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Norway to sell NOK 600 mln of FX per day

Posted on 01 December 2015 by VRS  |  Email |Print

Norway’s central bank will sell foreign exchange equivalent of 600 million Norwegian crowns per day from Dec 1-11 after selling 700 million crowns a day throughout November. Norges Bank limits the number of days it conducts foreign exchange transactions in the month of December to avoid year-end market volatility.
The bank is selling the currency because the government’s transfers to its $852 billion sovereign wealth fund have been smaller than earlier expected and the budget is spending more of its oil-related income. The bank usually puts foreign currency to be given to the fund into a “buffer portfolio”, which had become bigger than necessary and has said it would gradually reduce the size of this buffer this year by selling foreign exchange in the market………………………………………..Full Article: Source

Putting more money into SWF is right thing to do, says Orji

Posted on 30 November 2015 by VRS  |  Email |Print

Barely three years after Uche Orji pioneered the Nigerian Sovereign Investment Agency (NSIA), his leadership has turned around the fortunes of the agency. The additional $250 million injected into NSIA by its shareholders, he believes, is a vote of confidence in its management.
The development is that we have a very successful engagement with the National Economic Council which resulted in what we believe is a vote of confidence, as evidenced by the additional contribution that has been made to the Sovereign Wealth Fund of $250 million………………………………………..Full Article: Source

Nigeria makes first 2015 contribution to sovereign wealth fund

Posted on 23 November 2015 by VRS  |  Email |Print

Nigeria will inject $250 million into its sovereign wealth fund, an official said on Thursday, making the first contribution since last year as government savings slightly improved despite a plunge in oil prices.
The money will come from recent proceeds from liquid natural gas exports, Rauf Aregbesola, governor of the southern Osun state, told reporters in Abuja. President Muhammadu Buhari, who took office in May, was elected on a campaign to root out oil theft and corruption, which has deepened an economic crisis triggered by the falling price of Nigeria’s oil exports………………………………………..Full Article: Source

Oil price crash is not panicking petro states

Posted on 05 November 2015 by VRS  |  Email |Print

With their national history of turbulence, Russians have mastered a skill that many of us in the West haven’t had the opportunity to develop: exploiting crisis. The Russian official explained to me that the oil price crash has prompted Russian President Vladimir Putin to draw from two sovereign wealth funds worth more than $150 billion, according to the Sovereign Wealth Fund Institute.
The official explained that the money from the funds would be used to stimulate growth in non-oil sectors. There’s little incentive to develop those sectors if you can just drill a hole in the ground and a cash flow gushes out of it, but plummeting oil prices provided the motivation………………………………………..Full Article: Source

Why Thailand must protect its international reserves

Posted on 04 November 2015 by VRS  |  Email |Print

Although that $160 billion stockpile is nowhere near China’s at close to $4 trillion, it still puts Thailand at number 14 in the world, just below Germany’s $193 billion and above Great Britain’s $156 billion. As $160 billion is equivalent to over eight months of Thailand’s goods imports in 2014, it is judged excessive by many economists who consider keeping international reserves to about three months of imports sufficient to weather any unexpected events.
That government was also reported to have considered putting part of the reserves into a newly created sovereign wealth fund, whose investments could include buying shares and bonds of companies that would build and operate infrastructure projects in the kingdom. Nothing along those lines came to fruition following strong resistance from various quarters………………………………………..Full Article: Source

Sovereign funds leaking cash

Posted on 04 November 2015 by VRS  |  Email |Print

The 46 countries that have at least one sovereign wealth fund have largely set them up for a rainy day. Now that day has come for most of them. Commodity prices are so depressed that governments need to unseal their piggy banks and with profitable investment opportunities scarce there is little incentive not to. This could end up putting downward pressure on global financial markets.
Of the top 30 sovereign funds, 18 are filled with revenues from oil and gas. The largest of the funds, set up in 1990 to safeguard Norway’s oil wealth for future generations, posted its biggest loss in four years this week. It shed $32 billion in the third quarter, all in the stock market, which accounts for 60 percent of its investments………………………………………..Full Article: Source

