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Sovereign Wealth Funds Briefing - Archive | September, 2013

Questions on our sovereign wealth fund

Posted on 24 September 2013 by VRS  |  Email |Print

It was with bemused resignation that we read the reaction of the Peoples Democratic Party to the legitimate questions about the contracting out of Nigeria’s sovereign wealth to foreign firms. Though we were worried that a simple inquiry as to the proprietary of the transaction would evoke such vituperations and foul language from the ruling party, we felt it was vintage PDP.
Even if we are proved wrong eventually, our questions remain legitimate and appropriate. However, the PDP’s acerbic reaction only goes to further convince Nigerians that a party that mouths transparency and accountability but neglects and refuses to answer questions from the people needs to be shown the exit doors………………………………….Full Article: Source

SWF: New PDP Reps back APC

Posted on 24 September 2013 by VRS  |  Email |Print

Members of the new Peoples Democratic Party (PDP) in the House of Representatives are in support of the All Progressives Congress (APC) decision to challenge the appointment of three foreign firms to manage the $200m or 20 percent of the nation’s $1b Sovereign Wealth Fund (SQF).
The lawmakers also said it is the Minister of Petroleum Resources, Diezani Allison-Madueke that should be asked to resign by the Nigeria Governors Forum(NGF) and not the Minister of Finance, Ngozi Okonjo-Iweala………………………………….Full Article: Source

Wealth funds set high prices amid fears of collateral drought

Posted on 23 September 2013 by VRS  |  Email |Print

Sovereign wealth funds will need considerable incentives to fill any gap that occurs in the supply of high-end collateral as a result of tougher derivatives trading regulations.
The Bank for International Settlements predicts global demand for high-quality collateral will hit $4 trillion this year as stricter derivatives trading regulations take hold, sparking widespread concern over shortages…………………………………..Full Article: Source

SWF scope of direct energy-related transactions

Posted on 23 September 2013 by VRS  |  Email |Print

According to the Sovereign Wealth Fund Institute’s transaction database , from the beginning of 2008 till August 2013, over US$ 76.3 billion has been directly invested in energy-related assets and companies. This illustrates the story of a five-year trend of sovereign wealth funds plowing billions into energy- betting heavily on world energy demands. The US$ 76.3 billion includes energy companies, exploration firms, utilities and energy-related infrastructure.
This does not include energy-related technology companies or real estate. In addition, this aggregated transaction amount includes only direct sovereign wealth fund transactions, not fund investments. It is crucial to highlight that sovereign wealth funds are limited partners in some of the world’s highly-desired private equity energy funds…………………………………..Full Article: Source

Scotland: Government ’should create a sovereign wealth fund of assets to attract investors’

Posted on 23 September 2013 by VRS  |  Email |Print

The government’s Royal Mail sell-off represents a missed opportunity to create a sovereign wealth fund of state assets to attract small investors, a leading investment manager has said in Glasgow.
Justin Urquhart-Stewart, the veteran market pundit and co-founder of Seven Investment Management, said: “We are now down to the family teaspoons. Why don’t we learn from the privatisation campaign, it didn’t really work, why not put Royal Mail, the banks, the met offices, the student loan company and Urenco into a sovereign wealth fund of British assets, which the British public could buy into?”………………………………….Full Article: Source

UKIP conference: Party calls for fracking wealth fund

Posted on 23 September 2013 by VRS  |  Email |Print

Profits from shale gas extraction should be put in a state investment fund to ensure they are not squandered, the UK Independence Party has said. Roger Helmer, the party’s energy spokesman, hit out at opponents of so-called “fracking”, dismissing protesters as “eco freaks”.
He told his party conference the UK should focus on “grown-up” sources of energy, such as gas, coal and nuclear. And he dismissed wind power and other renewables as “playground technology”. Mr Helmer, a former Conservative politician who joined UKIP last year, was speaking on the first day of the party’s annual gathering in London…………………………………..Full Article: Source

