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Sovereign Wealth Funds Briefing - Archive | July, 2009

Russia to sell $20 bln of Eurobonds

Posted on 28 July 2009 by VRS  |  Email |Print

From The Reserve Fund, one of the two sovereign wealth funds, will be exhausted in 2010, the Finance Ministry of Russia said.
The National Welfare Fund, which contained 2.8 trillion rubles as of July 1, will total 2.3 trillion rubles at the end of next year, 1.6 trillion rubles in 2011 and 940 billion rubles in 2012, the ministry said………..Full Article: Source

Time for oil fund - Scottish Finance Secretary

Posted on 28 July 2009 by VRS  |  Email |Print

From Scottish oil wealth must leave a lasting legacy for the country, Finance Secretary John Swinney will say later this week.

The Scottish Government will advance its case for an oil fund for Scotland, part of the next stage of the National Conversation………..Full Article: Source

Changing attitudes towards SWFs

Posted on 27 July 2009 by VRS  |  Email |Print

From Until the end of 2007, Western media, governments and regulators often seemed more concerned about protecting domestic firms from investments by sovereign wealth funds (SWFs) than about attracting capital inflows.
Politicians in many countries called for the regulation of sovereign foreign investments at that time, when SWF investments were growing rapidly………..Full Article: Source

Deals show CIC diversifying

Posted on 27 July 2009 by VRS  |  Email |Print

From China Investment Corporation (CIC), the sovereign wealth fund that manages about a tenth of the country’s over $2 trillion foreign reserves, appears to be diversifying and turning to resources and commodities, according to a market analyst.

According to a recent Reuters report citing unnamed sources, CIC acquired a 1.1 percent stake valued at 240 million British pound ($394 million) in Diageo, a leading UK-based group that owns labels such as Johnnie Walker and Baileys………..Full Article: Source

Bahrain fund seeks advisers to rebuild Gulf Air

Posted on 27 July 2009 by VRS  |  Email |Print

From Reuters: Bahrain’s sovereign wealth fund Mumtalakat is seeking advisers to help it rebuild the business of state-owned carrier Gulf Air, it said in a statement on Sunday.

It said the consultants would report to the airline’s incoming Chief Executive Samer Majali, who is taking up his post on Aug. 1 and “who has been appointed to lead Gulf Air as it moves into the next phase of its strategy to rebuild the business”………..Full Article: Source

S South governors to float $100mln fund

Posted on 27 July 2009 by VRS  |  Email |Print

From The five states in the South-south geo-political zone will float a 100-million dollar sovereign wealth fund that will attract investment around the world.
An indication to this emerged when the South-south Governors’ Forum accepted a report submitted to it by an Economic Committee headed by Prof. Pat. Utomi during its meeting in Asaba………..Full Article: Source

Temasek has its work cut out for it

Posted on 27 July 2009 by VRS  |  Email |Print

From It has been three days now since the sudden announcement that Charles ‘Chip’ Goodyear won’tbe taking the reins at Temasek Holdings and that current CEO Ho Ching will be staying on.

People are still reeling from the shock and floating all sorts of theories to explain the development………..Full Article: Source

Ho Ching’s right-hand men and women

Posted on 27 July 2009 by VRS  |  Email |Print

From Now that Temasek Holdings’ bid to hire a leader from outside the company has failed, the spotlight is turning to the possible candidates within.

Working alongside chief executive officer Ho Ching is a top management team with ‘a diversity of backgrounds and experiences’, according to Temasek’s annual report last year………..Full Article: Source

A great trade-off

Posted on 27 July 2009 by VRS  |  Email |Print

From When the Terengganu Investment Authority (TIA) was set up with its much-touted air-tight governance structure, no one doubted that the biggest test to its paper-perfect concept would be in its execution.
What we weren’t prepared for was how soon that test would come. Rhetoric, meet reality………..Full Article: Source

GIC cooperates with GDF SUEZ to recourse finance USD 2.1 bln project

Posted on 27 July 2009 by VRS  |  Email |Print

From Gulf Investment Corporation (GIC) announced on Sunday that in cooperation with GDF SUEZ, they have completed the limited recourse financing of the Al-Dur Independent Water and Power Producer (IWPP) project -the largest privately-owned industrial project in Bahrain- with the cost of USD 2.1 billion.

