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Sovereign Wealth Funds Briefing - Archive | November, 2010

Brazil authorizes treasury to issue debt for sovereign fund

Posted on 30 November 2010 by VRS  |  Email |Print

From Dow Jones: The Brazilian government has published a decree permitting the country’s treasury to issue public debt papers at market rates in favor of the country’s Sovereign Wealth Fund.
The sovereign fund will also be allowed to trade fixed-income assets including public debt papers, shares and currencies with the treasury at market rates, according to the decree, Estado said……………………………………….Full Article: Source

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SWFs boost hedge funds portfolios

Posted on 30 November 2010 by VRS  |  Email |Print

From Emirates247.com: Sovereign wealth funds (SWFs) have made hedge funds an increasingly sizeable percentage of their portfolios, especially after the onset of the global financial crisis two years back, an official of a US-based fund of hedge funds (FoHFs) managing firm said.
“As they have evolved over time, SWFs have begun to take more risk in their portfolios in a number of different ways. They have increased direct investments into longer dated assets such as real estate, infrastructure and timber, have often made significant investments in corporate entities and have made hedge funds an increasingly sizeable percentage of their portfolios,”………………………………………Full Article: Source

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KIC plans more joint investments with sovereign funds next year

Posted on 30 November 2010 by VRS  |  Email |Print

From Bloomberg: Korea Investment Corp., the nation’s $37 billion sovereign wealth fund, plans to make three to four strategic investments next year with other state funds to diversify from traditional assets such as bonds and equities.
The Seoul-based fund, known as KIC, posted a 7 percent to 8 percent return this year from stocks and bonds traded in public markets, which make up the bulk of the portfolio, Chief Investment Officer Scott Kalb said. Alternative assets such as private equity, real estate and strategic investments including Chesapeake Energy Corp. have all made money, he said……………………………………….Full Article: Source

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Flowers said to join GIC for $1.5 bln BTG stake

Posted on 30 November 2010 by VRS  |  Email |Print

From Bloomberg: Financier J. Christopher Flowers is in talks to buy a stake in Brazil’s Banco BTG Pactual SA as part of an investor group that includes Government of Singapore Investment Corp., three people with knowledge of the deal said.
Andre Esteves, the Brazilian billionaire who controls Rio de Janeiro-based BTG, is in talks to sell about 15 percent of the firm to the group for about $1.5 billion to fund expansion, according to the people, who asked not to be named because the plans are private……………………………………….Full Article: Source

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Rise of Asia bonds: Temasek

Posted on 30 November 2010 by VRS  |  Email |Print

From Financialstandard.com.au: Asia’s appeal as multi-trillion dollar bond hub is set to accelerate as the region primes itself to become a key alternative funding source for investors, said the chief financial officer of the $147 billion Temasek Holdings.
Leong Wai Leng, chief financial officer of Temasek Holdings, said the market expects some US$17 trillion of public debt refinancing and budget funding obligations to come due from US, UK, Japan and Eurozone over the next three years……………………………………….Full Article: Source

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GLP net nearly doubles on strong Asian growth

Posted on 30 November 2010 by VRS  |  Email |Print

From WSJ: Global Logistic Properties Ltd., a real-estate unit of the Government of Singapore Investment Corp., said its second-quarter net profit nearly doubled because of increased contributions from its China business and the strengthening of the Japanese yen against the U.S. dollar.
Net profit excluding property revaluations for the quarter ended Sept. 30 rose to $74.2 million from $37.4 million a year earlier, GLP said in a statement on Monday. Revenue was $113.3 million, up from $99.8 million……………………………………….Full Article: Source

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Hedge funds woo China’s investors for assets, lobby group says

Posted on 30 November 2010 by VRS  |  Email |Print

From Bloomberg: Hedge Funds are wooing institutional investors in China, as managers struggle to raise assets. China Investment Corp., the nation’s $300 billion sovereign wealth fund, is already investing in hedge funds, Chairman Lou Jiwei said in August last year.
“Over time, China will invest more overseas,” Christophe Lee, chairman of the Alternative Investment Management Association’s Hong Kong and China chapter. “In their overseas investments, we hope they will consider hedge funds as one of their components.”………………………………………Full Article: Source