Oil Prices Could Deplete Russia’s Sovereign Funds by the End of 2016

Posted on 30 October 2015 by VRS  |  Email |Print

Russia’s Ministry of Finance released a draft budget for 2016, which relies heavily on the country’s sovereign fund to bridge its growing deficit gap. According to Russia’s Finance Minister Anton Siluanov, the country’s sovereign fund will no longer be able to serve as the main source to finance the budget deficit following 2016, reports TASS.
“Our reserves volume [in 2015] will decrease by approximately 2.6 trillion rubles ($40.85 billion) – more than half. This means that 2016 is the last year when we are able to spend our reserves that way. After that we will not have such resources,” he said………………………………………..Full Article: Source

SOFAZ expects deficit-ridden budget in 2015

Posted on 26 October 2015 by VRS  |  Email |Print

The budget of the State Oil Fund of Azerbaijan (SOFAZ) for 2015 will be deficit-ridden due to the long decline in world oil prices, SOFAZ told Trend Oct. 23. While drawing up SOFAZ budget-2015, the basic parameters of the state budget were taken as a basis. The oil price was set at $90 per barrel, the source said.
“Taking into account the oil price at $50 a barrel, SOFAZ’s total income, including the proceeds from the oil and gas sale are predicted at 7.4 billion manat till late 2015, which is 28 percent less than SOFAZ income approved for this year,” SOFAZ said………………………………………..Full Article: Source

Australia Sovereign Wealth Fund Boosts Cash Reserves

Posted on 21 October 2015 by VRS  |  Email |Print

Australia’s A$118 billion sovereign wealth fund, the Future Fund, has increased its cash reserves because of uncertainty in global financial markets and worries about the impact of a rate rise by the U.S.central bank. “We believe that prospective returns are relatively low at the moment and we believe that the risks are relatively high,” Future Fund Managing Director David Neal tells a Budget oversight committee of Australian lawmakers.
Neal adds that the key risks worrying the world’s 14th largest sovereign fund include U.S. monetary policy and “whether the U.S economy will be able to withstand rising interest rates and how it will cope with rising interest rates.”……………………………………….Full Article: Source

Commodity prices pile pressure on Middle East

Posted on 21 October 2015 by VRS  |  Email |Print

As a result of the falling oil price, Norway, which runs the latest sovereign wealth fund in the world plans to draw some $450 million from the fund in 2016 to make up for lost oil revenues. But with around $820 billion under management, that is not a huge portion. Saudi Arabia, where the central bank also doubles as the country’s sovereign wealth fund, is also set to tap its foreign currency reserves according to chief market strategist at Convergex Nick Colas.
Moody’s said that Bahrain and Oman will also putting their sovereign wealth fund “buffers” to use, with reserves falling by 15 percent to $5.2 billion in April from $6 billion in December but have risen again slightly in May and stabilized since then. The agency said sovereign credit quality of GCC states could deteriorate if government spending continues to grow at a rapid pace and public debt levels mount sharply………………………………………..Full Article: Source

Norway PM says tap oil fund more to cope with asylum seekers-report

Posted on 14 October 2015 by VRS  |  Email |Print

Norway may have to tap its $856 billion sovereign wealth fund more than planned next year to cope with a rising number of people seeking asylum, Prime Minister Erna Solberg was reported as saying on Tuesday.Solberg’s right-wing government said last week it would make the first net withdrawal from the fund to finance tax cuts and boost a slowing economy hit by weak oil prices.
Its 2016 budget planned to spend 2.8 percent of the fund’s value in 2016, up from 2.6 percent this year, equivalent to an extra 23 billion crowns. But that sum may now increase. “We must use more money because we can’t stop everything that is happening in Norway just to pay for the flow of refugees,” Solberg was quoted as saying in the business newspaper Dagens Naeringsliv on Tuesday………………………………………..Full Article: Source