The Kuwait based corporation said in a press release that “Financing a project of this size is a landmark in the financial markets after the advent of the economic crisis.” On the 28th of August 2008, the Project was awarded to GDF SUEZ and GIC by the Bahrain Ministry of Finance following an international competitive tendering process………..Full Article: Source

Russia may seek loans of $18bln

Posted on 27 July 2009 by VRS  |  Email |Print

From Russia is looking to borrow $18 billion abroad next year to help fund its budget deficit, while revenues could get a $2 billion boost from higher taxes for the gas sector, a Finance Ministry source said Friday. The bulk of the deficit will be funded from Russia’s oil wealth funds.

The budget and the scale of borrowing have been the subject of hot debate as the government seeks the best way to fund the high spending needed to see the economy out of recession………..Full Article: Source

Nigeria’s excess crude fund, external reserves drop

Posted on 27 July 2009 by VRS  |  Email |Print

From Nigeria’s excess crude account has dropped from $20 billion (N3.004 trillion) at the beginning of the year to $11.2 billion (N1.646trn) in June.
This implies that in the last six months, the various tiers of government in the federation have shared a total of $9bn (N1.323tr) from that account………..Full Article: Source

Qatar’s master plan

Posted on 27 July 2009 by VRS  |  Email |Print

From Sovereign wealth fund specialist Sven Behrendt of the Carnegie Middle East Center in Beirut says that Germany recently passed legislation, similar to that in the United States, which calls for a review of any non-European investment.
As one of the lead bankers flatly noted to me on background, there is no way the government would want any foreign entity to be the largest shareholder in a German icon, whether it is Porsche or Volkswagen………..Full Article: Source

Rallying call

Posted on 27 July 2009 by VRS  |  Email |Print

From Gulf sovereign wealth funds (SWFs) have seen the value of their holdings cut by roughly $100bn to $1.1 trillion between the end of last year and last month, according to US consultancy firm RGE Monitor.

Furthermore, in the 13 months that followed Paulson’s visit not only has the global financial crisis deepened and widened to the shores of the Arabian Gulf, but the price of oil - the principal revenue for the hydrocarbon-reliant region - has more than halved………..Full Article: Source

Australia: Limit foreign ownership of key industries

Posted on 27 July 2009 by VRS  |  Email |Print

From Following the attempted move by the Chinese Government-owned corporation Chinalco to take a large share in the mining company Rio Tinto, the National Civic Council (NCC) has called for the federal parliament to restrict foreign ownership of strategic Australian industries.
NCC national vice-president Patrick J. Byrne, in a written submission, stated that foreign investment rules should be tightened regarding investment in Australian companies by foreign government-owned sovereign wealth funds (SWFs), and by foreign government-owned businesses………..Full Article: Source

China and the world economy

Posted on 27 July 2009 by VRS  |  Email |Print

From Reuters: A couple of years ago we looked at this in the context of Sovereign Wealth Funds. Add in large foreign exchange reserves, government pension funds and state owned enterprises, and the role of the state has become far more important.

Finally, China’s influence on global policy forum is important. Already this crisis has seen a shift, with the G20 (Group of Twenty) taking a prominent role………..Full Article: Source

SWF’s importance goes as investors baulk

Posted on 24 July 2009 by VRS  |  Email |Print

From The Australian: Chip Goodyear’s shock decision to pull out of plans to head up Singapore’s $100 billion investment agency Temasek again turns the spotlight on the complex world of sovereign wealth funds.