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China’s CICC gets nod for major shareholding change

Posted on 30 November 2010 by VRS  |  Email |Print

From Chinadaily.com.cn: China International Capital Corp (CICC), the country’s top investment bank, has obtained the approval from the securities regulator for a major shareholding change. Central Huijin Investment Co, the domestic arm of China Investment Corp, the country’s sovereign wealth fund, owns 43.35 percent of CICC.
The China Securities Regulatory Commission (CSRC)on Nov 26 approved CICC’s application for the shareholding change which involved a more than 5 percent stake in the company……………………………………….Full Article: Source

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VietNam Fund enters venture with Japan partner

Posted on 30 November 2010 by VRS  |  Email |Print

From Vnagency.com.vn: CapitaLand Viet Nam Investments Pte Ltd (CVI) has entered into a US$200 million joint venture with Japan’s Mitsubishi Estate Asia Pte Ltd (MEA) and an affiliate of GIC Real Estate, the real estate investment arm of Government of Singapore Investment Corporation, to invest in prime real estate development projects in HCM City and Ha Noi.
CVI, which is a wholly-owned subsidiary of CapitaLand (Viet Nam) Holdings Pte Ltd, will take up a 50-per- cent stake in the joint venture, while the balance will be held in equal proportions by MEA and the affiliate of GIC Real Estate……………………………………….Full Article: Source

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Euro 85bln for Irelands rescue

Posted on 30 November 2010 by VRS  |  Email |Print

From Actionforex.com: As was widely expected, the Irish bailout package details were finally announced Sunday. The €85bn rescue package will be funded with €17.5bn from Irish domestic resources including its sovereign wealth fund, and the remaining amount is being funded from the EFSM, the IMF, the EFSF and bilateral loans.
As for where the funds will flow, €10bn will be used to recapitalize Ireland’s banks, €50bn used for government requirements and €25bn is available for contingency……………………………………….Full Article: Source

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Irish Pension Fund to provide 10 bln Euros of aid package

Posted on 30 November 2010 by VRS  |  Email |Print

From Bloomberg: Ireland’s National Pensions Reserve Fund, the SWF, will provide 10 billion euros of the country’s contribution to an international aid package for its banks and public finances, a spokesman for the fund said.
The government said yesterday that 17.5 billion euros would be provided by Ireland’s reserves for the total 85 billion-euro aid package, led by the European Union and International Monetary Fund……………………………………….Full Article: Source

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The National Pensions Reserve Fund: An obituary

Posted on 30 November 2010 by VRS  |  Email |Print

From Irishtimes.com: The National Pensions Reserve Fund (NPRF), which has died aged nine from infanticide caused by multiple stab wounds, was born under the premise that it would prepare the Irish State for a pensions “time-bomb” due to explode in the decades ahead as Ireland’s population ages inexorably into an impoverished abyss.
It was the best of what would prove to be a series of generally good times for its creator, then Minister for Finance Charlie McCreevy, who legislated that at least 1 per cent of gross national product would be committed to its coffers each year, on top of the proceeds from the flotation of the much-loved Eircom……………………………………….Full Article: Source

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Norway mulls fee cap for Pension Fund Global after ‘reprehensible’ contract

Posted on 30 November 2010 by VRS  |  Email |Print

From IPE: The Norwegian government is considering the introduction of an upper limit for management fees for external managers of its NOK2.9trn (€365bn) Government Pension Fund Global after a contract with no limit was branded “reprehensible”.
State secretary Hilde Singsaas made the suggestion in a statement after the country’s Auditor General criticised the contract, which stipulated no upper limit for performance-related fees……………………………………….Full Article: Source

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France rejects Qatar’s Areva investment terms

Posted on 30 November 2010 by VRS  |  Email |Print

From Reuters: French President Nicolas Sarkozy rejected conditions set by Qatar for its participation in a planned capital increase by French nuclear reactor maker Areva. Areva has been talking to the sovereign wealth funds of Qatar and Kuwait in the hope of sealing their investment by the end of the year.
Qatar is only prepared to take part in the capital hike if it can invest in Areva’s mining activities, Les Echos newspaper said. The Financial Times has also reported that Qatar is seeking guarantees over the value of Areva, for example by having an option to take shares in its uranium mining division……………………………………….Full Article: Source