Norway’s SWF considers oil-free, less liquid future

Posted on 23 September 2013 by VRS  |  Email |Print

Norway may be a country of just 5m people, but its sovereign wealth fund packs a punch every bit as powerful as the region’s infamous fermented herring.
The $760bn Government Pension Fund Global, popularly known as the oil fund, owns 2.5 per cent of Europe’s stock markets and 1 per cent of global market capitalisation, as well as 9 per cent of BlackRock, the world’s biggest fund manager…………………………………..Full Article: Source

To be, or not to be? – Norway’s regional involvement

Posted on 23 September 2013 by VRS  |  Email |Print

Norway, home to roughly 5 million people, is often thought to be isolated from the European Union. As a colleague said to me as I sat reading about the recent Norwegian elections, “Why bother? Norway will never join the EU, with their oil they don’t need to bother with the rest of us.” This casual remark, while bearing no ill will, is disappointing. For, in truth, the Kingdom of Norway is quite involved.
The Government Pension Fund Global, known as simply the Oil Fund is most likely, at a current value of 760 billion US dollars, the largest sovereign wealth fund in existence. Estimated to grow to over 1.1 trillion US dollars by 2020, the fund owns approximately 1% of world’s stocks, and 2.5 % of European publicly listed companies. The Norwegian Finance Ministry are the owners, while it is run by the Central Bank…………………………………..Full Article: Source

Nigeria: Sovereign wealth fund is to shield economy – CBN

Posted on 23 September 2013 by VRS  |  Email |Print

Sanusi Lamido Sanusi, governor, Central Bank of Nigeria (CBN), says the Federal Government established the Sovereign Wealth Fund (SWF) to shield Nigerian economy from adverse global shocks. Sanusi, who made the remark at the Euromoney Conference in Lagos on Thursday, said that the fund would shield the economy in the event of total crash of global oil price.
The News Agency of Nigeria (NAN) reports that the fund is about one billion dollars (more than N150 billion). The fund is being invested overseas in real and financial assets such as stocks, bonds, real estate, precious metals, among others…………………………………..Full Article: Source

Nigeria: PDP berates Apc lawmakers over comments on SWF

Posted on 23 September 2013 by VRS  |  Email |Print

The Peoples Democratic Party, PDP, has described the position of the opposition All Progressives Congress, APC, lawmakers on the management of the Sovereign Wealth Fund, SWF, as a demonstration of crass ignorance and the obvious unpreparedness of the APC to manage the affairs of the nation.
The PDP National Publicity Secretary, Olisa Metuh, in a statement on Thursday, branded the APC lawmakers as frustrated political adventurers with a penchant for destructive criticisms that exhibit their emptiness and poor understanding of international financial system…………………………………..Full Article: Source

Don’t invest SWF in aviation sector

Posted on 23 September 2013 by VRS  |  Email |Print

The managing director of the Nigerian Sovereign Investment Authority (NSIA), Mr Uche Orji , last week, stated that the authority was looking at investing in insurance, securities, health and aviation sectors of our economy. While the insurance, securities and health sectors could sound as good investment judgment, aviation sector is obviously a wrong choice.
I find it strange that Mr Orji who should have economics or accounting background would nurse a possible idea of sinking public funds in a sector that is known to swallow without regurgitation. Is Mr Orji aware that the Aviation Intervention Fund of N300 billion, earmarked and disbursed under the late President Yar’Adua has, all of a sudden, disappeared into thin air? The various airlines, including Air Nigeria that accessed the funds, have either vanished from the sector or are still on life support— with no possibility of recovering…………………………………..Full Article: Source

Jonathan inaugurates SWF Council, calls for accountability

Posted on 23 September 2013 by VRS  |  Email |Print

President Goodluck Jonathan has urged the Nigeria Sovereign Investment Authority to ensure accountability and gain the trust of all stakeholders in the management of the Sovereign Wealth Fund. Jonathan, who was represented by Vice-President Namadi Sambo, made the call in Abuja on Thursday at the inauguration of the Sovereign Wealth Fund Council.
The President is the chairman of the council. Other members are the 36 state governors, the Minister of the Federal Capital Territory and the Attorney-General of the Federation and Minister of Justice…………………………………..Full Article: Source

