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China’s Foreign Currency Reserves And Its Sovereign Wealth Fund – Analysis

Posted on 28 January 2015 by VRS  |  Email |Print

In September 2007, after a decade of structural reform of the banking sector, the Chinese government accepted the Ministry of Finance’s proposal to establish a new sovereign wealth fund, China Investment Corporation (CIC), to diversify these vast foreign reserve holdings ($1.4 trillion in September 2007; $4 trillion as of June 2014) in investments which would potentially yield a much higher income than that guaranteed by U.S. Treasury bonds.
Until 2007, China was emulating Middle Eastern oil producers which recycled their “petrodollars” in dollar-based assets and securities, particularly by investing in U.S. Treasury Bills. CIC is an exception to most of the global family of sovereign wealth funds. Unlike those of other countries, CIC does not have free and direct access to the country’s currency reserves……………………………………….Full Article: Source

Moody’s: Abu Dhabi’s assets buffer oil price drop

Posted on 28 January 2015 by VRS  |  Email |Print

According to Moody’s while the drop in oil prices will likely cause Abu Dhabi’s (Aa2 stable) economic growth to slow in 2015 and put an end to four consecutive years of double-digit fiscal surpluses, the emirate’s sizeable stock of foreign assets will help cushion the impact of lower oil revenues in the coming years.
The emirate also has a sizeable stock of offshore assets in its off-budget investment vehicles, including in the Abu Dhabi Investment Authority (ADIA), Abu Dhabi Investment Council, International Petroleum Investment Company (IPIC) and Mubadala. These exceed the total liabilities of Abu Dhabi government-related institutions and other emirate governments, according to Moody’s………………………………………..Full Article: Source

Kazakhstan’s foreign exchange reserves hit $28.9 bln

Posted on 27 January 2015 by VRS  |  Email |Print

Currently, Kazakhstan’s foreign exchange reserves exceed $28.9 billion, Head of the National Bank Kairat Kelimbetov said. “People say that the country’s gold reserves have reduced. But I want to emphasize once again that the reserves hit $24 billion in December 2014 amounting $28.9 billion in January 2015. As you can see, there is now a surplus of foreign exchange reserves,” he noted.
The country’s foreign exchange reserves declined from $37 billion to $23 billion in 2011-2013. “We suspended the declining trend,” he said. “At present, they hit $28.9 billion. Therefore, we believe that the National Bank is pursuing a right policy.”……………………………………….Full Article: Source

Azeri Oil Fund to Invest $500 Million in Yuan, Keep Ruble Assets

Posted on 26 January 2015 by VRS  |  Email |Print

Azerbaijan’s State Oil Fund, known as Sofaz, will invest $500 million in yuan assets this year and continue to pursue real estate across Asian markets to diversify its portfolio, the fund’s executive director said.
“At the end of last year, we approved a quota to invest in the renminbi,” Shahmar Movsumov said in an interview in Davos, Switzerland, referring to the Chinese currency also known as the yuan. “We’re completing all the necessary paperwork and this year will start investing the whole amount” of $500 million………………………………………..Full Article: Source

Russia prepares RUB1.375 trillion anti-crisis plan

Posted on 23 January 2015 by VRS  |  Email |Print

Russia’s President Vladimir Putin has approved the provisional version of an anti-crisis plan drawn up by the government. According to media reports, the plan involves recapitalisation of banks, provision of state guarantees, support measures for state development bank VEB and diverse sectors, changes to state procurement laws and procurement to facilitate import substitution, support for small business, and tax rebates.
In 2009, the budget deficit ran to 5.9% of GDP, financed from Russia’s sovereign wealth funds. A significant amound of funding for the anti-crisis plan will come from these planned budget cuts, say analysts. Funds will also be drawn down from the National Welfare Fund, a sovereign wealth fund………………………………………..Full Article: Source

