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Chile fiscal deficit 0.3 pct in first half as copper prices pinch

Posted on 31 July 2015 by VRS  |  Email |Print

Chile posted a fiscal deficit of 0.3 percent of estimated gross domestic product in the first half of 2015, the government’s budget office reported on Thursday, due to weak copper revenue. The deficit was the equivalent of $792 million. Chile is the world No.1 copper producer and has suffered as prices languish at multiyear lows due to worries over demand in key buyer China.
Meanwhile, the country’s rainy day sovereign wealth fund fell in value to just under $14 billion by the end of June, compared to $14.7 billion at the end of last year. The fiscal deficit in the second quarter was 0.4 percent after a slim 0.1 percent surplus in the first three months of the year, the budget office said………………………………………..Full Article: Source

Yuan joins top five basic currencies of Azerbaijan’s Oil Fund

Posted on 29 July 2015 by VRS  |  Email |Print

Chinese yuan joins top five basic currencies of the State Oil Fund of Azerbaijan (SOFAZ). According to SOFAZ, as of July 1, 50.1% of its investment portfolio were denominated in U.S. dollars ($17.889 bn), 34% - in euro (€10.866million), 5.1% - in British pounds (£1.169bn), 1.8% - in Russian rubles (RUB 36.215 bn) and 1.4% - in yuan renminbi (CNY 3 bn).
The top five currencies are followed by Korean won (1.2% of portfolio or KRW 487.760 million), Turkish lira (1.1% or TRY 1.046 bn) and Australian dollar (0.6% or AUD 202.1 million). As of July 1, 2015, the Fund’s investment portfolio was estimated at the level of $35.726 bn and its general assets – at the level of $35.783 bn………………………………………..Full Article: Source

State Oil Fund of Azerbaijan hasn’t bought physical gold for 5 quarters at a run

Posted on 28 July 2015 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) hasn’t bought physical gold for five quarters in a row (2nd, 3rd, 4th quarters of 2014, and 1st -2nd quarter of 2015). The Fund informs that as of 1 July 2015 it owned physical gold worth $1.14 bn (last quarter it was $1.15 bn) which was equal to 3.2% of its investment portfolio ($35.726 bn).
“By the reported date SOFAZ had 30.17 tons of gold (970,146 ounces of gold),” SOFAZ said in a statement. This level of reserves conformed to the index as of 1 April 2014. The investment rules allow the Fund to invest up to 5% of its portfolio in physical gold………………………………………..Full Article: Source

Iran’s foreign reserves total US$115-125 billion - minister

Posted on 27 July 2015 by VRS  |  Email |Print

Iran’s foreign reserves total between US$115 billion and US$125 billion (£74.2 billion and £80.7 billion), including assets in its sovereign wealth fund, its industry minister said on Friday in one of the most detailed public descriptions of the reserves by an Iranian official.
The size of the foreign reserves and the way in which Iran uses them will be crucial in its efforts to rebuild its economy after years of international sanctions, which may be removed around the end of this year after last week’s agreement between Tehran and world powers on its nuclear programme. The National Development Fund of Iran, which was founded in 2011 and receives a portion of oil and gas export proceeds, has around US$20 billion to US$25 billion………………………………………..Full Article: Source

China’s Total Gold Holdings Much Higher – Owns Gold In SAFE and CIC

Posted on 21 July 2015 by VRS  |  Email |Print

China revises up its stated gold reserves in bid for IMF membership and reserve currency status. China announces a 604 tonne increase in gold reserves. First public disclosure re reserves in since 2009. China true gold holdings much higher as also owns gold in SAFE and CIC.
China officially owns around 1,660 tonnes of gold reserves – true total figure is likely much larger. Playing long game – protecting USD reserves and positioning RMB as global reserve currency. It is important to remember that as we have long pointed out two other entities, besides the PBOC, have also been buying gold – the State Administration of Foreign Exchange (SAFE) and the China Investment Corporation (CIC). Although if the combined holdings of the PBOC, SAFE and CIC were added together, China may well be the second largest holder of gold bullion – after the U.S. – assuming that U.S. gold reserve figures, which have not been publicly audited in over 60 years, are accurate………………………………………..Full Article: Source