Wealth Funds From Oslo to Riyadh Raid Coffers to Offset Oil

Posted on 12 October 2015 by VRS  |  Email |Print

From Oslo to Doha, Riyadh to Moscow, governments that rode crude’s historic rise to unprecedented wealth are now being forced to start repatriating their rainy- day funds just to make ends meet. The halving of oil to less than $50 a barrel has the potential to alter one of the most powerful economic and political forces of the past half century: the rise of the petrostate.
These countries led a surge in state investments in the US and Europe that now totals about $7.3 trillion globally, according to the Sovereign Wealth Fund Institute. During the last boom, the oil countries flaunted their wealth abroad by buying stakes in iconic companies such as Barclays as well as trophy assets including Manhattan hotels, European soccer clubs and London luxury homes, often in the face of opposition from the local public………………………………………..Full Article: Source

Norway to start withdrawals from oil fund to plug deficits

Posted on 08 October 2015 by VRS  |  Email |Print

Norway predicts it will for the first time need to withdraw cash from its $US820 billion sovereign wealth fund as western Europe’s biggest oil exporter uses a record chunk of its petroleum revenue to cover budget holes and stimulate the economy.
The minority coalition plans to spend 208 billion kroner ($US25.2 billion) of its oil wealth next year, topping the 204 billion kroner it predicts it will receive from offshore oil and gas fields, according to the 2016 budget. That implies a withdrawal from the fund of 3.7 billion kroner, after an inflow of 38 billion kroner this year………………………………………..Full Article: Source

Norway to cut tax, spend $23.3 bln from oil fund in 2016

Posted on 07 October 2015 by VRS  |  Email |Print

Norway’s minority government will propose to cut corporate and personal taxes and boost spending from the country’s oil fund in its 2016 budget, public broadcaster NRK and tabloid VG reported on Tuesday.
Known as the structural non-oil deficit, the amount corresponds to 2.8 percent of the expected size of the country’s sovereign wealth fund. Norway’s sovereign wealth fund, or oil fund, is the world’s largest with $845 billion of assets built up from petroleum revenues over a period of almost 20 years………………………………………..Full Article: Source

Norway Seen Tapping Its Wealth Fund to Ward Off Oil Slump Risks

Posted on 06 October 2015 by VRS  |  Email |Print

For Norway, the future may already be here. The nation could as soon as next year start making withdrawals from its massive $830 billion sovereign wealth fund, which it has built over the past two decades as a nest egg for “future generations.” The minority government will reveal its budget plans on Wednesday and has flagged new spending measures and tax cuts.
Prime Minister Erna Solberg is trying to avoid a recession as a slump in the nation’s key commodity takes its toll on the $500 billion oil-reliant economy. Norway has already spent recent years using a growing chunk of its oil revenue to plug deficits while at the same time building the wealth fund. Now, with tax revenue from petroleum extraction down 42 percent on last year, budget spending in 2016 will probably outstrip income………………………………………..Full Article: Source

Oil exporters withdraw billions of dollars from equity funds, raising volatility

Posted on 30 September 2015 by VRS  |  Email |Print

Saudi Arabia, for instance, has withdrawn tens of billions from global fund managers as it aims to cover its widening budget deficit, to finance the war in Yemen and to reduce its exposure to volatile global equity markets. Fund managers estimate that the Saudi Arabian Monetary Agency (SAMA) – the kingdom’s central bank - has withdrawn between $US50 billion ($71.5 billion) and $US70 billion over the past six months.
This is backed up by official figures that show that since the third quarter of 2014, SAMA’s reserves held in foreign securities have dropped by $US71 billion, accounting for the huge bulk of the $US72.8 billion drop in its foreign currency reserves………………………………………..Full Article: Source