Alberta has no reason to panic, at least not yet

Posted on 22 January 2015 by VRS  |  Email |Print

A dramatic fall in oil prices, predicted to reduce provincial government resource revenues in Alberta by $7 billion — a drop of at least 16 per cent — has generated intense speculation regarding public expenditure cuts, tax changes and, of course, the introduction of a general sales tax.
This type of precipitous price drop has happened before. And as before, the calls inevitably arise that more resource revenues should be saved in the Heritage Fund and used to stabilize government revenues during these negative commodity price shocks. But the real culprit is the Alberta government’s tendency to use an upturn in resource prices to enrich spending rather than build up a sovereign wealth fund………………………………………..Full Article: Source

Nigeria: Oil Price Crash and the CBN Response

Posted on 20 January 2015 by VRS  |  Email |Print

Little is there in the Sovereign Wealth Fund (which is a replacement for the Excess Crude Account with three separate funds: stabilization fund, infrastructure fund and future generations fund has only $1 billion as initial take-off capital in 2011) (the Nigerian sovereign wealth fund is the third-largest in sub-Saharan Africa, after the $6.9bn Botswana and $5bn Angola funds, although these are tiny compared to those of oil producers such as Saudi Arabia,
Norway and Abu Dhabi, which each have more than $600bn in assets) to act as reliable and sustainable buffer for the economy – unlike other countries like Qatar, UAE, Saudi Arabia and Russia. This is one of the economicides committed by the Nigerian State against itself by the very manner of its budgetary expenditure profile. Nigeria never plans for the future………………………………………..Full Article: Source

Russia to Dip Into Wealth Fund as Ruble Crisis Pressures Economy

Posted on 16 January 2015 by VRS  |  Email |Print

Russia will unseal its $88 billion Reserve Fund and use it to acquire rubles, the government’s latest effort to stem the country’s worst currency crisis in almost 17 years and limit its effects on the ailing economy.
“Together with the central bank, we are selling a part of our foreign-currency reserves,” Finance Minister Anton Siluanov said in Moscow today. “We’ll get rubles and place them in deposits for banks, giving liquidity to the economy.”……………………………………….Full Article: Source

Russia to use sovereign wealth fund to prop up ruble

Posted on 15 January 2015 by VRS  |  Email |Print

Russia will unseal its $88 billion Reserve Fund and use it to acquire rubles, the government’s latest effort to stem the country’s worst currency crisis in almost 17 years and limit its effects on the ailing economy.
“Together with the central bank, we are selling a part of our foreign-currency reserves,” Finance Minister Anton Siluanov said in Moscow today. “We’ll get rubles and place them in deposits for banks, giving liquidity to the economy.”……………………………………….Full Article: Source

Hayman’s Bass Says Oil Plunge Will Discipline Petro-State Norway

Posted on 08 January 2015 by VRS  |  Email |Print

The oil rout that has dragged down Norway’s krone since June will ultimately discipline a government that has relied too much on its petro-dollars to finance expenditure. That’s according to Kyle Bass, the founder and chief investment officer of Hayman Capital Management LP, who was in Oslo yesterday to attend a Skagen AS conference.
Scandinavia’s richest economy is now enduring the flipside of an oil reliance that fueled its economic boom over the past decade. The country has channeled oil income into the world’s biggest sovereign wealth fund in an effort to avoid overheating the economy. As part of that goal, government spending from oil revenue is limited to 4 percent of the fund. Yet thanks to growth in the fund, that percentage represents a rising pile of cash………………………………………..Full Article: Source

Why foreign reserves, Excess Crude Account depleted, by Okonjo-Iweala

Posted on 08 January 2015 by VRS  |  Email |Print

The Coordinating Minister for the Economy and Minister of Finance, Dr. (Mrs.) Okonjo-Iweala has offered explanation for the fast depletion in the foreign reserves of Nigeria and also in the Excess Crude Account which have in the past provided strong fiscal buffer to the Nigerian economy and also served as confidence booster to foreign investors.
The foreign reserves which in the late President Umaru Musa Yar’Adua Administration grew up to as much as over $60 billion is today standing at $34.5 billion while the ECA Account has equally depleted to a mere $3.1 billion from a level of $9.43 billion, thus eliciting wide concern by some people in the country including former President Olusegun Obasanjo………………………………………..Full Article: Source