Kuwait fiscal reserves hit record $592b

Posted on 10 July 2015 by VRS  |  Email |Print

Kuwait’s financial reserves defied a slump in oil prices to hit a record 179.2 billion dinars ($592 billion) at the end of the 2014-15 financial year, a report said Thursday. They grew by $53 billion in the year to March 31, Al-Qabas newspaper reported, citing figures released by Finance Minister Anas al-Saleh to a closed session of parliament last week.
The reserves are held in two state funds, the State Reserve Fund and the Reserve Fund for Future Generations. Both are run by the Kuwait Investment Authority, the Gulf emirate’s sovereign wealth fund. Years of high oil prices have given Kuwait healthy budget surpluses to invest in foreign assets………………………………………..Full Article: Source

Russian Minister Calls for Wealth-Fund Boost to Stem Ruble Gains

Posted on 03 July 2015 by VRS  |  Email |Print

Russia should start replenishing its Reserve Fund with proceeds from higher oil prices to stem the ruble’s appreciation, according to Finance Minister Anton Siluanov. The Finance Ministry proposes buying foreign currency for one of its two sovereign wealth funds if oil prices rise higher than $70 per barrel, Siluanov told reporters Thursday.
President Vladimir Putin has backed a weak-ruble policy as a lifeline to Russian producers struggling with a contracting economic amid U.S. and European Union sanctions over Ukraine. A rally in the ruble, the world’s best performer this year after losing almost half of its value in 2014, slowed after the Bank of Russia resumed foreign-currency purchases for its international reserves in mid-May………………………………………..Full Article: Source

Saudi central bank May net foreign reserves drop 1% to $672bn

Posted on 01 July 2015 by VRS  |  Email |Print

Assets dropped by 8.1 per cent from a year earlier to their lowest level since April 2013, central bank data showed. Net foreign assets at Saudi Arabia’s central bank fell to SAR 2.521 trillion ($672.2 billion) in May, down by $6.6bn or 1.0 per cent from the previous month as the kingdom continued to draw down reserves to cover a budget gap caused by cheap oil.
Assets dropped by 8.1 per cent from a year earlier to their lowest level since April 2013, central bank data showed on Tuesday. The central bank serves as the country’s sovereign wealth fund, storing its earnings from oil exports. Assets’ year-on-year drop is partly due to the strong U.S. dollar, which has cut the value of the portion denominated in non-dollar currencies, but a major part is due to a fiscal drawdown, analysts say………………………………………..Full Article: Source

Government should restart contributions to NZ Super Fund

Posted on 25 June 2015 by VRS  |  Email |Print

The New Zealand Superannuation Fund has been the world’s most successful sovereign wealth fund over the past five years. In that time, it has returned 17 per cent a year. Over the past three years, the going’s been even better, at 21 per cent. These are frankly extraordinary numbers – as fund chairman Gavin Walker said last week, if he saw an investment product promising such returns, “I would be thinking it was too good to be true”.
It wasn’t too good to be true, but it is too good to last. The fund’s managers held their nerve during the global financial crisis and bought underpriced equity – they have made hay as the global economy has recovered. There won’t always be such lucrative opportunities – inevitably, given the fund’s mandate to take some risks, there will be down times too………………………………………..Full Article: Source

How China’s race to reserve currency status will rock markets

Posted on 24 June 2015 by VRS  |  Email |Print

The inclusion of the Chinese renminbi into the basket of IMF’s reserve currencies will radically transform global markets and developing countries’ central banks policies. That’s according to Ashmore’s head of research Jan Dehn, who shared his views during a press roundtable on Tuesday.
Dehn said China would no longer need its foreign exchange reserves once its reaches global reserve status. He compared it to the US, which currently has hardly any foreign exchange reserves. ‘This means that China’s foreign exchange reserves, nearly $4 trillion, will become a sovereign wealth fund, which is not going to be invested in US dollar, but in global infrastructure, private equity and alternatives.’……………………………………….Full Article: Source

