFs), Temasek Holdings, owned by the Singapore government. A Baker Scholar from the Harvard Business School, in whose 8-year-term as the country head, the fund invested roughly $5 billion.
“I believe that the current government under the centralised leadership seems to be the one which can actually execute the concept of a sovereign wealth fund that can tick off all the required boxes and deliver as per its mandate,” Kejriwal, who now runs $500m Keedara Capital, said………………………………………..Full Article: Source

Oil fund is complete con, says energy minister

Posted on 27 June 2014 by VRS  |  Email |Print

The SNP Government’s plan for an oil fund in an independent Scotland is a “complete con”, Ed Davey has insisted. The claim came as the Energy Secretary visits Scotland today to promote the UK Government’s renewable energy plans and announce an additional £50 million to clean up nuclear waste at Dounreay in Caithness.
Last month, John Swinney made clear the Scottish Government could set up a Norwegian-style oil fund from “the point of independence” and secure an “economic bonus”, which could be delivered only by breaking away from the UK. The Scottish Finance Secretary noted that Norway’s oil fund, which began in the mid-1990s “with only modest payments”, was now the world’s largest sovereign wealth fund worth more than £500 billion………………………………………..Full Article: Source

Zimbabwe: Delay setting up sovereign fund: IMF

Posted on 26 June 2014 by VRS  |  Email |Print

The International Monetary Fund is recommending that Government delays the introduction of the Sovereign Wealth Fund saying it will add more fiscal stress to already strained accounts as the institution warned that fiscal under-performance remains the highest risk facing the economy.
In the full Article IV Concluding Statement seen by this paper, the IMF directors recommended delaying the introduction of the Sovereign Wealth Fund. “Although such a mechanism might be helpful over the medium term, the present situation of fiscal stress requires that the Government avoid imposing on itself new administrative and managerial challenges. The mission encourages the authorities to re-examine the fiscal regime for extractive industries before launching any SWF.”……………………………………….Full Article: Source

The Nigerian SWF

Posted on 18 June 2014 by VRS  |  Email |Print

Sovereign Wealth Funds (SWF) are state-owned investment funds typically (though not exclusively) funded through revenues from commodity exports or foreign exchange reserves held by central banks which invest in real and financial assets-stocks, bonds, real estate, infrastructure, precious metals or alternative investments such as private equity and hedge funds.
The term “sovereign wealth fund” was reportedly first used in 2005 by one Andrew Rozanov in an article titled, “Who Holds the Wealth of Nations?” in Central Banking Journal, even though such funds have existed for over a century. The number of SWFs has however dramatically increased in the 2000s………………………………………..Full Article: Source

Saudi’s Shoura Council Debates Sovereign Wealth Fund Plan

Posted on 12 June 2014 by VRS  |  Email |Print

A proposal to set up a Saudi Arabian sovereign wealth fund attracted debate at a meeting of the Kingdom’s influential Shura council advisory body but failed to yield a result. A report by the council’s financial committee has said the National Reserve Fund, which would invest part of the Kingdom’s vast hydrocarbon wealth, would build on its financial stability.
Details of its investment strategy have yet to be disclosed publicly, but if the proposed fund is run like the sovereign wealth funds of other wealthy Gulf states such as Qatar and Abu Dhabi, it could mean a change in the way Saudi money flows through global markets………………………………………..Full Article: Source

China Sovereign Fund Managing Director Said to Plan Fund

Posted on 11 June 2014 by VRS  |  Email |Print

Yu Bin, a former managing director at China’s sovereign wealth fund, plans to start a fund focused on Greater China equities, said three people with knowledge with the matter.
Yu resigned from Beijing-based China Investment Corp., also known as CIC, earlier this year for personal reasons, said the people, who asked not to be identified as the information is private. He will remain based in China and his long-biased fund will primarily bet on stocks whose prices are expected to rise, they said………………………………………..Full Article: Source

Saudi Arabia Planning Second Sovereign Fund

Posted on 11 June 2014 by VRS  |  Email |Print

Saudi Arabia is planning to launch a second sovereign wealth fund to invest its budget surplus, according to Arabian news sources. The country’s central bank, the Saudi Arabian Monetary Agency (SAMA), currently invests money generated by oil exports in an existing sovereign wealth fund, SAMA Foreign Holdings.
The strength of Saudi Arabia’s oil industry has helped grow this portfolio to be the third largest sovereign wealth fund in the world, behind those of Norway and Abu Dhabi………………………………………..Full Article: Source