FG Says Jonathan Did Not Squander Foreign Reserves, ECA

Posted on 08 January 2015 by VRS  |  Email |Print

The Federal Government has faulted increasing allegations in some quarters that the administration of President Goodluck Jonathan has squandered the nation’s foreign reserves and Excess Crude Account (ECA), describing such positions as absolutely untrue.
It said from verifiable facts, it was clear that Nigeria’s reserves were not squandered but used appropriately in the course of normal transactions required for the development of the Nigerian economy. Allegations that the Jonathan administration has frittered away the reserves and the ECA have been rife by opposition party members and former President Olusegun Obasanjo, among other critics, particularly since the prices of oil began a precipitous journey south………………………………………..Full Article: Source

Azerbaijan Government: the state budget doesn’t depend on current oil revenue

Posted on 07 January 2015 by VRS  |  Email |Print

The government of Azerbaijan is sure that state budget is stable against drastic fall in the world oil prices. According to a source close to the government, Azerbaijan’s state budget doesn’t depend on current revenues.
“The budget of Azerbaijan is based on revenues accumulated by the State Oil Fund (SOFAZ) during previous years. The law on state budget has been approved and adopted and the funds for transfer to the state budget have already been secured at SOFAZ accounts. Their disbursement schedule depends only on us. As a result, even in case of giant reduction in current tax payments from SOCAR (it’s very unlikely, as the basis of its tax payment is associated with the local market) or other payers, the state budget will not be impacted”, - the source said………………………………………..Full Article: Source

‘We have reached the danger point,’ Prince Alwaleed says of Saudi budget

Posted on 05 January 2015 by VRS  |  Email |Print

Saudi billionaire businessman Prince Alwaleed bin Talal has again publicly criticised the kingdom’s fiscal policy after the government’s 2015 budget showed its largest ever deficit due to the slump in oil prices. “We have reached the danger point… after starting to withdraw from the reserves,” Prince Alwaleed said.
Prince Alwaleed, who has called for the kingdom to create a sovereign wealth fund and warned that its reliance on oil was “wrong and dangerous”, estimated a total of $53 billion would be withdrawn from fiscal reserves during 2014 and 2015 because the government failed to contain spending………………………………………Full Article: Source

Oman opts for fiscal deficit in budget

Posted on 02 January 2015 by VRS  |  Email |Print

The country had outstanding sovereign debt equivalent to 8 per cent of GDP last year, according to the IMF, which predicts net indebtedness will grow to 10 per cent of GDP by 2017 – before the impact of falling oil prices is taken into account. In December, S&P cut its outlook for Oman’s credit rating from stable to negative. The country has a credit rating of A – below Saudi Arabia’s AA– rating, and the UAE’s AA rating.
Oman’s reserves will partly insulate the country from oil price shocks. Oman’s largest sovereign wealth funds, the State General Reserve Fund and the Oman Investment Fund, hold reserves of about $19bn, according to the Sovereign Wealth Fund Institute – equivalent to 21 per cent of Oman’s GDP………………………………………..Full Article: Source

Putin’s Secret Gamble on Reserves Backfires Into Currency Crisis

Posted on 18 December 2014 by VRS  |  Email |Print

Kremlin insiders gathered in secret last February to answer a crucial question for Vladimir Putin: Could Russia afford the economic blowback from taking over Crimea? Moscow said yes. Markets aren’t so sure.
About 40 percent of Russia’s reserves are held in two sovereign wealth funds that are controlled by the Finance Ministry. The government is looking for ways to tap these funds to help cash-strapped enterprises while maintaining as much international currency as possible. The Finance Ministry has already said it will use the other sovereign fund, the $89 billion Reserves Fund, which was meant to be used to fight inflation, to cover at least half a projected 1 trillion-ruble budget shortfall next year………………………………………Full Article: Source

The only cure for what plagues Russia

Posted on 18 December 2014 by VRS  |  Email |Print

Belatedly, financial markets have realised that July 16 was Russia’s Lehman moment. On that day, the US imposed sectoral sanctions on Russia because of its military aggression in eastern Ukraine. Two weeks later the EU introduced similar sanctions. However, it was only in December that the markets recognised the severity and tenacity of the financial sanctions.
Officially, the international reserves of the Central Bank of Russia (CBR) are $416bn, but not all of it is liquid. Gold reserves represent $45bn. The official reserves include the two sovereign wealth funds, the National Wealth Fund ($82bn) and the Reserve Fund ($89bn), which are held by the finance ministry and spoken for………………………………………Full Article: Source