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Qatar’s debt to peak at $90 bln in 2010: report

Posted on 30 November 2010 by VRS  |  Email |Print

From Emirates247.com: The bulk of the country’s foreign assets are controlled by the Qatari Investment Authority (QIA), one of the world’s fastest growing sovereign wealth funds.
At the end of 2007, QIA’s assets were estimated at around $57 billion but they dipped to nearly $52 billion at the end of 2008 because of the market turmoil……………………………………….Full Article: Source

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Gulf SWFs gain $81bln in 2010

Posted on 29 November 2010 by VRS  |  Email |Print

From Emirates247.com: Strong crude prices allied with a recovery in global markets to boost the combined assets of sovereign wealth funds (SWFs) in Gulf oil exporters by nearly $81 billion in 2010 and the wealth is expected to swell further in 2001, according to a key Western financial institution.

The Abu Dhabi Investment Authority (ADIA), one of the world’s largest SWFs, is projected to gain around $30 billion at the end of 2010 while other government funds in the region will record sharp rises in assets, the Washington-based Institute of International Finance (IIF) said in its quarterly report…………………………………….Full Article: Source

SWFs need more transparency

Posted on 29 November 2010 by VRS  |  Email |Print

From Emirates247.com: Sovereign wealth funds (SWFs) need to enhance transparency following a landmark agreement with the IMF two years ago in a bid to assuage fears about their operations in host countries, a Norwegian minister has said.

Jonas Gahr Store, Minister of Foreign Affairs, said a voluntary code of conduct announced by most world SWFs and their 2008 accord with the International Monetary Fund are only a first step towards more transparency…………………………………….Full Article: Source

Norway Oil Fund should add risk, advisory group says

Posted on 29 November 2010 by VRS  |  Email |Print

From Bloomberg: Norway’s $500 billion Government Pension Fund Global, the world’s second-largest sovereign wealth fund, should invest in riskier assets to take full advantage of its long-term outlook, an advisory group recommended.

The panel, headed by Elroy Dimson, an emeritus professor at the London Business School, said the investor should be more “pro-actively contrarian” since it’s not obliged to deliver a 4 percent return every year, “or even every decade,” according to a report by the Strategy Council released today in Oslo…………………………………….Full Article: Source

Kuwait to invest in Bulgarian farms

Posted on 29 November 2010 by VRS  |  Email |Print

From Standartnews.com: Bulgaria and Kuwait to found a joint company for investments in agriculture in Bulgaria was agreed between Bulgaria’s minister of Agriculture and Foods Miroslav Naydenov and the head of Kuwait Investment Authority Bader Al-Saad, Ministry of Agriculture announced.
However, the final decision will be taken by the governments of the two countries. It is expected PM Boyko Borissov and the Emir of Kuwait Sabah Al-Jaber Al Sabah to sigh an agreement during the visit of the emir to Sofia in March 2011…………………………………….Full Article: Source

A futuristic city in the making

Posted on 29 November 2010 by VRS  |  Email |Print

From Gulf-times.com: Lusail City, Qatar’s largest real estate development project, is going to be a fully functional and integrated city of future. “Intrinsically grounded in history and culture, Lusail City’s master plan is a true reflection of the values of Qatar, project developer Qatar Diar’s chief corporate improvement officer Mohamed al-Hamadi said. Qatari Diar, fully owned by the Qatar Investment Authority, currently has 35 projects under development in more than 20 countries.
Comprising 37sq km of waterfront land master planned into 19 integrated and diverse mixed-use districts, Lusail City is to accommodate about 200,000 residents, would have 165,000 workers, and attract 80,000 visitors…………………………………….Full Article: Source

Huaneng Renewables finds cornerstone investors

Posted on 29 November 2010 by VRS  |  Email |Print

From WSJ: Singapore’s state-owned investment company Temasek Holdings will buy US$50 million of Huaneng Renewables shares, while State Grid International Development Ltd. will invest US$60 million in shares, the person said. Bank of China Investment Ltd. will subscribe for US$30 million of shares.