The controversy over the growing power of these funds, which reached a peak at the top of the boom in 2007, has temporarily abated because of the global financial crisis………..Full Article: Source

Russia moves $43.7 bln from SWF to cover shortfall

Posted on 24 July 2009 by VRS  |  Email |Print

From Bloomberg: Russia will transfer 1.36 trillion rubles ($43.7 billion) from the Reserve Fund, one of its two sovereign wealth funds, in the third quarter as the government tries to plug its first budget shortfall in a decade.
The Finance Ministry will use the cash to finance spending during the quarter, according to a decree signed by Prime Minister Vladimir Putin and published on the government’s Web site late yesterday………..Full Article: Source

French SWF in no hurry to divest holdings - CEO

Posted on 24 July 2009 by VRS  |  Email |Print

From The newly created French sovereign wealth fund Fonds Strategique d’Investissement, or FSI, is in no hurry to sell stakes in listed companies it owns to fund future investments, but will use the dividends it receives from its holdings, its Chief Executive Gilles Michel told Dow Jones Newswires.

FSI was launched last December by French President Nicolas Sarkozy in the thick of the global downturn to provide financial support via minority shareholdings to companies deemed strategic to the French economy or those with a strong potential for innovation and sector leadership………..Full Article: Source

Mumtalakat ups airplane finance on strong demand

Posted on 24 July 2009 by VRS  |  Email |Print

From Reuters: Bahrain’s sovereign wealth fund Mumtalakat extended the aircraft refinancing it sought for Gulf Air to three airplanes from two initially planned due to strong investor demand, one of the lead arrangers said on Thursday.

“From the outset they planned to finance two planes, but increased it to three due to strong demand,” Ahmed Abbas, chief executive of Bahrain-based Islamic investment bank Liquidity Management Center (LMC) told Reuters………..Full Article: Source

State Oil Fund of Azerbaijan to increase up to $12 bln in 2010

Posted on 24 July 2009 by VRS  |  Email |Print

From International rating agency Standard & Poor’s has published its outlook “How does Azerbaijan react to the world economic crisis?”

Then outlook says that if prices for oil increase and expenditures do not exceed the oil price level stipulated in State Budget, then by the end of 2009 volume of finances in State Oil Fund of Azerbaijan will grow up to $11.5-12 bn versus $11.2 bn in December 2008………..Full Article: Source

Qatar to acquire 17pct VW stake from Porsche

Posted on 24 July 2009 by VRS  |  Email |Print

From Dow Jones: Qatar Investment Authority will take a stake of around 17% in Volkswagen AG by acquiring share options held by Porsche Automobil Holding SE, a person familiar with the negotiations told Dow Jones Thursday.

Porsche currently holds around 51% of Volkswagen ordinary shares and has options to purchase a further stake of around 20%………..Full Article (Subscription Required): Source

Qatar scores coup at Porsche riding family feud to VW stake

Posted on 24 July 2009 by VRS  |  Email |Print

From Bloomberg: Qatar used its $63 billion sovereign wealth fund to give the world’s second-richest country behind Liechtenstein investment clout, snapping up stakes in established brands or troubled companies in need of cash.
Four years after its inception, the fund has become the biggest shareholder in Barclays Plc, J. Sainsbury Plc and Credit Suisse AG…………Full Article: Source

Temasek Goodyear split surprises Singapore finance community

Posted on 24 July 2009 by VRS  |  Email |Print

From Singapore’s sovereign wealth fund and CEO-heir apparent Charles “Chip” Goodyear have parted ways.
The company and the high-profile former resources executive say the decision was based on strategy differences. But analyst say it’s likely clashes in management style caused the split………..Full Article: Source

Moody’s assigns Baa3 issuer rating to Kuwait Investment Company

Posted on 24 July 2009 by VRS  |  Email |Print

From Moody’s Investors Service today assigned a Baa3 (negative outlook) long-term issuer rating to Kuwait Investment Company (KIC).
The rating reflects Moody’s application of its Global Rating Methodology for Asset Management Firms and Joint Default Analysis (JDA) methodology to government-related issuers (GRIs)………..Full Article: Source

NZ state fund to invest in public-private partnership

Posted on 24 July 2009 by VRS  |  Email |Print

From Reuters: A New Zealand fund that will use private capital to help fund public infrastructure works has signed up the state pension fund as its first investor, the manager of the fund said on Thursday.