Krone-Oil Ties Show Cracks as Norway Curbs Deflation: Currencies

Posted on 20 November 2014 by VRS  |  Email |Print

Norway’s government funnels most of its oil revenue into its sovereign-wealth fund, the world’s largest. Prime Minister Erna Solberg, who came to office last year, has cut taxes to boost productivity in the mainland economy and said Norway needs to diversify away from oil.
Norges Bank Governor Oeystein Olsen said in an interview in Bergen, Norway, yesterday that he sees “dark clouds” ahead for the economy, partly because of concerns over the development of the oil industry. Energy companies predict the sector will see an 18 percent drop in investment in 2015……………………………….Full Article: Source

Petrodollars: Figuring out what to do with PNG’s new LNG wealth

Posted on 11 November 2014 by VRS  |  Email |Print

As Papua New Guinea enters the small fraternity of LNG exporters, it needs to figure out what do with the money the poor nation is going to earn. Christine Forster looks at the issue in this week’s Oilgram News column, Petrodollars. The start-up in April this year of the ExxonMobil-operated Papua New Guinea LNG project was an historic moment for the small Pacific nation, marking the arrival of the world’s newest player on the global gas market.
At a price tag of $19 billion, the PNG LNG project represents the biggest investment in the country’s history. With the project now up and running at full capacity, and with the prospects firming for the development of a second LNG project at the InterOil-operated Elk-Antelope fields, PNG’s economy is set for a transformation………………………………………..Full Article: Source

Norway’s Central Bank to Continue Buying Kroner for Oil Fund

Posted on 03 November 2014 by VRS  |  Email |Print

Norway’s central bank said Friday it would continue to buy Norwegian kroner and sell foreign exchange in the market in November on behalf of the country’s sovereign-wealth fund. As in October, Norges Bank said it would sell the equivalent of 250 million Norwegian kroner ($37.2 million) a day in foreign exchange over the coming month and use the kroner it receives to cover public spending.
Norway receives income from its lucrative oil industry in both kroner and foreign currency. It receives foreign currency income from its direct ownership of stakes in oil companies and Norwegian kroner mainly in taxes from oil companies operating in Norway………………………………………..Full Article: Source

Kuwait fiscal reserves at 548 bln: report

Posted on 31 October 2014 by VRS  |  Email |Print

After first deducting 10 percent of revenues for its sovereign wealth fund that percentage was increased to 25 percent in the last two fiscal years. The tiny emirate has a native population of 1.25 million and is also home to about 2.8 million foreigners. The Kuwait Investment Authority (KIA) has decided to resume selling stakes in major local companies to the public planning to offer its stake in Kuwait Investment Co in the first half of 2015 state news agency KUNA reported last week.
The KIA one of the world’s largest sovereign funds with assets estimated at over 400 billion began offering stakes in listed Kuwaiti firms to the public in the 1990s as part of efforts to transfer more of the country’s corporate wealth into private hands. But the programme has been interrupted by bouts of stock market weakness including a 2009-2012 slump in the wake of the global financial crisis………………………………………..Full Article: Source

Kuwait fiscal reserves at $548 billion

Posted on 27 October 2014 by VRS  |  Email |Print

The oil-rich Gulf state of Kuwait had accumulated reserves of $US548 billion ($A592.91 billion) as of June 30 after continued growth in the first six months of 2014, a local daily has reported. The reserves are invested in two state funds, the State Reserve Fund with $US149 billion and the Reserve Fund for Future Generations with $US399 billion, Al-Qabas newspaper said on Sunday, citing a report by the Audit Bureau, Kuwait’s state accounting watchdog.
Both funds are run by the Kuwait Investment Authority, the country’s sovereign wealth fund. The report said the reserves had increased by $US15.7 billion in the first six months of 2014………………………………………..Full Article: Source