Huaneng Renewables plans to list shares on the Hong Kong stock exchange on Dec. 16, following its IPO, according to a term sheet seen earlier by Dow Jones Newswires…………………………………….Full Article: Source

Chongqing bank to join competition for international investors

Posted on 29 November 2010 by VRS  |  Email |Print

From Financeasia.com: The Qatar Investment Authority and the Kuwait Investment Authority both participated as cornerstones in the H-share portion of Agricultural Bank of China’s IPO in July and the Kuwait Investment Authority had a similar role in AIA Group’s initial share offering in October.

The other cornerstones on the CRCB offering are: Hong Kong-based fund manager Value Partners, which is taking $80 million of shares; Cheng Yu-tung’s Chow Tai Fook; and Taiwan banking group Fubon. The latter two are each buying $30 million worth of shares…………………………………….Full Article: Source

Super Fund grows for third month

Posted on 29 November 2010 by VRS  |  Email |Print

From Tvnz.co.nz: The New Zealand Superannuation Fund has reported its third straight monthly gain in October, growing $454.9 million. The so-called Cullen Fund, named for its architect Labour Finance Minister Michael Cullen, made a 2.7% return last month, made up mostly from turnarounds in its cash, collateral and currency hedging programmes.

Established to partially fund the universal pensions of an ageing population, the fund’s investment in global bonds grew to $1.33 billion from $1.12 billion in September…………………………………….Full Article: Source

Nigeria: Economic Council approves sovereign wealth fund

Posted on 26 November 2010 by VRS  |  Email |Print

From 234next.com: The National Economic Council (NEC) approved the bill for the establishment of the National Sovereign Wealth Fund (NSWF) which is to replace the excess crude account.
The Minister of Finance, Olusegun Aganga said the bill would be sent to the Federal Executive Council (FEC) for approval before it goes to the national assembly for legislation……………………………………….Full Article: Source

Singapore SWFs show interest in Taiwan investments

Posted on 26 November 2010 by VRS  |  Email |Print

From CNA: The Government of Singapore Investment Corp. (GIC) and Temasek Holdings, another investment arm of the city-state government, have expressed strong interest in investing in Taiwan, a top Taiwanese economic planner said .
Christina Liu, minister of the Council for Economic Planning and Development (CEPD), told reporters that Temasek, in particular, is planning to send representatives to Taiwan in the near term to survey the island’s business environment……………………………………….Full Article: Source

Irish proposal will change sovereign fund’s initial purpose, says IAPF

Posted on 26 November 2010 by VRS  |  Email |Print

From IPE: Ireland’s National Pensions Reserve Fund (NPRF) has seen its original purpose of supporting future retirees change in light of the ongoing crisis, Jerry Moriarty of the Irish Association of Pension Funds (IAPF) has said.
Moriarty, director of policy at the lobbying organisation, was speaking after the Irish government unveiled proposals that would allow the NPRF to invest in Irish bonds for the first time, so far forbidden under the sovereign fund’s investment guidelines……………………………………….Full Article: Source

Ireland to use National Pension Reserve Fund assets

Posted on 26 November 2010 by VRS  |  Email |Print

From Globalpensions.com: The Irish government plans to use assets from the €24bn ($32bn) National Pensions Reserve Fund (NPRF) to support the government bond market and infrastructure investment, the National Recovery Report has confirmed.
The government intends to launch a four-year ‘solidarity’ bond which pays an annual fixed rate of 1% with added bonuses up to 50%, provided pension funds are invested for a longer time. The bond has a similar structure to the ten-year bond, paying a coupon each year and a bonus for investors who hold the bond to maturity. The ten year solidarity bond has raised €300m since its launch in May 2009……………………………………….Full Article: Source

Russia: Kudrin calls for privatization fund

Posted on 26 November 2010 by VRS  |  Email |Print

From Spb.ru: Finance Minister Alexei Kudrin proposed creating a reserve fund of proceeds from privatization, interest from which could be used to plug budget gaps, during a finance forum.
Kudrin premiered the reserve fund idea, in the context of a trend in international finance, on the heels of the recent economic crisis……………………………………….Full Article: Source