AfDB estimates FG infrastructure gap to gulp $350bln

Posted on 23 September 2013 by VRS  |  Email |Print

Implementing the Federal Government’s Infrastructure Action Plan (IAP) would require at least some $350 billion within ten years to accomplish, the African Development Bank (AfDB) has estimated. AfDB expects this infrastructure funding would come from government, private sector, sovereign wealth fund, state enterprises, donor organisations, households, among others.
“Full implementation of the proposed IAP would require $350 billion of development expenditure between 2011 and 2020. At $350 billion, the development cost of the IAP is larger than any previously published estimate for overcoming the infrastructure gap in Nigeria…………………………………..Full Article: Source

Kuwaiti fund pins hopes on Hong Kong

Posted on 23 September 2013 by VRS  |  Email |Print

Asiya Investments, a fund manager in which the Kuwait Investment Authority (KIA) holds a 15 per cent stake, is looking to use its new Hong Kong office to bring in investors and advise Asian companies seeking to expand in the Middle East.
Asiya - Asia in Arabic - currently operates US$450 million in assets in three funds. It plans to leverage its strong ties in China, South Korea and India with the assistance of its largest shareholder, KIA, which originally founded Kuwait China Investment Co (KCIC) as its investment vehicle in 2005 with US$280 million of permanent capital…………………………………..Full Article: Source

The U.S.A. SWF revisited

Posted on 23 September 2013 by VRS  |  Email |Print

New research from Michael Elsby, Bart Hobijn, and Aysegul Sahin on the role of trade in reducing the labor share of income is attracting a lot of attention, e.g., from Matt Yglesias: One thing that they find is that the headline decline in this indicator is actually a bit overstated due to technical issues with the treatment of self-employment income. About a third of the total decline, they think, can be attributed to miscalculation.
The blockbuster finding, however, is that the remainder is very heavily concentrated in industries that are newly composed to import competition. In other words, the labor share of national income has fallen because many more industries are exposed to foreign competition in a way that’s systematically advantaged the owners of capital…………………………………..Full Article: Source

An idea whose time has come: India needs a sovereign wealth fund

Posted on 23 September 2013 by VRS  |  Email |Print

The government is reportedly setting up a sovereign wealth fund to garner natural resources abroad. The move makes perfect sense, as it would allow sourcing the commodities at cost price rather than the going, often steep, market rates.
Which is why, the idea of a ready corpus to acquire stakes in hydrocarbon and fertiliser-feedstock assets overseas can no longer be set aside, given our energy constraints and the lack of domestic resources for plant nutrients. It pays to be forward looking…………………………………..Full Article: Source

East Timor hungry for investors

Posted on 23 September 2013 by VRS  |  Email |Print

A Southeast Asian country quite off the radar of the international community is East Timor. On Aug 14, 2013 it announced that its sovereign wealth fund – the Timor-Leste Petroleum Fund – had reached a value of US$13.6 billion (RM40.8 bil) surpassing the oil fund’s value of both Bahrain and Oman.
This is an amazing amount for an almost forgotten country of just 1.2 million people where around 40% still live below the poverty line of US$1.25 (RM3.75) a day. The fund alone could, straight away, grant every citizen more than US$11,300 (RM33,900) as a one-time payment from the oil wealth…………………………………..Full Article: Source

Khazanah rallies for Westports Holdings Bhd IPO

Posted on 23 September 2013 by VRS  |  Email |Print

Westports Holdings Bhd could be the biggest initial public offering in Malaysia this year – targeting US$ 700 million. The deal was initiated years ago by Malaysian sovereign wealth fund, Khazanah Nasional, which aims to move state-linked companies toward stock market capitalization.
The sovereign wealth fund owns a 7.52% stake through Lankayan Ventures Sdn Berhad, a holding subsidiary. The Malaysian port operator is in charge of one of Asia’s busiest shipping terminals at Port Klang………………………………….Full Article: Source

Macquarie sees record global fund flows into Australian property

Posted on 23 September 2013 by VRS  |  Email |Print

Macquarie Group Ltd. (MQG), Australia’s biggest investment bank, is seeing record global investor purchases of Australian commercial property, which is offering relatively high yields and secure cash flows.
“Large pension and sovereign wealth funds have very large, growing amounts of money and they’re looking to allocate a significant portion to real estate,” Chris Green, global head of real estate at Macquarie, said………………………………….Full Article: Source