Union Seeks To Negotiate Increased Pay Based On Income From Oil

Posted on 13 October 2014 by VRS  |  Email |Print

Bahamas Public Services Union President John Pinder said the union will be “proactive” in formulating a draft for negotiations for increased pay for union members in time for the government’s tabling of its recently completed petroleum legislation. Pinder said after “agitating for some time” to have the government consider a “sovereign trust fund,” the BPSU will be in a position to go after trying to get “some more revenue and more increases” for its members when the legislation is tabled in Parliament next month.
His comments came after Environment and Housing Minister Kenred Dorsett said on Wednesday that legislation to govern oil exploration will also include the framework for a “sovereign wealth fund” that would benefit the nation in case commercially viable quantities of oil are discovered………………………………………..Full Article: Source

Dutch Failure to Copy Norway on EU265 Billion Gas Gains Queried

Posted on 09 October 2014 by VRS  |  Email |Print

The Netherlands got about 265 billion euros ($334 billion) in over half a century in proceeds from Slochteren and other gas fields, and has little to show for it. Had the Netherlands followed the Norwegian example of a sovereign wealth fund, about 350 billion euros would have been available as of January 2014, the court said. The Netherlands can still have 150 billion euros by 2035 if it starts putting money aside now and invests like the Norwegians, the Court said.
The report comes Prime Minister Mark Rutte’s government works on creating a “Future Fund” with which it wants to make up for lower gas proceeds through other investments. The government is being forced to cut gas output by 21 percent this year to 42.5 billion cubic meters in 2014 and 2015………………………………………..Full Article: Source

Qatar’s net external asset position to remain strong

Posted on 09 October 2014 by VRS  |  Email |Print

Qatar’s net external assets will be sufficiently higher than the current account receipts in 2014 with government expenditure set to weaken in the next four years to maintain a relatively “strong” fiscal surplus, according to global credit rating agency Standard and Poor’s (S&P).
“We expect government spending to slow to an average of 6% for 2014-2017 to enable the government to maintain a relatively strong fiscal surplus averaging about 5% of GDP over the period. We no longer include an estimate of government investment income from the Qatar Investment Authority in the government balance,” the rating agency said………………………………………..Full Article: Source

Building Nigeria’s mining industry: more than money

Posted on 09 October 2014 by VRS  |  Email |Print

Mining is important for the security and prosperity of Nigeria and towards developing the sector in Nigeria, the recently concluded National Conference, 2014 recommended that the Solid Minerals Development Fund (SMDF) be increased from the present 1.68% to 5%.
Sovereign Investment Authority (Establishment, Etc.) Act, 2011 (NSIA Act), governing Nigeria’s Sovereign Wealth Fund (NSWF); and it should have a maximum timeframe (5- 10 years) within which to accomplish its objectives. It makes sense to consider amending the NSIA Act to make the SMDF part of the NSWF………………………………………..Full Article: Source

Dutch Failure to Copy Norway on EU265 Billion Gas Gains Queried

Posted on 08 October 2014 by VRS  |  Email |Print

The Netherlands got about 265 billion euros ($334 billion) in over half a century in proceeds from Slochteren and other gas fields, and has little to show for it. That’s the conclusion of the nation’s Court of Audit, which looked into what happened to the money raised from the sale of gas from the Slochteren field, discovered in 1959 in the biggest find on Continental Europe.
Had the Netherlands followed the Norwegian example of a sovereign wealth fund, about 350 billion euros would have been available as of January 2014, the court said. The Netherlands can still have 150 billion euros by 2035 if it starts putting money aside now and invests like the Norwegians, the Court said………………………………………..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

Angola in the fast lane

Posted on 30 September 2014 by VRS  |  Email |Print

Oil wealth has propelled Angola’s fast-growing economy, but it could be heading for a crash without Government and banking sector reforms.
Though risk exposure associated with the oil sector and sovereign debt remains, Moody’s noted that the country is supported by the Government’s strong debt-to-GDP ratio (23 per cent) and the gradual growth in foreign exchange reserves. The recent creation of the sovereign wealth fund, Fundo Soberano de Angola, should also serve as a buffer against potential economic shock………………………………………..Full Article: Source

With $100 billion in foreign reserves: is Libya’s central bank monopolizing the country’s economic potential?

