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Sovereign Wealth Funds Briefing - Archive | December, 2012

KIA fosters forum on investment opportunities

Posted on 06 December 2012 by VRS  |  Email |Print

Kuwait Investment Authority (KIA) organized a forum in cooperation with Morgan Stanley Corp. at the headquarters of the Arab Fund for Economic and Social Development (AFESD).
Abdullatif al-Hamad, board chairman of AFESD, in a speech opening the forum, applauded such meetings among finance and economy specialists in that they offered an opportunity to examine the global financial and economic picture and seek solutions for problems affecting that picture………………………………………..Full Article: Source

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Qatar Holding raises stake in QE to 88pct

Posted on 06 December 2012 by VRS  |  Email |Print

Qatar has upped its stake in its bourse from 80 percent to 88 percent, with NYSE Euronext holding the remaining 12 percent stake.According to a press statement issued by Qatar Exchange (QE) yesterday, Qatar Holding which had 80 percent stake in the bourse, has bought back eight percent stake from NYSE Euronext.
Qatar Holding is the direct investment arm of Qatar’s strategic sovereign wealth fund, the Qatar Investment Authority (QIA). Euronext had bought 20 percent stake in the QE in 2009 as part of a five-year strategic agreement to transfer knowledge and develop the Qatari equity market………………………………………..Full Article: Source

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Let’s change the way Alaska Permanent Fund pays dividends

Posted on 06 December 2012 by VRS  |  Email |Print

This year Alaskans received a dividend of $878, not bad compared to all the other states, but this dividend is the smallest since 2005, and it is only the second time in more than 20 years that the dividend has been below $900 per person. Alaska’s Permanent Fund Dividend (PFD) needlessly fluctuates widely.
This year’s dividend is 25 percent smaller than last year’s dividend of $1,174, and it is 57 percent smaller than the 2008 record-high dividend of $2,069 (not counting the one-time supplement of $1,200 that was added to that year’s dividend)………………………………………..Full Article: Source

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Build pipeline with PFD investment

Posted on 06 December 2012 by VRS  |  Email |Print

Alaskans have about $40 billion invested in our Alaska Permanent Fund. These dollars are invested in businesses and nations throughout the world. Most believe dollars are wealth. In the end, dollars are only a tool used to help the people prosper. Our dollars, created by the private Federal Reserve Bank are accepted around the globe. They are backed by nothing more than the “good faith and credit” of the American people.
One day, the people of the world will no longer accept our dollars, simply on “good faith and credit.” What happens to our permanent fund then? Do we actually own some tangible assets?……………………………………….Full Article: Source

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Argentina’s oil rich Neuquen Province mulls sovereign wealth fund

Posted on 05 December 2012 by VRS  |  Email |Print

Argentina’s Neuquen Province plans to set up a sovereign wealth fund to save some of the royalties it expects to reap from the development of its vast unconventional oil and gas resources. Neuquen Governor Jorge Sapag compared the plan to Norway’s decision to sock away the windfall revenues from oil and gas production in the North Sea.
“Forty years ago Norway was a very poor country,” Mr. Sapag said in an interview. “Like Norway, I think we can have a fund to offer … pensions. I’m not saying we’ll be as lucky as Norway, but we are putting together a similar model.”……………………………………..Full Article: Source

African countries come to the sovereign wealth fund party

Posted on 05 December 2012 by VRS  |  Email |Print

Many of the countries with the largest oil reserves also boast the largest sovereign wealth funds (SWFs). And yet African producers, like newcomer Ghana, Angola, and Nigeria which has been pumping oil since the 1950s, haven’t saved much of their oil revenue.
Now, in an effort to replicate the long-term growth of funds like Norway’s $600 billion Government Pension Fund accrued from North Sea riches, and the Abu Dhabi Investment Authority with assets somewhere around $900 billion, all of these African countries are in the process of launching their own SWFs………………………………………Full Article: Source