Qatar vast gas reserves ‘to last 138 years’: report

Posted on 22 June 2015 by VRS  |  Email |Print

Qatar’s gas reserves are so vast it can maintain production at current rates for another 138 years, according to an official report published on Sunday. An “Economic Commentary” from the Qatar National Bank (QNB) said the vast reserves of the tiny Gulf country will ensure it maintains its prominent position in the hydrocarbon sector “for years to come”.
It added that “Qatar has enough gas reserves to maintain production at current rates for 138 years”. “Looking forward, Qatar is expected to maintain its dominant role in the global hydrocarbon sector,” read the QNB report………………………………………..Full Article: Source

Nations fail to extract value from public assets worth more than GDP

Posted on 16 June 2015 by VRS  |  Email |Print

Citi chief economist Willem Buiter argues that one of the best ways to extract this value is through national wealth funds (NWF), ” a single institution, removed from direct government influence”. “This requires setting up an independent, ring-fenced body at arm’s length from daily political influence and enabling transparent, commercial governance,” he says.
The NWF differs from the more known sovereign wealth fund (SWF) in that the latter is a more liquid vehicle, investing largely in traded securities across major markets. A national wealth fund, by contrast, is more concerned with the “active management of operational assets as a portfolio”, Citi says………………………………………..Full Article: Source

National Assembly soon to debate bill on gas resources

Posted on 10 June 2015 by VRS  |  Email |Print

Igalula Member of Parliament Athuman Mfutakamba wanted to know when the government would deposit revenue from gas in the ‘Sovereignty Wealth Fund’ once the government selling the product in 2020. Responding, the deputy minister said after gas discovery in the country there has been heavy investment in the sector from both private and public sectors through contracts.
He said the contracts will be transparent as far as the distribution and allocation of revenue from gas resources is concerned, explaining: “The government will also establish a transparent system on how to make decisions concerning the use of funds from natural gas and where to invest the sovereign wealth fund.” Dr Kitwanga added that under the system it will be decided which areas and at what time the Sovereign Wealth Fund will be allocated, especially for the future generation………………………………………..Full Article: Source

Sovereign investors want larger exposure to Chinese yuan: Invesco

Posted on 09 June 2015 by VRS  |  Email |Print

Central banks have a growing appetite for risk, wanting more exposure to the Chinese yuan - a view that is also adopted by sovereign wealth funds around the world, a new survey has found. While less than 1 per cent of central bank portfolios were invested in renminbi, 43 per cent of them were interested in gaining more exposure to the currency, an annual soverign asset management study said.
Thirty-five per cent of global sovereign wealth funds reported that they were seeking renminbi exposure. The study by Invesco, released Monday, interviewed 59 sovereign investors across the globe, with assets totaling US$7.09 trillion (S$9.6 trillion). Individual investors were not named but the report included a sample from Singapore………………………………………..Full Article: Source

Dar seeks transparent expenditure of gas resources earnings

Posted on 09 June 2015 by VRS  |  Email |Print

The government will put in place transparent procedures on how to make decisions on expenditure of earnings from natural gas resources, including investing in sovereign wealth fund, the Parliament was told. Deputy Finance Minister, Mr Adam Malima, said in Parliament yesterday that the government will put in place the said procedures in a legal framework to govern exploitation of resources which is currently being prepared.
Mr Malima was responding to a question from Mr Athuman Mfutakamba (Igalula - CCM), who asked whether it is appropriate to invest in Sovereign Wealth Fund when Tanzania begins commercial exploitation of natural gas and petrol. Tanzania’s profile has been transformed from that of a least developed country to one of the hottest for the global energy industry, due to the discovery of offshore gas potential of 53.5 trillion cubic feet………………………………………..Full Article: Source

IMF Says China’s Yuan No Longer Undervalued

Posted on 01 June 2015 by VRS  |  Email |Print

China’s currency is no longer undervalued given its recent appreciation, but the government should pick up the pace in loosening controls on the exchange rate, the International Monetary Fund said. Economists critical of the IMF’s assessment said it did not reflect the real value of the Chinese yuan, and that the IMF was being pressured by Beijing to help clear the way for the yuan to be added to the Special Drawing Rights basket.
The IMF said in a statement in Beijing on Tuesday that “our assessment now is that the real effective appreciation over the past year has brought the exchange rate to a level that is no longer undervalued.”…………………………………Full Article: Source