Rome prosecutors probe Italian banking giant Unicredit over Libyan stake

Posted on 26 November 2010 by VRS  |  Email |Print

From Adnkronos.com: Prosecutors in the Italian capital, Rome, are probing Libya’s 7.58 percent stake in Italy’s largest bank, Unicredit. Company rules prohibit investors from having the right to cast more than 5 percent of ballots in shareholder votes.
Critics have questioned whether the Libyan Investment Authority and the Central Bank of Libya - both state-owned - are really distinct entities……………………………………….Full Article: Source

Korean investment fund buys more stake in Alberta oilsands

Posted on 26 November 2010 by VRS  |  Email |Print

From Vancouversun.com: The Korean sovereign wealth fund that invested $50 million in one early-stage, Calgary-based oilsands company last summer is putting another $100 million into its partner.
Calgary-based Osum Oil Sands Corp. announced Wednesday it has entered into an agreement to sell to Korea Investment Corp. 7.7 million common shares at $13 per share for $100 million……………………………………….Full Article: Source

China’s Everbright plans to buy a trust firm

Posted on 26 November 2010 by VRS  |  Email |Print

From Peopledaily.com.cn: China’s Everbright Bank, the country’s sixth-largest commercial bank, is considering buying a trust firm, its chairman said on Thursday. With more than 400 branches across the country, Everbright Bank is controlled by Central Huijin, the investment arm of China’s $300 billion sovereign wealth fund.
The plans come as China’s banking regulator recently stepped up scrutiny of banks and trust firms as part of efforts to rein in liquidity……………………………………….Full Article: Source

Future Fund chair calls for NBN transparency

Posted on 26 November 2010 by VRS  |  Email |Print

From Businessspectator.com.au: Future Fund chairman David Murray is seeking further transparency regarding the government’s broadband reforms ahead of a crucial vote on the policy by Telstra shareholders next year.
Mr Murray’s statements come as the Senate prepares to approve the reforms today. He increased pressure on the government to release a detailed cost-benefit analysis of the national broadband network (NBN)……………………………………….Full Article: Source

EDHEC’s ideal investment strategy for sovereign wealth funds

Posted on 26 November 2010 by VRS  |  Email |Print

From IPE: The investment strategy of a sovereign wealth fund (SWF) should consist of three basic building blocks, including liability hedging and an endowment-hedging portfolio, according to research by the EDHEC Risk-Institute.
In its most recent paper, ‘Asset-Liability Management Decisions for Sovereign Wealth Funds’, the business school names the blocks as a performance-seeking portfolio (PSP), an endowment-hedging portfolio (EHP) and a liability-hedging portfolio (LHP). The last should invest heavily in bonds and other assets that closely trace changes in inflation……………………………………….Full Article: Source

The importance of sovereign wealth funds to the world economy

Posted on 26 November 2010 by VRS  |  Email |Print

From Oilprice.com: SWFs are a modern iteration of economic power projection by states on the international scene. In one form or another, vehicles resembling SWFs have been around for a long time.
Similar entities investing state funds, generated from reserves or trade surpluses (such as from natural resources), or utilizing substantial state support or privilege, could very well include conglomerates such as VOC (the Dutch East India Company) or the British East India Company……………………………………….Full Article: Source

Indonesia’s foreign currency reserves breaks new record

Posted on 26 November 2010 by VRS  |  Email |Print

From Cri.cn: A senior official at Indonesian central bank (BI) said on Thursday that the country’s foreign currency reserve has broken a new record to 91.8 billion U.S. dollars.
Sugeng, BI Research and Development Director, said that the record-breaking foreign currency reserves were recorded late last month. He added that the country would enjoy large surplus in its terms of payment this year……………………………………….Full Article: Source

Korea fund buys stake in Canadian oil sands firm

Posted on 25 November 2010 by VRS  |  Email |Print

From Reuters: Osum Oil Sands Corp, a small privately owned oil sands development company, said on Wednesday it will sell C$100 million ($99 million) worth of its shares to Korea Investment Corp, marking the sovereign wealth fund’s second investment in Canada’s oil sands.
Osum, which is developing a thermal oil sands project near Cold Lake, Alberta, and owns properties it estimates contain 9 billion barrels of bitumen in the largely undeveloped Grosmont Carbonate play, said in a press release it sold the South Korean fund 7.7 million shares at C$13 each in a private placement……………………………………….Full Article: Source