Nigeria’s Excess Crude Account savings double to $9 bln

Posted on 05 December 2012 by VRS  |  Email |Print

Nigeria has doubled savings in its Excess Crude Account (ECA), now totalling $9 billion, amidst efforts to improve fiscal discipline and economic stability in the country. Finance Minister Ngozi Okonjo-Iweala revealed that funds in the ECA have grown to at least $9 billion, up from last year’s savings figure of $4 billion.
“We have about $9 billion in the excess crude account. Last year it was $4 billion, so it’s more than doubled,” Okonjo-Iweala said………………………………………Full Article: Source

Mumtalakat supports Bahrain women’s day celebration

Posted on 05 December 2012 by VRS  |  Email |Print

Bahrain Mumtalakat Holding Company (Mumtalakat), the investment arm of the Kingdom of Bahrain, announced its Silver Sponsorship to the Bahrain Women’s Day celebrations organized by the Supreme Council for Women. The event will be held on Wednesday 5th December, under the patronage of Her Royal Highness Princess Sabeeka bint Ebrahim Al Khalifa, wife of His Majesty the King and the president of the Supreme Council for Women.
Mr. Mahmood Hashim Al Kooheji, Chief Executive Officer of Mumtalakat said: “We would like to extend our sincere thanks and appreciation to Her Royal Highness Princess Sabeeka bint Ebrahim Al Khalifa for her continuous support to the role of Bahraini women in the Kingdom of Bahrain………………………………………Full Article: Source

Olam says banks raised no credit concerns in Temasek talks

Posted on 05 December 2012 by VRS  |  Email |Print

Olam International, the commodity trader that Muddy Waters LLC said is in danger of failing, said banks hired to help sell US$1.25 billion in bonds and warrants didn’t raise concerns about its credit position in discussions with shareholder Temasek Holdings.
Credit Suisse Group, DBS Bank, HSBC Holdings and JPMorgan Chase “confirm that there was no mention of any concern regarding Olam’s credit position in their discussions with Temasek,” which is supporting the raising, Singapore-based Olam said in a statement on its website………………………………………Full Article: Source

Khazanah keen to increase investments in OIC countries

Posted on 05 December 2012 by VRS  |  Email |Print

Khazanah Nasional Bhd is keen to increase its current investments in the Organisation of Islamic Cooperation (OIC) member countries but will do it in an orderly manner.

Its managing director, Tan Sri Azman Mokhtar, said Khazanah was currently present in a quarter of the 56 OIC member countries, either directly or indirectly in companies controlled by it………………………………………Full Article: Source

Norway sovereign wealth fund’s plan to spend bln in U.S. real estate excites institutional owners

Posted on 05 December 2012 by VRS  |  Email |Print

Norway has just brought an early Christmas Holiday present to American institutional owners of large Class A office complexes and other conservative property assets in major cities and developed malls.
Norway’s $660 billion sovereign wealth fund, the world’s largest, announced it is entering the U.S. real estate investment market for the first time. The fund plans to invest about $11 billion in various countries………………………………………Full Article: Source

Sovereign wealth funds and the foreign sovereign tax exemption

Posted on 05 December 2012 by VRS  |  Email |Print

The taxation of Sovereign Wealth Funds in the United States is outmoded and due for reconsideration. Offering a tax exemption to the billion dollar investment funds owned by foreign governments is both unfair and fails to achieve the goals of the foreign sovereign tax exemption.
Founded in the principles of sovereign immunity, the foreign sovereign tax exemption, codified in I.R.C. §892, fails to satisfy the Congressional goals that motivated its creation. This Article explains the current taxation of foreign sovereigns and, by extension, Sovereign Wealth Funds. ……………………………………..Full Article: Source