Account for $30bn excess oil money – Oshiomhole tasks Okonjo-Iweala

Posted on 29 May 2015 by VRS  |  Email |Print

Edo State Governor, Comrade Adams Oshiomhole, yesterday came for the Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala, requesting her to account for an estimated $30 billion which should have accrued to the government based on the official oil exports of 2.3 million barrels per day.
Wondering why the management of public finance was shrouded in secrecy under her tenure, Oshiomhole called on the Finance Minister to tell Nigerians before leaving office how the economy was managed since her coming on board in 2011………………………………Full Article: Source

Nigeria earned N12.3 trillion as excess crude oil money in 4 years – Okonjo-Iweala

Posted on 26 May 2015 by VRS  |  Email |Print

Nigeria earned a huge $61.7 billion (about N12.3 trillion) in four years as excess crude oil money, the finance minister, Ngozi Okonjo-Iweala, said Saturday. According to the minister, Nigeria earned about $18.14 billion in 2011; $18.16 billion in 2012; $15.19 billion in 2013; $8.01 billion in 2014, and $2.17 billion in 2015.
The Excess Crude Account is one of the two accounts (dollar and Naira) where the Nigerian government saves revenue earnings from the difference between budgeted benchmark crude oil price and the actual price at the international market in a given year………………………………………..Full Article: Source

With oil cheap, public pressure grows on Gulf sovereign funds

Posted on 21 May 2015 by VRS  |  Email |Print

Running sovereign wealth funds in the Gulf has become an awkward business in the era of cheap oil, as their managers face growing pressure from politicians and the public to prove they’re investing national reserves wisely.
When oil prices were high, the Gulf funds - which include some of the largest in the world - came under little public scrutiny. Government coffers were awash with energy revenues and the financial futures of the Gulf Arab states seemed secure. But with Brent crude now at little more than half last June’s level, the countries may be entering their toughest fiscal times since the 1990s, and this has changed the political climate………………………………………..Full Article: Source

Norway’s 2015 GDP growth prediction slashed

Posted on 19 May 2015 by VRS  |  Email |Print

Economic outlook for mainland economy in Norway isn’t looking quite as rosy as original hoped, with the minority government proposing a revision to the 2.0 per cent growth predicted, revised down to 1.3 per cent. The government is planning to spur the economy slightly more with ‘oil cash’ it has in reserve, a sovereign wealth fund created especially for such a purpose.
Meanwhile the oil sector continues to tighten belts, so the government plans to spend a record 168.8 billion kroner ($22.45 billion) of this fund, amounting to 2.6% of it’s total value, to spur economic growth through investment………………………………………..Full Article: Source

Hong Kong Monetary Authority racks up HK$85.9 billion in forex losses over 15 months

Posted on 08 May 2015 by VRS  |  Email |Print

The Hong Kong Monetary Authority needs to improve its foreign exchange trading strategies after racking up a grand total of HK$85.9 billion in forex losses over the past 15 months. Cutting exposure to the yen, euro and pound and using hedging tools are among the investment advice offered by currency traders.
“The HKMA could be a better currency trader if it could adjust its currency mix in the near future,” said Jasper Lo Cho-yan, marketing director of Tung Shing Futures. He said the HKMA had to reduce its exposure to the yen, pound and euro………………………………………..Full Article: Source

SOFAZ to further invest in ruble, lira

Posted on 05 May 2015 by VRS  |  Email |Print

Azerbaijan’s state oil fund SOFAZ, will further invest in both the Russian and Turkish currency - respectively the ruble and the lira, despite their devolution. SOFAZ head, Shahmar Movsumov said investing in the Russian ruble and Turkish lira are strategic moves.
“They are long-term moves and do not depend on the value of these currencies,” Movsumov said last week. “Therefore, we will continue to invest in them.” As part of SOFAZ’s investment policy, up to 50 percent of all assets are in USD, up to 35 percent in euros, up to five percent in British pounds, and the remaining 10 percent in other currencies, including the Russian ruble, the Australian dollar, Korean Won and Turkish lira………………………………………..Full Article: Source