Sovereign wealth funds: In the shadows of the shadows

Posted on 20 September 2013 by VRS  |  Email |Print

For many years, the global fund manager has had four names on the must-see list when he visits the Gulf: the Abu Dhabi Investment Authority, the Kuwait Investment Authority, the Saudi Arabian Monetary Agency and, more recently, and with an increasing sense of futility, the Qatar Investment Authority. But lately, a second tier of state-backed institutional wealth has started to emerge.
These entities are not necessarily any easier to pitch for mandates, but at least it makes for a little variety. This trend has been under way for years in Abu Dhabi, which has long bewildered the outsider trying to understand the delineation between its many sovereign entities………………………………………..Full Article: Source

Nigeria’s sovereign wealth fund launches on an unfortunate day to be long US debt

Posted on 20 September 2013 by VRS  |  Email |Print

Nigeria just started a national savings account, but the timing could have been better—it plowed $200 million into US debt, just as the Federal Reserve pulled the carpet out from underneath the oil-rich nation’s investment strategy.
That’s not to say it will end badly. Nigeria is smartly following in the foot-steps of other countries whose economies are dependent on non-renewable natural resources, creating a $1 billion fund to invest in development and save for a rainy day. The plan is to save $1 billion a year, with roughly a third invested in local infrastructure, another third aimed to preserve funding for future generations, and $200 million in US debt to provide a cushion against financial instability. (The remaining 15% remains unallocated)………………………………………..Full Article: Source

Sovereign wealth fund raises hope for second Niger Bridge, aviation, others

Posted on 20 September 2013 by VRS  |  Email |Print

With the inauguration Thursday of the Council and Board of the Nigerian Sovereign Investment Authority (NSIA), the provision of such critical infrastructure as the second Niger Bridge, Gurara Dam Phase 2, seaports and aircraft leasing company, would only be a matter of time.
At their inauguration in Abuja, President Goodluck Jonathan challenged Nigerians to imbibe the culture of saving for the diversification of the nation’s economy. The occasion also witnessed the presentation of share certificates of contributions to the Sovereign Wealth Fund (SWF) to the 36 state governors, most of who were represented by their deputies. Also, certificates were issued to federal and local council officials……………………………………….Full Article: Source

Sovereign wealth fund to redistribute oil wealth

Posted on 20 September 2013 by VRS  |  Email |Print

Mallam Sanusi Lamido Sanusi, Governor, Central Bank of Nigeria (CBN), says the Federal Government established the Sovereign Wealth Fund (SWF) to shield Nigerian economy from adverse global shocks.
Sanusi, who made the remark at the Euromoney Conference in Lagos on Thursday, said that the fund would shield the economy in the event of total crash of global oil price. The fund is about one billion dollars (more than N150 billion). ……………………………………….Full Article: Source

PDP berates APC lawmakers over comments on sovereign wealth fund

Posted on 20 September 2013 by VRS  |  Email |Print

The Peoples Democratic Party, PDP, has described the position of the opposition All Progressives Congress, APC, lawmakers on the management of the Sovereign Wealth Fund, SWF, as a demonstration of crass ignorance and the obvious unpreparedness of the APC to manage the affairs of the nation.
The PDP National Publicity Secretary, Olisa Metuh, in a statement on Thursday, branded the APC lawmakers as frustrated political adventurers with a penchant for destructive criticisms that exhibit their emptiness and poor understanding of international financial system. Contrary to insinuations that the SWF has been mortgaged to foreign interests, the PDP said, the fund is managed in line with international best practices that guarantee prudence, foreign participation and return on investment………………………………………..Full Article: Source

Jim Armitage: RBS looks set to spoil Osborne’s claim that he has fixed banking mess