S.Korea’s foreign reserves keep record-breaking trend in November

Posted on 05 December 2012 by VRS  |  Email |Print

South Korea’s foreign currency reserves maintained their record-breaking trend for four straight months in November amid the persistent current account surplus, central bank data showed Wednesday.
Bank of Korea (BOK) lifted its gold holdings by 14 tons last month in a bid to diversify its foreign reserves. Foreign reserves reached a fresh monthly high of 326.09 billion U.S. dollars as of the end of November, up from the previous record high of 323.46 billion dollars for October, according to the BOK………………………………………Full Article: Source

Philippine: Forex reserves to hit record high of $83bln by year-end — BSP

Posted on 05 December 2012 by VRS  |  Email |Print

The Philippines’ foreign exchange reserves are set to reach a new high of $83 billion by the end of 2012, the central bank governor said Tuesday. “[The new gross international reserves forecasts are] $83 billion for this year and $86 billion for next year,” Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. told reporters at the sidelines of a forum on financial education held at the central bank’s headquarters in Manila.
The country’s GIR is currently already at a record high of $82 billion, 6.6 times the country’s total foreign currency-denominated debts and enough to cover nearly a year’s worth of the Philippines’ import requirements, the BSP earlier reported………………………………………Full Article: Source

California looks to sovereign wealth funds for high-speed rail

Posted on 04 December 2012 by VRS  |  Email |Print

The state is courting sovereign wealth funds, pensions and endowments to raise more than $50 billion needed to build the proposed high-speed rail system, Bloomberg reports.
California’s planned bullet train would link San Francisco and Los Angeles at a cost estimated at $68.4 billion. California so far has $10 billion in bonds approved by voters for the project, as well as $3.3 billion committed by the federal government………………………………………..Full Article: Source

UAE tax treaties on the rise

Posted on 04 December 2012 by VRS  |  Email |Print

The number of double taxation treaties signed between the UAE and other countries has surged by more than 40 per cent in the past four years, and tax experts expect the trend to continue. Tax matters are growing in importance for regional sovereign wealth funds that deploy billions of dollars overseas in typically long-term investments that by their nature carry future taxation-related risk.
“As sovereign wealth funds want to expand to other places around the globe they need to have some certainty as to what the tax rules are between the two countries,” said Greg Wiebe, the global head of tax at KPMG………………………………………..Full Article: Source

Nigeria oil savings more than double, risks remain

Posted on 04 December 2012 by VRS  |  Email |Print

Cost-cutting has helped restore Nigeria’s Excess Crude Account (ECA) to some $9 billion in oil savings, or more than double what it was a year ago, Finance Minister Ngozi Okonjo-Iweala said on Monday.
Okonjo-Iweala was addressing delegates in Abuja at the annual Nigerian Economic Summit, whose themes include reducing the high cost of governance in Africa’s top oil producer. Nigeria is Africa’s second biggest economy and its sovereign debt is closely watched by foreign investors, especially since JP Morgan included it in its emerging market index in October………………………………………..Full Article: Source

Olam raises S$1.5 bln with full Temasek backing

Posted on 04 December 2012 by VRS  |  Email |Print

Olam International, under attack from United States-based short seller Muddy Waters over its finances, has found strong backing from key shareholder Temasek Holdings, which will not only subscribe to its portion of a massive US$1.25 billion (S$1.52 billion) capital raising exercise by the Singapore-based commodities giant but will also subscribe to any bond or warrant not taken up by other shareholders.
Put together at the weekend by Olam’s bankers and Temasek, the offer to the commodity firm’s shareholders will see the issue of US$750 million in five-year bonds carrying a coupon of 6.75 per cent a year, stapled with up to US$500 million of warrants………………………………………..Full Article: Source

CIC President appreciates unanimity of approach among stakeholders in Pakistan

Posted on 04 December 2012 by VRS  |  Email |Print

Gao Xiqing, President, China Investment Corporation on Monday appreciated the unanimity he registered among business community, investors, bankers and government functionaries in Pakistan about the needs of their country and the modes to meet the same.
Talking to the delegations of FPCCI and Pakistan China Business Council, he said since there was absolute understanding viz a viz priorities of their country it was easy for his team to make its recommendations about possible investments in identified sectors. “CIC that had for quite some focussed on low risk investments is now contemplating to modify its approach,” said Gao Xiqing………………………………………..Full Article: Source