Sovereign wealth funds, the rise of the state and you

Posted on 25 November 2010 by VRS  |  Email |Print

From Investingdaily.com: The emergence of sovereign wealth funds (SWF) and other similarly structured state-sponsored and state-owned entities is more evidence of emerging economies exercising increasing influence in the global economy.
SWFs have been key institutional players in the aftermath of the Great Recession, even after many suffered serious losses in their efforts to prop up damaged Western financials. What they do and how they do it were once the object of intense scrutiny, then the source of stabilizing capital……………………………………….Full Article: Source

Nigeria monetary policy must target inflation: IMF

Posted on 25 November 2010 by VRS  |  Email |Print

From Reuters: Monetary policy in Nigeria should be geared toward lowering “stubbornly high” inflation to single digits, a senior International Monetary Fund official said on Wednesday. Legislation to create a sovereign wealth fund in which oil profits will be saved will be sent to the National Assembly next week.
IMF mission chief to Nigeria, Scott Rogers, said in a statement after annual talks with the government that the IMF supported the authorities’ plans to cut the fiscal deficit for 2011-13, because it would help shore up falling international reserves and lower inflation……………………………………….Full Article: Source

South Africa: Divert capital flows ‘into development’

Posted on 25 November 2010 by VRS  |  Email |Print

From Businessday.co.za: A proposal for an African Development Fund — to channel some of SA’s capital inflows into the rest of the continent — is one of the few suggestions in the growth plan wholeheartedly welcomed by economists. It could also “function as a sovereign wealth fund that invests in accumulated foreign reserves in productive projects with a higher yield than investment in developed-country bonds.”
The suggestion of establishing an institution that would invest those inflows into Africa was also seen as one of the few proposals that was entirely new in the document released yesterday……………………………………….Full Article: Source

Ghana: Starve the Stabilisation and Heritage Funds for five years

Posted on 25 November 2010 by VRS  |  Email |Print

From Ghananewsagency.org: Prof George Gyan-Baffour, Member for Wenchi, said the proposed Heritage and the Stabilisation funds that will hold Ghana’s petrol revenue be starved for five years.
He said revenue accrued within the period should be channelled into building sound health, road and agriculture sectors for the sustainable development of the country……………………………………….Full Article: Source

Commonfund risk officer moving to Abu Dhabi Investment Authority

Posted on 25 November 2010 by VRS  |  Email |Print

From Bloomberg: Commonfund, the nonprofit manager whose $1 billion property fund lost most of its value, will lose its Chief Risk Officer William Martin Dec. 31, making him at least the third executive to depart in three months.
Martin is exiting the Wilton, Connecticut, asset manager to join the Abu Dhabi Investment Authority in the same post, according to an investor memo obtained by Bloomberg News and dated yesterday……………………………………….Full Article: Source

Persian gulf investors shun IPOs as Asia sets record

Posted on 25 November 2010 by VRS  |  Email |Print

From Bloomberg: Aluminium Bahrain, owned by sovereign wealth fund Bahrain Mumtalakat Holding Co., raised $339 million after going public at the bottom of the 0.90 dinar to 1.25 dinar range used to sell the stock to money managers.
Nawras, which is controlled by Qatar Telecom QSC, sold shares for 702 baisas each, also the bottom of the range, after taking an additional week to find buyers for the shares. Nawras shares have gained 3.3 percent since they started trading on Nov. 1……………………………………….Full Article: Source

The sweet spot

Posted on 25 November 2010 by VRS  |  Email |Print

From Thedeal.com: Controlled by the Singapore sovereign wealth fund Government of Singapore Investment Corp. Pte. Ltd., known as GIC, Global Logistic owns warehouses and industrial parks in China and Japan. According to Chinese press reports, both China’s national pension fund and its sovereign wealth fund invested in the IPO. GIC continues to hold 43.2%.
The attraction of emerging-markets companies’ listing on New York exchanges has faded over time. Valuations tend to be higher at home than offshore……………………………………….Full Article: Source

Release the hounds, er, Irish SWF!