The New Zealand Superannuation fund will contribute up to NZ$100 million ($66 million) to a fund with an initial investment limit of NZ$500 million, to be managed by infrastructure investment firm HRL Morrison and Co………..Full Article: Source

Recovery by National Pensions Reserves Fund

Posted on 24 July 2009 by VRS  |  Email |Print

From The National Pensions Reserve Fund lost almost a quarter of its value last year, but regained over €3bn. in the first half of this year.

The figures are contained in the annual reports of the National Treasury Management Agency………..Full Article: Source

China fund to expand Africa ties

Posted on 24 July 2009 by VRS  |  Email |Print

From WSJ: The China-Africa Development Fund, which was founded by state-owned lender China Development Bank Corp., plans to raise $2 billion by November to help expand business links between Africa and China, CDB Vice Governor Li Jiping said.

Separately, China’s Communist Party leaders vowed on Thursday to continue their focus on steady economic growth, carrying on with an active fiscal policy and moderately loose monetary policy in the second half…………Full Article (subscription Required): Source

China to buy into Canadian potash projects in Africa

Posted on 24 July 2009 by VRS  |  Email |Print

From The world’s largest consumer of mineral resources is fast becoming a key source of mining capital for Canadian companies – large and small. This reality was underscored earlier this month when state-owned China Investment Corp. purchased a 17.2% equity stake in Teck Resources.

Such developments bode especially well for Allana Resources. It announced just this week its own preliminary joint venture agreement with a major state-run Chinese mining company to build a potash mine on Allana’s property in the potash-rich Danakil Evaporate Basin………..Full Article: Source

Fairbanks’ permanent fund reverses slide

Posted on 24 July 2009 by VRS  |  Email |Print

From The Fairbanks Permanent Fund continues to inch upward, paralleling a slow rebound in financial markets, financial advisers told city officials Wednesday.

The 12-year-old fund — a significant contributor, through earnings, to the city’s budget — grew by 8.7 percent between March and June, according to the Anchorage-based firm Alaska Permanent Capital Management………..Full Article: Source

Malaysia’s international reserves posted at $91.2 bln

Posted on 24 July 2009 by VRS  |  Email |Print

From Xinhua: Malaysia’s central bank said on Wednesday that its international reserves amounted to 91.2 U.S. billion U.S. dollars as of July 15 this year, slightly down from 91.5 billion U.S. dollars on June 30.
The bank said that its reserves position was sufficient to finance 8.8 months of retained imports and it was 3.8 times the short-term external debt………..Full Article: Source

SWFs no longer scary

Posted on 23 July 2009 by VRS  |  Email |Print

From Does anyone remember a year ago when every pundit and media outlet predicted that Sovereign Wealth Funds were going to take over the world?
The assets they controlled were growing so quickly due mostly to the commodity boom that it was starting to create hysteria in the United States. It’s amazing how quickly the conventional wisdom can change……….Full Article: Source

Let’s get the evidence on SWFs

Posted on 23 July 2009 by VRS  |  Email |Print

From Until the end of 2007, Western media, governments and regulators often seemed more concerned to protect domestic companies from investments by sovereign wealth funds (SWFs) than to attract their capital.

Politicians in many countries called for the regulation of sovereign foreign investments at a time when they were growing rapidly……….Full Article: Source

NBK buys 13.2pct of KIA’s stake in Boubyan for $295mln

Posted on 23 July 2009 by VRS  |  Email |Print

From National Bank of Kuwait (NBK) has bought 13.2 percent of the Kuwait Investment Authority’s (KIA) stake in Islamic lender Boubyan Bank for $295m at a public auction.