China Investment Corporation visits Karachi Stock Exchange

Posted on 04 December 2012 by VRS  |  Email |Print

The high powered delegation of the China Investment Corporation (CIC) led by its President, Gao Xiqing, on Monday visited the Karachi Stock Exchange (KSE). On arrival, the delegation was received by the Chairman of the KSE, Muneer Kamal and Managing Director, Nadeem Naqvi.
Gao Xiqing also performed the Gong ceremony that heralds the commencement of the trading session. Later, Muneer Kamal briefed the members of the delegation regarding the KSE………………………………………..Full Article: Source

How will Azerbaijan solve its oil fund deficit?

Posted on 04 December 2012 by VRS  |  Email |Print

Next year, for the first time in its history, the country’s State Oil Fund will post a multi-billion-dollar deficit. For economists, the question is what to do about it. Azerbaijan’s 2013 budget, passed on November 30, is expected to increase by roughly 12 percent to 19.15 billion manats or $24.4 billion.
As it has since 2009, the State Oil Fund (SOFAZ), which oversees investment of the country’s oil revenues, will provide the lion’s share (59.3 percent) of that sum, via a direct transfer of 11.4 billion manats, or $14.5 billion………………………………………..Full Article: Source

Sovereign wealth funds: Money Moves (Video)

Posted on 04 December 2012 by VRS  |  Email |Print

On today’s “Money Moves,” Bloomberg News puts the focus on alternative assets and places where investors are putting their money outside of the traditional stock and bond markets.……………………………………….Full Article: Source

Norway’s other investment strategy: Buy pre-IPO (Video)

Posted on 04 December 2012 by VRS  |  Email |Print

Cristina Alesci reports on the largest sovereign wealth funds under management. She speaks with Deirdre Bolton on Bloomberg Television’s “Money Moves.”.………………………………………Full Article: Source

Norway Wealth Fund to spend $11bln adding U.S. real estate

Posted on 03 December 2012 by VRS  |  Email |Print

Norway’s $660 billion sovereign wealth fund, the world’s largest, plans to invest about $11 billion as it enters the U.S. real estate market. The fund, mandated by the country’s finance ministry to eventually put 5 percent of assets in property, wants one-third of that, or 1.7 percent, to be in the U.S., said Yngve Slyngstad, chief executive officer of Oslo-based Norges Bank Investment Management, which oversees the pool.
The fund held 0.3 percent in real estate, 60.3 percent in stocks and 39.4 percent in bonds as of the end of September, according to its quarterly report………………………………………..Full Article: Source

Sovereign wealth funds: Qatar seals its kingmaker role in Xstrata deal

Posted on 03 December 2012 by VRS  |  Email |Print

Much has been said about the impact on the commodities sector of Glencore’s proposed £56 billion ($89 billion) merger with Xstrata, which at the time of writing appeared to be heading for completion. However, in the long term it might be remembered for a different reason: the role of a Middle East sovereign wealth fund as kingmaker in a deal that has nothing to do with that region.
Qatar’s role – which, ultimately, decided if the deal would go ahead or not – came about because Qatar Holding, the international arm of the Qatar Investment Authority (QIA) sovereign wealth fund, holds a 12% stake in Xstrata. The Anglo-Swiss multinational mining company generally has precious little to do with the Gulf: it is the world’s largest exporter of power-station coal………………………………………..Full Article: Source

Nigeria: SWF and challenges of execution

Posted on 03 December 2012 by VRS  |  Email |Print

About two months ago the Federal Executive Council (FEC), which includes the 36 state governors, approved the establishment of a Sovereign Wealth Fund SWF), but to run concurrently with the Excess Crude Account (ECA) for the time being.
The Fund is expected to provide a firmer legal basis to ring-fence Nigeria’s savings. It has three main aims: saving money for future generations, providing financing for badly needed infrastructure, and starting a stabilisation fund to defend the economy against commodity price shocks………………………………………..Full Article: Source