Saudi mulls sovereign wealth fund

Posted on 10 June 2014 by VRS  |  Email |Print

Saudi Arabia’s Shura Council, an influential advisory body to the government, will discuss a proposal for the country to establish a sovereign wealth fund that would invest some of its vast oil earnings, local media reported.
The National Reserve Fund would “guarantee the financial stability of the kingdom” by investing its reserves, Saad Mareq, head of the council’s financial committee, was quoted as telling the pan-Arab Asharq al-Awsat daily on Saturday………………………………………..Full Article: Source

Saudi Arabia considers separate sovereign wealth fund

Posted on 09 June 2014 by VRS  |  Email |Print

Saudi Arabia is preparing to launch its first sovereign wealth fund to manage budget surpluses from a rise in crude prices estimated at hundreds of billions of dollars, state media reported Saturday. The central bank has managed investment of the kingdom’s foreign currency reserves until now, much of it in US Treasury bonds.
The consultative Shura Council is due to discuss a draft law for the National Reserve Fund in meetings Monday and Tuesday in Riyadh, state news agency SPA reported. The report gave no indication of whether any change in investment strategy was envisioned………………………………………..Full Article: Source

Restructuring Libya’s SWF

Posted on 06 June 2014 by VRS  |  Email |Print

The outlook for Libya is grim as it slides further into anarchy, but the African Development Bank believes that one promising area is the country’s formidable financial resources and a sovereign wealth fund that could be leveraged to help the economy.
In a recent report on Libya, the African Development Bank looked to “re-engage” with the country to seek a better understanding of economic and political developments amid political instability, threats to the survival and legitimacy of the state, and regional tensions over control of country’s rich natural resources………………………………………..Full Article: Source

Saudi Kingdom and sovereign wealth funds

Posted on 03 June 2014 by VRS  |  Email |Print

The increase in Saudi Arabian Monetary Agency’s (SAMA’s) net foreign assets to a record high of SR2.732 trillion in April shows the level of growth in the monetary system accelerated in tandem with the fiscal expansionary policy.
The challenge with using central bank assets for driving economic development is the fact they typically have to be held in liquid, relatively low-risk assets. The best example globally is US Treasuries — a large, deep, liquid market. The range of comparable assets in Saudi Arabia is limited. Part of the challenge here is the underdevelopment of the fixed income market and the near-absence of secondary trading………………………………………..Full Article: Source

Mozambique wants to do investment differently

Posted on 02 June 2014 by VRS  |  Email |Print

Mineral-rich Mozambique is considering the establishment of a sovereign wealth fund, the country’s finance minister said. “We think it’s a good idea,” Manuel Chang told AFP on the sidelines of an International Monetary Fund (IMF) conference on Africa.
“But we won’t do what others have done,” he added, suggesting Mozambique would not rush into creating the fund given other pressing demands that will require huge injections to fix, such as the infrastructure. An estimated $10-billion in foreign investments are expected to flow into the southern African country once a natural gas processing plant is built on its northern coast…………………………………..Full Article: Source

Mozambique plans sovereign wealth fund

Posted on 30 May 2014 by VRS  |  Email |Print

Mineral-rich Mozambique is considering the establishment of a sovereign wealth fund, the country’s finance minister said Thursday. “We think it’s a good idea,” Manuel Chang said“But we won’t do what others have done,” he added, suggesting Mozambique would not rush into creating the fund given other pressing demands that will require huge injections to fix, such as the infrastructure.
An estimated $10 billion in foreign investment are expected to flow into the southern African country once a natural gas processing plant is built on its northern coast. Mozambique’s reserves are believed to be the world’s third largest………………………………………..Full Article: Source

Little Sovereign Wealth Fund on the Prairie

Posted on 30 May 2014 by VRS  |  Email |Print

North Dakota is enjoying a flood of biblical proportions. Shale-drilling technology has liberated huge quantities of oil from the Bakken shale in the western part of the state. Production has surged from about 100,000 barrels per day in 2007 to nearly 1 million barrels per day this year—a tenfold increase.
But North Dakota, America’s latest petro-state, is handling its newfound wealth with the kind of modesty you might expect in a land where people live in giant open spaces and at the mercy of nature. Decades of boom and bust in agriculture have forged a culture of thrift, an abhorrence of debt, and a healthy mistrust of high finance. Alone among the 50 states, North Dakota has a state-owned bank. It never had much of a housing and credit boom, so it never had much of a housing bust………………………………………..Full Article: Source

Sovereign fund not a quick fix for SA

Posted on 27 May 2014 by VRS  |  Email |Print

Many countries have set up government-owned sovereign wealth funds to accelerate their investment potential, but such a move is unlikely to be a silver bullet for South Africa’s own growth ills.
These funds are state investment vehicles that hold and manage or administer large pools of public funds. But for such funds to be effective, money must come from somewhere, and South Africa does not stand out as a powerful candidate due to its trade and fiscal deficits, lack of privatisation and slow resource exports………………………………………..Full Article: Source

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