Middle East Sovereign Wealth Funds, Reserves Taking a Beating

Posted on 30 September 2015 by VRS  |  Email |Print

Low oil prices may have cost the government of Saudi Arabia more than $70 billion in the past six months. Qatar’s sovereign wealth fund has taken paper losses of up to $12 billion in the third quarter as a result of the Volkswagen scandal, the collapse in the share price of mining and commodity trading firm Glencore and troubles at the Agricultural Bank of China.
While the causes of the huge declines are different, the effects are similar. Saudi Arabia is reported to have repatriated as much as $73 billion from its foreign reserves as the country tries to sustain its economy and pay for its military action in Yemen………………………………………..Full Article: Source

This Is How Buhari Will Inject $1bn Into Sovereign Wealth Fund‏

Posted on 30 September 2015 by VRS  |  Email |Print

The Buhari-led administration has proposed to inject $1 billion into the Nigerian Sovereign Wealth Fund (SWF). The three-pronged Sovereign Wealth Fund will finance the Stabilisation Fund, Future Generation Fund and the Nigerian Infrastructure Fund. Buhari plans to add $4.5 billion to the SWF by 2018, dismissing concerns that the fund may not receive additional investment as a result of falling oil prices, which is the bedrock for its funding.
According to the Nigerian Sovereign Investment Authority (NSIA), through its Managing Director, Uche Orji, SWF still has about $1.5 billion assets under management since its establishment in 2011 by the Goodluck Jonathan government………………………………………..Full Article: Source

Kuwait budget deficit hits KD 1.09bn by Aug

Posted on 24 September 2015 by VRS  |  Email |Print

Kuwait’s budget deficit in the first five months of the fiscal year stood at KD 1.094 billion ($3.62 billion) after a deduction for the Future Generations Fund, the finance ministry said yesterday in a statement carried by Kuwait News Agency. The deficit from Apr 1 to Aug 31 stood at KD 361.38 million before the 10 percent contribution of KD 733.50 million to the Future Generations Fund, part of Kuwait’s sovereign wealth fund, the statement said.
The finance ministry said actual expenditure amounted to KD 7.6 billion, an increase of KD 4.4 billion, according to the Central Bank’s monthly reports. The second half of this year will see more spending after paying contractors and importers’ dues, it added………………………………………..Full Article: Source

Nigeria: Oil Price Slump Stalls Funding Of SWF

Posted on 10 September 2015 by VRS  |  Email |Print

The falling prices of crude oil at the international market incapacitated the Federal Government from funding the Sovereign Wealth Fund (SWF). Managing Director of the Fund, Mr. Uche Orji disclosed this on Wednesday when he led other management staff of the organisation to brief President Muhammadu Buhari of the current status of the Fund.
The Federal Government had three years ago establish the SWF with $1billion. The fund is supposed to be funded from the Excess Crude Account, with the Federal Government approving a specific ammount for movement into the fund annually. In an interview with State House Correspondents, the SWF boss said with the current crude oil prices, government cannot afford to make additional contribution to the fund………………………………………..Full Article: Source

African Nations Should Set Up More Sovereign Wealth Funds To Avert Economic Crisis

Posted on 02 September 2015 by VRS  |  Email |Print

Dr Akinwumi Adesina, the newly installed President of the African Development Bank (AFDB) has said that African country would have to set up more Sovereign Wealth Funds to help withstand the next downturn as a result of plunging commodity prices, Bloomberg Reports.
According to Adesina, “will allow countries to have fiscal buffers and liquidity buffers to this kind of shock.” He added that the current crisis is not the only one that would be experienced as “there’s still going to be a lot of disquiet in the market going forward.”……………………………………….Full Article: Source