Posted on 29 September 2014 by VRS  |  Email |Print

Oil accounts for 95 percent of state revenue in Libya and 65 percent of the country’s Gross Domestic Product (GDP). The country has the largest oil reserves in Africa and the fifth largest in the world, with oil terminals scattered across the country but mainly concentrated in the northeast. With the Tripoli-based bank’s full control of these vital oil revenues, it has become a key, if not the supreme player in the ongoing civil war, according to well-placed sources and analysts.
And it’s not the oil revenues alone that the bank holds. The CBL controls the country’s entire purse strings at the moment, including $100bn in foreign currency reserves. It is from the bank’s headquarters that money is distributed and assets accessed across Libya. This includes money that the Tobruk-based House of Representatives (HoR) needs to spend and function as an effective political force………………………………………..Full Article: Source

Brazil: Government draws US$ 1.7 bn from sovereign fund

Posted on 23 September 2014 by VRS  |  Email |Print

The non-fulfilment of tax collection growth forecasts has driven the Brazilian government to draw R$ 3.5 billion (US$ 1.7 billion) from Fundo Soberano do Brasil (FSB – the Sovereign Fund of Brazil) to prevent a new cut in non-discretionary (non-mandatory) expenditures. The decision was made public in the Revenues and Expenses Assessment Report released every two months by the Ministry of Planning, which allocates the General Federal Budget. The information was released by government news agency Agência Brasil.
The Sovereign Fund was established using leftover cash from the primary surplus – funds saved for paying interest on the public debt – accrued in 2008. The savings worked as a fallback, in case the government required additional funds for settling public accounts. By late 2012, the National Treasury had drawn R$ 12 billion (US$ 5 billion) to meet the year’s primary surplus target………………………………………..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

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

Focus on Ghana’s handling oil revenue

Posted on 03 September 2014 by VRS  |  Email |Print

Ghana’s Petroleum Revenue Management Act was passed more than a year after the first oil was pumped from the country’s Jubilee Field. The law outlines clear mechanisms for collecting and distributing petroleum revenue. It specifies what percentage should help fund the annual budget, what should be set aside for future generations and what should be invested for a rainy day.
Petroleum revenue contributed 4 per cent of the government’s total capital spending in 2011. The funds went mainly to investments in road infrastructure, but also to building the capacity of the oil and gas sector, repaying loans and strengthening agriculture, most notably for fertilizer subsidies. Proposals for investing the Petroleum Funds, comprising Stabilisation and Heritage Funds, have raised divergent views from civil society groups and government………………………………………..Full Article: Source

PNG Gas revenue flows

Posted on 28 August 2014 by VRS  |  Email |Print

A total of 12 shipments of LNG gas have already left PNG shores, raking in almost US$600 million (K1.5 billion) in revenue for all the partners, including the government. Prime Minister Peter O’Neill told Parliament Wednesday,that the country has started the early export of LNG gas and to date 12 shipments have taken place with an estimated US$50 million per shipment.
He said the government is expected to receive an estimated US$30 billion revenue over the next 20 years, which is substantial revenue. He said the project is managed by ExxonMobil and all revenue from the gas export are parked in a trust account that is managed by ExxonMobil and not the PNG government………………………………………..Full Article: Source

Norway’s soaring oil fund gives government more spending power for 2015

Posted on 27 August 2014 by VRS  |  Email |Print

Norway’s sovereign wealth fund is growing far faster than expected, potentially leaving the government with more money to spend in next year’s budget, financial daily Dagens Naeringsliv reported on Tuesday.
The fund’s value could hit almost 6 trillion Norwegian crowns ($973 billion) by the end of the year, according to a new government forecast cited by the paper. That compares with a year-end estimate of 5.48 trillion crowns made in May. The newspaper gave no explanation for the discrepancy, but the fund invests heavily in foreign stock markets, many of which have been trading around multi-year highs………………………………………..Full Article: Source