Posted on 20 September 2013 by VRS  |  Email |Print

Temasek is clearly a beast with some appetite for the UK. Little surprise, then, that the Singapore sovereign wealth fund has become George Osborne’s best new buddy. Not only did it take up the biggest slice of Lloyds’ placing this week, but it appears the Treasury/UK Financial Investments has high hopes it will take a bigger bite with the next round of the sales process, probably next March.
This all plays well for the Chancellor, who can boast to the public that one of the world’s biggest sovereign wealth funds is putting billions of pounds in long-term bets on the future of the British economy (hence the Treasury leaks about Temasek snapping up about 0.5 per cent of Lloyds in this week’s placing.)……………………………………….Full Article: Source

Qatar’s fund plans to start works at Chelsea Barracks

Posted on 19 September 2013 by VRS  |  Email |Print

Qatar’s sovereign-wealth fund will begin clearing a luxury-homes site at Chelsea Barracks in November, more than five years after buying the London property. Qatari Diar Real Estate Investment Co.’s Project Blue (Guernsey) affiliate will demolish towers and a warehouse and drive piles into the ground on the edge of the site, according to a letter sent to local residents obtained by Bloomberg News.
The Chelsea Barracks Partnership, which liaises with local residents, said in the letter dated Sept. 9 that the work would start in early November………………………………………..Full Article: Source

Adia delegation explores investment opportunities in Russia

Posted on 19 September 2013 by VRS  |  Email |Print

A delegation from the Abu Dhabi Investment Authority (Adia) met officials, ministers, bankers and senior executives in Moscow this week to explore investment opportunities in Russia, Adia said.
“As a prudent, long-term investor, Adia believes in building deep and lasting relationships of trust with key stakeholders in major financial markets. We were grateful for the opportunity to have frank and open discussions with such an esteemed group of senior officials and corporate leaders during our visit to Russia this week, with the goal of better understanding the long-term opportunities and challenges of investing in Russia,” said Sheikh Hamed bin Zayed Al Nahyan, the managing director of Adia………………………………………..Full Article: Source

Nigeria: SWF investments begin June, says NSIA

Posted on 19 September 2013 by VRS  |  Email |Print

Authorities at the Nigerian Sovereign Investment Authority (NSIA) on Monday announced that they would in June, begin investment of the stabilisation and future generation components of the nation’s $1billion Sovereign Wealth Fund (SWF), seven months after the body was inaugurated.
But investments of the infrastructure component would begin towards the end of the year and at the moment, a very detailed and thorough review of the possible investment areas and projects is on- going, Uche Orji, Managing Director/ Chief Executive Officer , NSIA told a press conference in Abuja………………………………………..Full Article: Source

APC Reps question management of $200mln sovereign funds by foreigners

Posted on 19 September 2013 by VRS  |  Email |Print

The All Progressives Congress (APC) lawmakers in the House of Representatives said Federal Government’s farming out the management of $200 million Sovereign Wealth Fund (SWF) to foreign firms contravenes Section 1, Part 1 of the Fifth Schedule of the 1999 Constitution.
The Federal Government, on August 28, appointed Credit Suisse and Goldman and Sach and UBS to manage the $200 million, or 20 per cent of the country’s $1 billion SWF. The progressives’ lawmakers have vowed to challenge the legality of the action………………………………………..Full Article: Source

Azerbaijani State Oil Fund’s assets increase by 42.5 times for last 10 years

Posted on 19 September 2013 by VRS  |  Email |Print

The assets of the State Oil Fund of Azerbaijan (SOFAZ) from 2003 to 2013 increased by 42.5 times, SOFAZ told Trend on Tuesday. At present, the amount of SOFAZ’s assets hits $34.68 billion. For comparison, SOFAZ’s assets hit $0.82 billion in 2003.
The biggest growth was registered in 2008. SOFAZ’s assets increased by 4.53 times (or by $8.74 billion) and hit $11.22 billion as of late 2008. For comparison, as of 2007 SOFAZ’s assets hit $2.48 billion. SOFAZ was established in 1999, and its assets at that time amounted to $271 million. SOFAZ’s assets reached $34.129.4 billion as of 2012………………………………………..Full Article: Source