Australia’s Future Fund heavy in cash

Posted on 05 May 2015 by VRS  |  Email |Print

Australia’s A$117 billion ($90.9 billion) Future Fund is holding more cash this year, as the hunt for value in global markets becomes increasingly challenging. “We’ve always thought quite hard and quite deeply about the option value of cash,” concluding that cash doesn’t have to be a “drag … on your portfolio, provided you have a process in place and a governance in place” to deploy it when the time is right, David Neal, the Future Fund’s managing director, said.
The topic is relevant to a central debate among asset owners over whether the deluge of central bank liquidity inflating market valuations now will succeed in returning the global economy to sustainable growth………………………………………..Full Article: Source

Russian FinMin Siluanov Warns Large Deficit Could Consume Reserves

Posted on 29 April 2015 by VRS  |  Email |Print

Russian state-owned companies have lobbied the Kremlin for “loans and capital injections” from the country’s two large sovereign wealth funds, the National Welfare Fund and Reserve Fund. Western sanctions have affected Russian state-owned enterprises (SOE) from tapping Western capital markets for funding.
Russian Finance Minister Anton Siluanov warned that Russia could use up all of its Reserve Fund in 18 months if spending is not carefully monitored. TASS news agency reported Siluanov speaking to students in St. Petersburg, “This year we will use up to 3 trillion rubles [US$ 59 billion] of the Reserve Fund’s 5 trillion [US$ 98 billion], that is, we could basically use it up in a year and a half if we don’t approach our budget policy responsibly.”……………………………………….Full Article: Source

Norway central bank to continue buying Kroner for oil fund

Posted on 10 April 2015 by VRS  |  Email |Print

Norway’s central bank said 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

Norway central bank to continue buying Kroner for oil fund

Posted on 09 April 2015 by VRS  |  Email |Print

Norway’s central bank said 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. Until recently the kroner income was enough to meet Norway’s public spending needs but as the country’s oil reserves have declined this is no longer the case………………………………………..Full Article: Source

Azerbaijan’s non-oil sectors to be key to its sustainable development

Posted on 02 April 2015 by VRS  |  Email |Print

Azerbaijan has developed almost unrecognizably in the past five years. The economy has continued to grow at a significant level and, despite various challenges such as the falling of oil prices, the country has demonstrated a remarkable ability to ride any concerns through carefully chosen investments and sensible policies. SOFAZ, the State Oil Fund of Azerbaijan, has widened its investment portfolio while also reducing expenditure.
This is a prudent move bearing in mind that Azerbaijan is still heavily dependent on its income from oil and gas. The Republic is now also an increasingly attractive place for investment and cooperation. While the Final Investment Decision in December 2013 at Shah Deniz II was a monumental moment for Azerbaijan’s economy, it also demonstrated what opportunities are available for foreign investors………………………………………..Full Article: Source

Putting oil revenues into a savings fund isn’t always a great idea

Posted on 31 March 2015 by VRS  |  Email |Print

Pundits outside Alberta are almost unanimous in their support for a Norway-style sovereign wealth fund. If only the Alberta government had saved more of its resource revenues, the argument goes, then the Alberta government would have saved more of its resource revenues. Or something like that; details are never the strong suit of big-picture pundits. It’s usually enough to make the clearly unarguable point that it would nice to have an extra $1 trillion on hand, just like the Norwegians.
The Alberta government could have set aside some of its revenues into a wealth fund. But then again, so could have the federal government and any of the other provincial governments; Quebec already has put away $7 billion into its Generations Fund. The mechanics are pretty simple: set expenditures less than revenues and put the savings into a wealth fund………………………………………..Full Article: Source

An idea for Ring of Fire’s riches

Posted on 30 March 2015 by VRS  |  Email |Print

Ontario should look to socialist Norway if it wants to capitalize on the rich mineral deposits of the far north’s Ring of Fire. Like Canada, Norway has a resource-based economy, exploiting extensive reserves of oil, natural gas minerals and lumber. Half its export revenues come from oil and gas. The money was invested in financial markets outside Norway. It grew. Their sovereign wealth fund, created a mere 20 years ago, now controls about one per cent of all publicly traded shares in the world.
It’s a rainy-day fund, set up because oil won’t flow forever. And Norway’s oil production has dropped to one-half of what it was in 2001, according to Huffington Post business editor Daniel Tencer in a recent article. Alberta established a Heritage Trust Fund in 1976, but stopped contributing to it. According to a report last month by the Macdonald-Laurier Institute, the total topped out a $17 billion, about one-tenth what it could have grown to with a strategy like Norway’s………………………………………..Full Article: Source