Kuwait’s oil revenues masks inherent weakness

Posted on 25 August 2014 by VRS  |  Email |Print

The credit rating agency Standard and Poor’s has made the right move in retaining Kuwait’s ratings, namely AA for the long-term and A-1 for short-term with a stable outlook. The assumptions were made on some significant data available with S&P.
The S&P report suggests that Kuwait enjoys a sizable net asset position, compromising 2.7 times the GDP. Undoubtedly, this is something extraordinary in today’s world where maintaining such positions are an exception. This fact is supported by the latest Sovereign Wealth Institute data, placing Kuwait’s sovereign wealth fund at $410 billion. Certainly, this fund is a major contributor to investment income, which amounted to about $16 billion in 2013………………………………………..Full Article: Source

Nigeria: National revenue drops by N154.56b, says FAAC

Posted on 20 August 2014 by VRS  |  Email |Print

The fortunes of the three tiers of government suffered a huge decline last month as the Federal Government said the country recorded a N154.56 billion decline in gross federally collected revenue from N784.88 billion received in June to N630.32 billion in July, this year.
The Minister of State for Finance, Ambassador Bashir Yuguda said Federation Accounts Allocation Committee (FAAC) transferred N6.2 billion to the Excess Crude Account thus bringing the balance in the account to $4 billion while the sum of N35 billion was transferred to the domestic excess crude account for payment to oil marketers as subsidy………………………………………..Full Article: Source

Norway c.bank will not make any FX transactions in Aug

Posted on 01 August 2014 by VRS  |  Email |Print

Norway’s central bank will not sell any Norwegian crowns in August to buy foreign exchange for the country’s sovereign wealth fund, the bank said on Thursday, in line with its practice in recent months.
The bank earlier said it did not expect to buy any foreign currency over the coming months and it could even buy crowns later in the year. The fund uses the proceeds of a sale to invest in stocks, bonds and property abroad. It is the world’s largest sovereign wealth fund………………………………………..Full Article: Source

Azerbaijan’s oil funds turning into Chinese Yuan

Posted on 01 August 2014 by VRS  |  Email |Print

Azerbaijan’s state oil fund SOFAZ which is in charge of accumulating and managing the country’s oil and gas revenues have taken some measures to include Yuan in its currency portfolio. SOFAZ Deputy Executive Director Israfil Mammadov said the fund has appealed to the People’s Bank of China to obtain quotes on indirect investment in the Chinese yuan onshore market with a view to diversify its investment portfolio.
The fund, established in 1999 aimed at transforming rising hydrocarbon reserves into financial assets, started investing in new asset classes such as equities, real estate, and gold, as well as diversifying its currency portfolio toward the Turkish lira, Russian ruble, and Australian dollar, from 2012………………………………………..Full Article: Source

The State Oil Fund of Azerbaijan starts investing in renminbi

Posted on 31 July 2014 by VRS  |  Email |Print

The State Oil Fund of the Republic of Azerbaijan (SOFAZ) has applied to the People’s Bank of China (PBoC) for indirect renminbi investment in China’s onshore market to diversify its current investment portfolio. According to Israfil Mammadov, deputy CEO of SOFAZ, the Fund applied for the PBoC quota not long ago.
“We intend to invest in a gradual manner, initially through Chinese government debt securities. As our experience grows, we will consider other investment tools available in the Chinese financial markets,” said Mammadov. Mammadov said the decision was made as a result of a careful evaluation of the SOFAZ portfolio and with the aim of using various opportunities in Chinese markets………………………………………..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

Temasek Holdings: Bitcoin is under testing

Posted on 01 July 2014 by VRS  |  Email |Print

Temasek Holdings, a triple-A rated investment company owned by the government of Singapore, has been testing Bitcoin, according to a report in the Singaporean newspaper, Today Online, cited by coindesk.com.
The announcement has been made by the chairman of the company, Lim Boon Heng, in a speech cited by the same source. The experiment has involved everyone getting their own Bitcoin wallet and practicing by using it to donate to charity, Lim adds………………………………………..Full Article: Source

What should China buy with its $3.9 trillion reserves?