NBK bought 154 million shares in the bank for KD84.7m ($295m) or 550 fils a share, taking its holding in Boubyan to 321 million shares, or 27.5 percent……….Full Article: Source

Temasek looks to plan B after Goodyear leaves

Posted on 23 July 2009 by VRS  |  Email |Print

From Singapore state investor Temasek’s plan to bring in its first foreign CEO lies in tatters as CEO-designate Chip Goodyear walked out less than six months after he was named to the top post.

The departure of American Goodyear, a former BHP Billiton (BHP.AX) head, is a setback for Temasek as it tries to present a more international image, after its close government links meant its investments in Southeast Asia and the West drew fire from the public, regulators and lawmakers outside the city-state……….Full Article: Source

Goodyear’s exit ‘unfortunate’, says Singapore Finance Ministry

Posted on 23 July 2009 by VRS  |  Email |Print

From The Singapore Ministry of Finance (MOF) said yesterday it was “unfortunate” that Temasek Holdings’ plan to install a new chief executive (CEO) had not worked out despite considerable efforts by its board and the present CEO, Ho Ching.

MOF was responding to queries from The Straits Times on whether it had any input into the decision-making process that led to the derailing of Charles “Chip” Goodyear’s tenure at Temasek……….Full Article: Source

Goodyear’s Singapore sling

Posted on 23 July 2009 by VRS  |  Email |Print

From The abrupt end to Chip Goodyear’s planned ascension to the chief executive role at Singapore’s smaller sovereign wealth fund, Temasek Holdings, is causing controversy and bemusement in Singapore and elsewhere.

While the announcement that Goodyear would no longer take up the position referred to “differences regarding certain strategic issues that could not be resolved”, Singapore is abuzz with speculation of the true causes of the falling out……….Full Article: Source

He wanted to trim holdings

Posted on 23 July 2009 by VRS  |  Email |Print

From Mr Charles ‘Chip’ Goodyear, the CEO-designate at Temasek Holdings , pulled out barely six months after accepting the post at Singapore’s best-known wealth fund.

Temasek said on Tuesday Goodyear had decided not to become the chief executive of the state investment firm due to differences over strategy, adding that Ms Ho Ching, the wife of Singapore’s prime minister and current CEO, would continue as executive director and chief executive……….Full Article: Source

Did someone forget this thing called culture?

Posted on 23 July 2009 by VRS  |  Email |Print

From As the buzz about Charles Goodyear’s sudden departure from Temasek Holdings continues to dominate corporate discussions, one can’t help but ask this question:

Could a no-nonsense CEO who bulldozed his way through a traumatic merger to form mining giant BHP Billiton, retrenching thousands in the process, have fitted into a Singapore culture that for all its outward glow of modernity is essentially conservative?………Full Article: Source

CIC says it did not take a stake in Diageo

Posted on 23 July 2009 by VRS  |  Email |Print

From China Investment Corp, the Chinese sovereign wealth fund, says it is not the owner of a recently acquired 1.1 per cent stake in Diageo, the British drinks group, as reported in the Financial Times on Tuesday
On Monday, Diageo told the FT that CIC, established in 2007 to manage $200bn of the country’s foreign exchange reserves, had bought a stake worth £221m ($364m) in late June……….Full Article: Source

Qatar Holdings in talks on $6-7bln loan

Posted on 23 July 2009 by VRS  |  Email |Print

From Qatar Holdings, which manages strategic and direct investments by the State of Qatar, is talking to banks about a $6-7 billion loan linked to its possible investment in Porsche, bankers said on Tuesday.

Porsche has been talking to Qatar about a deal that would give Qatar a 20 percent stake in Volkswagen via derivative contracts as it struggles to cement a merger with Volkswagen……….Full Article: Source

Dubai establishes $20bln support fund

Posted on 23 July 2009 by VRS  |  Email |Print

From The Dubai government launched a bailout fund on Wednesday to manage and distribute the proceeds of a $20 billion sovereign bond programme intended to help cash-strapped companies in the emirate.