Singapore fund declares big Dollar General stake

Posted on 20 March 2015 by VRS  |  Email |Print

A major global investment firm doesn’t appear too worried about the prospects for Dollar General following its failed bid for rival Family Dollar and the pending retirement of Chairman and CEO Rick Dreiling and CFO David Tehle. GIC Private, the former Government of Singapore Investment Corp., this week declared a 5.0 percent stake in Goodlettsville-based Dollar General.
The sovereign wealth fund manages more than $100 billion and employs about 1,200 people worldwide. Its stake in Dollar General, which has risen about 7 percent (Ticker: DG) so far this year, is worth about $1.1 billion………………………………………..Full Article: Source

GCC SWF’s can absorb shocks from oil volatility

Posted on 16 March 2015 by VRS  |  Email |Print

Sovereign wealth funds (SWFs) in Gulf Cooperation Council (GCC) countries are functioning as both diversification engines and shock absorbers during times when oil prices fall, according to Bruno Daher, chief executive officer of Credit Suisse in the Middle East and the Indian subcontinent.
The funds were created to provide future generations with a safety cushion, given the heavy reliance GCC economies have on oil. When oil prices are high, governments generate strong fiscal surpluses that are channelled into SWFs. But when prices fall below the fiscal budget break-even oil price, governments often dip into their reserves to fund the deficit………………………………………..Full Article: Source

Global finance faces $9 trillion stress test as dollar soars

Posted on 12 March 2015 by VRS  |  Email |Print

The world is more dollarized today that any time in history, and therefore at the mercy of the US Federal Reserve as rates rise. You would not think it possible that an Asian sovereign wealth fund could run into trouble too, but Malaysia’s 1MDM state fund came close to default earlier this year after borrowing too heavily to buy energy projects and speculate on land. Its bonds are currently trading at junk level.
It became a piggy bank for the political elites and now faces a corruption probe, a recurring pattern in the BRICS and mini-BRICS as the liquidity tide recedes and exposes the underlying rot………………………………………..Full Article: Source

SOFAZ to expand currency basket

Posted on 02 March 2015 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, keeps on agenda the inclusion of Chinese yuan in the Fond’s currency basket. SOFAZ head Shahmar Movsumov told Trend that SOFAZ’s all assets, including the investment portfolio, are in foreign currency.
“SOFAZ’s assets are in US dollars, euros, British pounds and other currency for diversification,” he said. “Taking into account that the assets in foreign currency impact the balance sheet in manat, the fluctuations in foreign currency exchange rates versus the manat lead to the exchange rate difference.”……………………………………….Full Article: Source

Samruk-Kazyna limits forex transactions of its subsidiaries

Posted on 26 February 2015 by VRS  |  Email |Print

Samruk-Kazyna National Wealth Fund of Kazakhstan has instructed its subsidiaries to abstain from making unnecessary foreign currency transactions, Tengrinews reports citing the head of the Fund Umirzak Shukeyev as saying at the press-briefing in the Central Communication Service’s headquarters on February 20.
“To support the Kazakh national currency we have introduced a special corporate standard that prohibits all of our subsidiaries from making unnecessary foreign exchange transactions. Unless there is a specific business need for such a transaction they will have to justify it to us that they really need the foreign currency,” he said………………………………………..Full Article: Source

Kazakh Fund Says FX Sales Alone Won’t Shore Up Tenge

Posted on 23 February 2015 by VRS  |  Email |Print

Kazakhstan’s sovereign wealth fund, which controls oil producer KazMunaiGaz and the nation’s rail monopoly, said selling its companies’ foreign-currency earnings alone won’t stave off pressure on the tenge to decline.
“We are ready to fully support” a request to stabilize the tenge and the Kazakh financial sector, “but we will do it intelligently, taking into account the needs of every unit,” Yelena Bakhmutova, deputy chief executive officer of the fund, known as Samruk-Kazyna, said in an interview in Almaty on Friday. “We will try to implement our part, but I am afraid that our deeds alone won’t change the situation on the market.”……………………………………….Full Article: Source

Where is Christy Clark’s plan now to save some revenue from B.C.’s rich resources?