SOFAZ has no plans to increase gold reserves

Posted on 01 September 2015 by VRS  |  Email |Print

Azerbaijan’s state oil fund SOFAZ, an entity that accumulates and manages Azerbaijan’s oil and gas revenues, has no plans to increase its gold reserves. A source at SOFAZ told Trend on August 29 that as of today, the fund’s reserves portfolio includes 30,175 kilograms of gold, which is about 3.5 percent of its total assets.
“At the moment, increasing gold reserves is not in the plans,” the source said. SOFAZ was established in 1999 with assets worth $271 million. The main purposes of the fund are the management of earnings from the energy sector and the investment of this capital abroad to minimize negative impacts on economy, the prevention of the ‘Dutch disease’, ensuring savings for future generations………………………………………..Full Article: Source

Norway has a secret weapon to deal with falling oil prices

Posted on 25 August 2015 by VRS  |  Email |Print

The decade-long boom in oil and gas prices is over. Those falling oil prices continue to have major consequences for oil-dependent countries Venezuela and Nigeria. Norway’s sovereign wealth fund is the largest in the world — and its value keeps growing, by virtue of a government policy that limits the government’s usage of the fund to just four percent annually.
The fund, however, could be the biggest loser in Monday’s global stock market selloff — with almost two-thirds of its investments in equities. And with the current dip in oil prices, the government may be inclined to change the policy to allow access to more of the fund’s assets………………………………………..Full Article: Source

Oman has run up 1.8b riyal deficit so far

Posted on 25 August 2015 by VRS  |  Email |Print

Oman has run a 1.8 billion riyal (Dh17.09 billion) budget deficit so far this year, according data provided by the Ministry of Finance. The approved deficit for 2015 budget stands at 2.5 billion riyals — an increase of 38.9 per cent compared to last year, according to the budget statement.
Moreover, Oman’s sovereign wealth fund (SWF) has assets of $13 billion, far smaller than other Gulf SWFs. Ministry of Finance data showed allocations for government wages and salaries amounting to 1.5 billion riyals, including 3.5 million riyals as pension payments for retired ministers, 1.3 billion riyals as allowances (including cost-of-living allocations) and 225 million riyals for other dues in 2014………………………………………..Full Article: Source

Kuwait’s fiscal prudence pays off with rating agencies

Posted on 24 August 2015 by VRS  |  Email |Print

Kuwait’s strong fiscal and external accounts are behind the country’s eminently favourable credit ratings, with Standard & Poor’s recently conferring a long-term rating of AA. Understandably, rating agencies derive comfort from the country’s substantial sovereign wealth fund (SWF). Kuwait boasts a substantial reserve that provides the necessary cushion for stakeholders like creditors and exporters.
The sovereign wealth fund, as managed by Kuwait Investment Authority, stood at $592 billion in June, ranked among the top in the world as estimated by the Sovereign Wealth Institute. General reserves have received a major boost over recent years after a decision to raise funding set aside as part of the mandate for the future. In 2013 — or before the drop in oil prices — a decision was made to increase the amount set aside — 25 per cent rather than 10 per cent of oil revenues………………………………………..Full Article: Source

Saudis Could Face An Open Revolt At Next OPEC Meeting

Posted on 21 August 2015 by VRS  |  Email |Print

Saudi and Gulf Arab OPEC members’ foreign currency reserves and sovereign wealth funds (SWF) comprise approximately 78 percent of total OPEC member holdings, $2.73 trillion of $3.05 trillion.
Of the non-Saudi, non-Gulf Arab ally OPEC members, only Libyan per capita resources exceed the average. (The UAE includes data for three SWF funds only: Abu Dhabi Investment Authority ($773 billion), Abu Dhabi Investment Council ($110 billion), and Investment Corporation of Dubai ($183 billion))………………………………………..Full Article: Source

Canada’s natural-resource wealth must be included on balance sheets

Posted on 19 August 2015 by VRS  |  Email |Print

The amount of natural-resource wealth within Canada’s borders is impressive. Natural-resource assets, which include timber, oil, natural gas and other subsoil minerals, have been valued by Statistics Canada at about $1-trillion. This puts Canada in an enviable position relative to other countries.
Similar reasoning is reflected in Norway’s leverage of its natural-resource wealth, largely from oil and gas revenue, into $1.1-trillion in investments through its sovereign wealth fund. Compare that with Alberta’s Heritage Fund portfolio of just $17.9-billion………………………………………..Full Article: Source