Posted on 25 November 2010 by VRS  |  Email |Print

From FT Alphaville: Ireland’s prime minister was busy introducing his post-bailout government’s four-year fiscal plan at pixel time. There is a lot to chew on. For starters, the questionable assumption that 2.5 per cent GNP growth will cushion fiscal cuts right up to 2014.
In other fiscal cuts news — VAT is going up, minimum wages are going down, but the critical 12.5 per cent corporate tax is staying put. And there are just too many job cuts to count……………………………………….Full Article: Source

Pension-style investment to benefit SWFs - report

Posted on 24 November 2010 by VRS  |  Email |Print

From Reuters: Sovereign wealth funds would benefit from adopting a pension fund-style investment strategy focusing on meeting future liabilities of the state, rather than outperforming market benchmarks, a new report said on Tuesday.
The paper, published by Nice-based EDHEC Risk Institute, found that a state fund should combine a performance-seeking portfolio invested in equities, an endowment-hedging component customised to meet the risk exposure and another that invests in bonds to hedge interest risks……………………………………….Full Article: Source

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Sovereign funds should take different investment approach — EDHEC

Posted on 24 November 2010 by VRS  |  Email |Print

From Pionline.com: Sovereign wealth funds should split their investments into returns-seeking and hedging portfolios tailored to each fund’s characteristics, according to a new paper by EDHEC. The paper, funded by Deutsche Bank, suggests SWFs create hedging portfolios tailored to their income from — and payouts to — their state sponsors.
The approach “can in fact be seen as the extension to sovereign wealth funds of the liability-driven investing paradigm recently developed in the pension fund industry,” according to the paper, “Asset-Liability Management Decisions for Sovereign Wealth Funds.”………………………………………Full Article: Source

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New publication proposes an optimal investment strategy for sovereign wealth funds

Posted on 24 November 2010 by VRS  |  Email |Print

From Edhec-risk.com: A new publication, “Asset-Liability Management Decisions for Sovereign Wealth Funds,” contains the results of the first-year research work conducted at EDHEC-Risk Institute within the Deutsche Bank research chair on asset-liability management (ALM) techniques for sovereign wealth fund management.
Under the responsibility of Professor Lionel Martellini, the scientific director of EDHEC-Risk Institute, this chair examines optimal allocation policies for sovereign wealth funds……………………………………….Full Article: Source

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Sovereign wealth: Emerging fund set to vault into higher tier

Posted on 24 November 2010 by VRS  |  Email |Print

From Zawya.com: Qatar does not always make it on to the list of the world’s top 10 sovereign wealth funds. It may all be guesswork, as the tiny state and other funds closely guard the size of their assets, but Doha’s emerging fund, with an estimated asset pool of $85bn-$100bn, is dwarfed by older funds controlled by the governments of Abu Dhabi, China, Norway and Kuwait, to name a few.
Yet bankers are aware that the seven-year-old fund will vault its way through the ranks in the coming years, as its excess gas and oil revenues surpass the state’s wildest dreams……………………………………….Full Article: Source

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Clock ticking for Ireland’s sovereign wealth fund

Posted on 24 November 2010 by VRS  |  Email |Print

From Reuters: Ireland’s 24-billion-euro sovereign wealth fund could disappear long before it gets to plug the pension shortfall it was originally intended for as Dublin is expected to use more of the stash to fix its banks.
On one level, there may never be a more appropriate time to tap a “rainy-day” fund of savings. But using up tomorrow’s savings today breaches the fund’s original mandate and illustrates how the fate of these funds (SWFs) fate is ultimately dictated by sponsoring governments……………………………………….Full Article: Source

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South Africa plans to establish sovereign wealth fund

Posted on 24 November 2010 by VRS  |  Email |Print

From Bloomberg: South Africa’s government said it will establish a sovereign wealth fund to help manage the country’s foreign reserves and the value of the currency.
The proposal is contained in the government’s new economic growth strategy, which was released in Cape Town today and aims to create 5 million jobs over the next decade. A road outline of the plan, which was drafted by the Economic Development Ministry, was released on Oct. 26……………………………………….Full Article: Source

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