Posted on 23 February 2015 by VRS  |  Email |Print

In the run-up to the 2013 election, Premier Christy Clark was dreaming big about sky-high LNG revenues, and a soon-to-be established Prosperity Fund to share today’s revenue from the non-renewable resource with tomorrow’s citizens. Does this mean the idea of some kind of sovereign wealth fund is, like much of Clark’s projected revenue stream, dead in the water?
Of course a sovereign wealth fund is more than just a pot of money that sits and grows and is never spent. The authors note that other jurisdictions put earnings from the savings to such uses as stabilizing government revenues over time, funding infrastructure and even maintaining healthy pension funds………………………………………..Full Article: Source

China grants GIC licence to invest in renminbi-denominated mainland assets

Posted on 16 February 2015 by VRS  |  Email |Print

China’s securities regulator has handed out a renminbi qualified foreign institutional investor (RFQII) licence to Singapore sovereign wealth fund GIC Pte Ltd, AsianInvestor reported on Friday. It was among 10 new licences announced late Thursday by the China Securities Regulatory Commission (CSRC), five of which went to Korean asset managers and two more to Singapore-incorporated entities, CSAM Asset Management and Neuberger Berman Singapore.
Previously, there were 10 Singapore holders of RQFII permits including Fullerton Fund Management, a unit of Singapore state investment company, Temasek Holdings. Beijing introduced the RQFII programme in 2011 to provide another way for foreign investors to participate in inest in mainland securities, as part of its efforts to speed up the liberalisation of of its currency and financual markets……………………………………….Full Article: Source

Oil To Account For Only 5% Of UAE’s GDP By 2021- Deputy PM

Posted on 10 February 2015 by VRS  |  Email |Print

The contribution of oil revenues to the UAE’s GDP is set to drop from around 30 per cent at present to only five per cent by 2021, the country’s deputy PM said on Monday. Speaking at the Government Summit in Dubai, Sheikh Saif bin Zayed, who is also the UAE’s Interior minister, said that the current drop in oil prices was a “challenge, but not a crisis.”
Sheikh Saif stressed that the country was diversifying into sectors such as investment – through institutions such as sovereign wealth fund ADIA, and into developing its human resources. “While oil is considered the wealth of a country, our true wealth lies in investing in the mind, investing in the education of our children,” he said………………………………………..Full Article: Source

Norwegian Krone Strengthens on Central Bank Buying Plan

Posted on 02 February 2015 by VRS  |  Email |Print

The Norwegian krone firmed against the euro Friday after the country’s central bank said it would increase the amount of kroner it will buy on behalf of its sovereign-wealth fund next month, as it seeks to match the currency inflows from the oil sector with the government’s spending needs.
Norges Bank said it would sell the foreign exchange equivalent of 700 million kroner a day ($89.8 million) in February, which is the largest daily amount since the bank started buying kroner in this way last October………………………………………..Full Article: Source

2014 state budget’s revenues hit 18 bln manats

Posted on 30 January 2015 by VRS  |  Email |Print

According to operative data, revenues of Azerbaijan’s state budget amounted to 18.4 billion manats, while expenditures-to over 18.699 billion manats in 2014, Finance Ministry said on January 28. The country’s state oil fund SOFAZ transferred 9.3 billion manats to the state budget as well.
Some 24 percent or 4.5 billion manats of expenditures were used for spending of social means, which is 9.9 percent or 403.9 million manats more compared to 2013……………………………………….Full Article: Source

SOFAZ to invest $500 million in yuan

Posted on 29 January 2015 by VRS  |  Email |Print

The State Oil Fund of Azerbaijan (SOFAZ) is planning to invest $500 million in Chinese yuan assets. SOFAZ also is looking to diversify its assets within real estate markets in Asia, the U.S.-Azerbaijan Chamber of Commerce said Monday. “We’ll continue to look at South Korea for properties,” SOFAZ Executive Director Shahmar Movsumov said.
“We’re looking at Japan, Hong Kong, Singapore and China. All the main hubs in Europe are in our agenda. We’re looking for very prime assets, which are intended to actually replace our very low-yield bonds that we have in our portfolio.” China has one of the largest economies on the global stage. The yuan has multiple prospects as an attractive investment currency………………………………………..Full Article: Source

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

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