Posted on 18 June 2014 by VRS  |  Email |Print

China’s foreign exchange reserves rose to $3.948 trillion at the end of the first quarter. The figure in 1978 was $167 million, and in November 1996 it surpassed $100 billion for the first time. The change has been amazing.
There have been many thoughts about how we in China can make use of the forex reserve, ranging from buying assets abroad to using it as leverage in diplomatic talks. What needs emphasizing is that the reserve is not a free buffet. It corresponds to the central bank’s debt in yuan and costs dearly to maintain………………………………………..Full Article: Source

Azerbaijan’s sovereign wealth fund to invest $1.8 billion in renminbi

Posted on 16 June 2014 by VRS  |  Email |Print

Azerbaijan’s sovereign wealth fund will invest up to $1.8 billion in China’s renminbi this year, one of the biggest publicly-acknowledged investments in China’s currency. Shahmar Movsumov, the chief executive of the $37 billion State Oil Fund of Azerbaijan, said that the fund is applying for permission from Chinese regulators to access local currency assets and wants to start investing in them by the end of this year.
“It’s one of the currencies that are becoming important, so why not invest in renminbi?” Movsumov said, according to the Financial Times. “We are in the process of getting all the necessary preparations.”……………………………………….Full Article: Source

Norway to refrain from fx buying for wealth fund in June

Posted on 02 June 2014 by VRS  |  Email |Print

Norway’s central bank will not sell Norwegian crowns in June to buy foreign exchange for the country’s sovereign wealth fund, the bank said on Friday on its page, in line with its practice in recent months.
The bank earlier said it did not expect to buy any foreign currency over the coming months and that it could even buy crowns later in the year. The fund uses the proceeds of a sale to invest in stocks, bonds and property abroad. It is the world’s largest sovereign wealth fund………………………………….Full Article: Source

Azerbaijani State Oil Fund diversifies currency portfolio

Posted on 23 May 2014 by VRS  |  Email |Print

As of the first quarter of 2014, some 51.2 percent of the total volume of the investment portfolio of the Azerbaijani State Oil Fund (SOFAZ) is in U.S. dollars ($18.6 billion), SOFAZ said on May 20. As of January-March, the total sum of SOFAZ’s investment portfolio amounted to $36.344 billion or 99.3 percent of total volume of assets, according to the report.
Around 36.9 percent of the investment portfolio is concentrated in euros (9.75 billion euros), 5 percent in British pounds sterling (about 1.08 billion pounds sterling), 1.2 percent in Turkish Lira, 0.5 percent in Australian Dollars and 1.2 percent in Russian rubles, 0.6 percent in Korean won. The rest of the portfolio at 3.5 percent ($1.26 million) is concentrated in gold………………………………………Full Article: Source

China’s forex reserve to hit $4 trillion

Posted on 19 May 2014 by VRS  |  Email |Print

China, the world’s second-largest economy, will have more than $4 trillion in foreign exchange reserve by the end of 2014, said a People’s Daily report on Monday. China used to be short of foreign exchange before the nation adopted the reform and opening-up policy in 1978, while the country’s foreign exchange reserve exceeded the $10 billion, $100 billion and $1 trillion marks in 1990, 1996 and 2006, respectively.
According to the latest statistics from the People’s Bank of China, the central bank, as of the first quarter of this year, the foreign exchange reserve balance of China reached $3.95 billion, ranking first globally and accounting for one third of the world’s total…………………………………..Full Article: Source

Norway to slightly increase govt spend in revised budget -NTB

Posted on 15 May 2014 by VRS  |  Email |Print

Norway’s revised 2014 budget, to be unveiled later on Wednesday, will increase spending by 1.9 billion crowns ($320 million) compared to a November proposal, news agency NTB reported, citing government documents.
The structural budget deficit is now seen at 2.8 percent of the $860 billion sovereign wealth fund, known as the oil fund, below a November forecast of 2.9 percent, NTB added. The government can spend up to 4 percent of the oil fund each year and even though spending has been rising in nominal terms, it has been on a decline as a percentage of the fund because of its rapid growth………………………………………..Full Article: Source

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