NEITI’s audit to cover excess crude account

Posted on 03 December 2012 by VRS  |  Email |Print

A new audit to be conducted by the Nigerian Extractive Industry Transparency Initiative will cover the administration and application of excess crude oil accounts, 13 per cent derivation, allocation to states and local governments as well as ecological funds operations, NEITI has said.
A statement issued by Director of Communication at NEITI, Mr. Ogbonnaya Orji, in Abuja on Sunday, said the objective of the national audit was to establish how the funds were distributed and received by the three tiers of government………………………………………..Full Article: Source

CIC urged to create energy investment fund

Posted on 03 December 2012 by VRS  |  Email |Print

It has been suggested to the China Investment Corporation (CIC) to create energy investment fund. The idea was mooted by the Secretary of the Coal and Energy Development Department, Ajaz Ali Khan, while briefing a high powered delegation of the CIC at the Chief Minister House here on Sunday. Chief Minister Sindh, Syed Qaim Ali Shah, and other officials were also present on the occasion.
The seven-member CIC delegation led by its President, Gao Xiqing, had arrived here from Islamabad on two-day visit to the metropolis………………………………………..Full Article: Source

Qaim asks CIC to invest in power projects

Posted on 03 December 2012 by VRS  |  Email |Print

Sindh Chief Minister Syed Qaim Ali Shah on Sunday wooed the China Investment Corporation (CIC) to invest in the projects of coal mining and power generation.He was talking to a high-powered CIC delegation headed by its President Gao Xiqing, which called on him here at the CM House.
The delegation discussed with Shah, Chinese investment in the development of Thar Coal mining and power projects, said a CM House statement.It said that the CIC delegation included Chief Strategy Officer (CSO) Zhou Yuan, President of CIC International (Hong Kong) Fan Kunsheng, Managing Director Cao Yu, Vice-President Lu Jinuoand Director Li Xinxin………………………………………..Full Article: Source

Chinese Investment Corporation may establish Pakistan specific Investment Fund

Posted on 03 December 2012 by VRS  |  Email |Print

Chinese Investment Corporation may establish Pakistan specific “Country Investment Fund,” Gao Xiqing, CIC chief said here Sunday evening during his meetings with bankers, representatives of business community and overseas investors.
He said Chinese Investment Corporation (CIC) has established country specific investment funds with Russia and certain other countries but these were mainly consequent to circumstances.“I am sure we can have one such Pakistan specific fund on the request of the President of Pakistan, Asif Ali Zardari,” said Gao Xiqing………………………………………..Full Article: Source

Temasek talks to advent on Medreich stake sale

Posted on 03 December 2012 by VRS  |  Email |Print

Temasek, the Singapore government-owned sovereign fund, has started discussions with private equity (PE) entities to offload its stake in Bangalore-based Medreich Pharma.
Sources say Temasek is in discussion with US-based Advent International to sell its 25 per cent stake, which it bought for Rs 110 crore in 2005. It is looking for a valuation of Rs 250-300 crore. Rothschild is advising Temasek on the stake sale. Beside discussion with PE companies, Temasek is also considering stake sale in Medreich to a strategic investor………………………………………..Full Article: Source

Sovereign wealth funds taking greater risk

Posted on 03 December 2012 by VRS  |  Email |Print

Sovereign wealth funds have been diversifying their portfolios away from cash and moving into equities and alternative investments, says Institutional Investor, citing the International Monetary Fund’s latest Global Financial Stability Report.
Sovereign funds, like many institutional investors, appear to be moving out on the risk curve in a search for returns in today’s low interest rate environment. Australia’s Future Fund and China Investment Corp. reduced their cash holdings by more than 50 percent between December 2007 and December 2010, and increased allocations to equities, alternatives and bonds.(Slideshow)……………………………………….Full Article: Source

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