Mon, May 25, 2015
A A A
Welcome asarmad
RSS

Sovereign Wealth Funds Briefing - Category | Reserve Currencies more

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

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

banner
banner
May 2015
M T W T F S S
« Apr    
 123
45678910
11121314151617
18192021222324
25262728293031