The “Dubai Financial Support Fund” will provide loans to government and non-government entities “engaged in projects of strategic and developmental importance to Dubai,” said Abdulrahman Al Saleh, Director General of Dubai’s Department of Finance……….Full Article: Source

What are SWFs buying?

Posted on 23 July 2009 by VRS  |  Email |Print

From A presentation from Deutsche Bank online highlights the way sovereign wealth funds have used the crisis to allocate resources around the world.………Full Article: Source

$140mln facility success

Posted on 23 July 2009 by VRS  |  Email |Print

From Bahrain Mumtalakat Holding Company has announced the successful closure of a $140 million syndicated Ijara facility, arranged by Liquidity Management (LMC) to refinance Gulf Air aircraft.
The five-year tenure syndicated facility generated significant interest from investors across the world. The proceeds of the facility will be used by Mumtalakat to refinance three Airbus A330 aircraft……….Full Article: Source

NSSF in plea to Uhuru on investments plan

Posted on 23 July 2009 by VRS  |  Email |Print

From The National Social Security Fund (NSSF) has faulted the proposal by Treasury that schemes, which receive statutory contributions, only invest in Government securities and infrastructure bonds.

In his Budget speech, Finance Minister Uhuru Kenyatta sought amendments to the Retirement Benefits Authority Act to effect the changes……….Full Article: Source

What can China get for its $2 trillion?

Posted on 23 July 2009 by VRS  |  Email |Print

From WSJ: With the continued growth in China’s official foreign-exchange reserves now having pushed them past the $2 trillion mark, the debate over what to do with them shows no sign of dying down.

There’s an increasingly strong sentiment in China that these funds should be used to benefit the nation, rather than being lent to the U.S. and other rich countries……….Full Article: Source

South Korean SWF to boost equities investment

Posted on 22 July 2009 by VRS  |  Email |Print

From Bloomberg: Korea Investment Corp., the country’s $30 billion sovereign wealth fund, said it will increase the equities allocation in its portfolio later this year and target additional investments in the U.S. and Asia.

“We think it’s unlikely that bonds are going to continue to outperform stocks from here over the long term,” Chief Investment Officer Scott Kalb said today in an interview in Seoul. “We’re moving more towards equity.” ……..Full Article: Source

Partners Group to manage Korea SWF private equity

Posted on 22 July 2009 by VRS  |  Email |Print

From Reuters: Swiss alternative asset manager Partners Group said on Tuesday it received an investment mandate from Korea Investment Corporation, a sovereign wealth fund that manages assets for the Korean government and the Bank of Korea.

Under the terms of the mandate, Partners Group will buy into private equity portfolios on the secondary market………Full Article: Source

Korean sovereign, pension funds preparing to load up on equities

Posted on 22 July 2009 by VRS  |  Email |Print

From Its sights set on the United States and Asia, South Korea’s $30 billion sovereign wealth fund is hunting for equities. Korea Investment Corp. (KIC) doesn’t see bonds outperforming stocks over the long term, which is what has prompted the move.

Once the reallocation is executed, equities will account for half of KIC’s “traditional” investments. Today, it stands at 40%. High quality equities and fixed income securities comprise 90% of KIC’s portfolio, with the rest, one would gather, consisting of “non-traditional” investments………Full Article: Source

Abu Dhabi SWF in JV with Austria’s Berndorf

Posted on 22 July 2009 by VRS  |  Email |Print

From It has been a busy month for Aabar Investments PJSC of Abu Dhabi. The sovereign fund just created a joint venture with Austrian technology and metalware firm Berndorf AG. Named ABAG Aktiengesellschaft Inc., the JV will initially be funded with €150 million ($213 million) and will invest in medium-sized technology-based companies and real estate in Europe.

Abar will contribute two-thirds of the funding, while a Berndorf team will manage ABAG………Full Article: Source

July 2009
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