Alberta and Norway: Two oil powers, worlds apart

Posted on 17 August 2015 by VRS  |  Email |Print

As world oil production outstrips demand, China’s outlook darkens and prices plumb levels not seen since the Great Recession, energy-exporting countries around the world face a prolonged period of thinner revenues and deepening economic woes. The Alberta Heritage Savings Trust Fund, the province’s rainy-day umbrella, barely has enough capital to deal with a few scattered storms. Norway’s equivalent, which was partly modelled on Alberta’s when it was set up in the early 1990s, could handle a deluge of almost biblical proportions.
Consider the fortune amassed by Norway’s prosperity fund. Norway’s petroleum treasure chest holds assets totalling some seven trillion kroner ($1.1-trillion), making it the world’s largest sovereign wealth fund. It’s a potential shock absorber of a size and scope not available to any other energy producer outside the Arabian Peninsula……………………………………….Full Article: Source

Norway might have to dip into its savings

Posted on 11 August 2015 by VRS  |  Email |Print

If the government has to withdraw money from its $875 billion sovereign wealth fund, it will be a historical step. It’s either that, or heavily rein in fiscal spending at a time when the country needs it most. The state’s spending could start to outstrip income from oil, which it pours into its wealth fund for future generations.
Taking money from the fund wasn’t planned for at least a few decades and no finance minister wants that to be their legacy. Approaching that withdrawal will spawn an ugly debate about what got Norway there faster than expected, and maybe even new legislation………………………………………..Full Article: Source

KSA may increase focus on nonoil revenue generation

Posted on 10 August 2015 by VRS  |  Email |Print

Pressure on Saudi Arabia’s state finances is mounting as oil prices fall but the latest official figures suggest the world’s top crude exporter still has at least several years before it faces a budget crunch. A study by a former SAMA official released last week said the world might have entered a sustained period of low oil prices, leaving Riyadh vulnerable down the road.
But data released by Saudi Arabian Monetary Agency (SAMA) last week showed the Kingdom still far from any fiscal crisis. Net foreign assets at the bank — the best indicator of Riyadh’s fiscal strength, since the bank acts as a sovereign wealth fund — fell $59.8 billion from the end of 2014 to $664.5 billion in June………………………………………..Full Article: Source

Saudi foreign reserves fall to lowest since March 2013

Posted on 07 August 2015 by VRS  |  Email |Print

Net foreign reserves at Saudi Arabia’s central bank fell to 2.492 trillion riyals ($664.5 billion) in June, down 1.2 percent from May to their lowest level since March 2013, latest central bank data has showed. The world’s largest oil exporter has been drawing down its reserves to cover a huge state budget deficit caused by low oil prices.
The central bank serves as the kingdom’s sovereign wealth fund, storing its accumulated earnings from oil exports. Net foreign assets dropped 9.4 percent from a year earlier in June. They peaked at a record $737 billion last August………………………………………..Full Article: Source

Banglades sovereign wealth fund in the offing to fix infrastructure

Posted on 06 August 2015 by VRS  |  Email |Print

Bangladesh plans to form a sovereign wealth fund with its foreign currency reserves to invest in infrastructure, the lack of which is turning out to be the main barrier to getting out of the 6-percent economic growth trap. A sovereign wealth fund (SWF) is a pool of money derived from a country’s reserves, set aside for investment purposes that will benefit the country’s economy and citizens.
The initial size of the fund would be $1-$2 billion, according to Bangladesh Bank Governor Atiur Rahman. At present, the central bank has foreign exchange reserves of more than $25 billion, and by the end of the year will cross the $26-billion mark………………………………………..Full Article: Source

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

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