Norway’s sovereign fund increases tech stock holdings

Posted on 19 September 2013 by VRS  |  Email |Print

In a pair of recent SEC filings, Norges Bank Investment Management (NBIM), the institutional investor in charge of Norway’s sovereign wealth fund, has significantly increased ownership in two technology companies: Itron Inc. and GT Advanced Technologies Inc.
According to an amended 13G filing made on September 12th, 2013, Norges Bank upped its stake in Itron Inc. to 1,956,728 shares, representing a nearly one million share increase according to a second quarter filing. The aggregate value of the shares totaled US$ 37,683,000 in June of 2013 and nearly US$ 76,980,000 on the date of the purchase on September 11th, 2013……………………………………….Full Article: Source

Norway wealth fund eyes Indian core sector

Posted on 19 September 2013 by VRS  |  Email |Print

In a move that could significantly boost investor confidence, several sovereign wealth funds (SWFs) from Japan, UAE, Norway and Canada among others have rekindled their interest in investing in India’s cash starved infrastructure sector, which needs 1 trillion worth of funds in the next four-five years.
“The government is in talks with a few SWFs and they have shown a keen interest to invest in the country and we are hopeful that things would materialise soon,” a government official said on the condition of anonymity. Though the recent volatility and a depreciating rupee have reduced the attractiveness of the stock market for SWFs, renewed interest of these funds are likely to reverse the trend………………………………………..Full Article: Source

Bank of America to Wells Fargo target Mideast SWFs

Posted on 19 September 2013 by VRS  |  Email |Print

Bank of America Corp and Wells Fargo & Co are among US lenders targeting sovereign wealth funds and family-owned businesses to expand in the Middle East.
Bank of America, the second-largest US lender by assets, is boosting financing to family-run companies and expects to increase capital raising and transaction banking in the region, according to Fernando Vicario, co-head of debt capital markets and corporate banking for Europe, Middle East and Africa………………………………………..Full Article: Source

2013’s Alaska Permanent Fund dividend check: $900

Posted on 19 September 2013 by VRS  |  Email |Print

The number on every Alaskan’s mind was announced Wednesday morning by acting Revenue Commissioner Angela Rodell, in Anchorage. This year’s Alaska Permanent Fund dividend (PFD) payout is $900. The dividend will be distributed to eligible Alaska residents beginning Oct. 3.
Altogether, there were 670,865 Alaska PFD applicants this year, and about 640,436 should qualify, Rodell said. The oldest applicant was 108 years old, and the youngest was born at 11:59 p.m. on the qualification deadline of Dec. 31, 2012………………………………………..Full Article: Source

India to set up company for overseas investments, not a conventional SWF

Posted on 18 September 2013 by VRS  |  Email |Print

In contrast to the conventional sovereign wealth fund (SWF) traditionally floated by rich economies, India is looking at floating a new company — the India Overseas Investment Corp Ltd (INOIC) — that will invest in the ownership of natural resources assets overseas to create long-term resource security without drawing on the forex reserves that will continue to be managed by the Reserve Bank of India.
“INOIC will not be India’s SWF in the conventional sense but will be a development finance institution with the specific mandate to provide equity and debt to Indian public sector enterprises (PSEs) for securing natural resources abroad,” said a senior government official associated with the process………………………………………..Full Article: Source

Pulok’s sovereign fund sans funds!

Posted on 18 September 2013 by VRS  |  Email |Print

There are reports that the Prime Minister’s office (PMO) is driving the setting up of a company — India Overseas Investment Corporation (INOIC) — under the finance ministry on the lines of a sovereign wealth funds elsewhere in the world.
The idea, no doubt, is to discover some financial muscle for access to overseas natural resources.If we’re happy with a cut-copy-paste “me-too” of what Norway, Russia, China, South Korea, Singapore, Malaysia, Brunei, Qatar and UAE have done to push overseas acquisitions and business through such funds., the concept note quoted. The note, in fact, is to the credit of PM’s principal secretary Pulok Chatterjee for emphasising the need to secure access to raw materials, “wherever they were available” and commissioning a blueprint of an overarching institutional mechanism for such investments………………………………………..Full Article: Source

An idea whose time has come: India needs a sovereign wealth fund

Posted on 18 September 2013 by VRS  |  Email |Print

The government is reportedly setting up a sovereign wealth fund to garner natural resources abroad. The move makes perfect sense, as it would allow sourcing the commodities at cost price rather than the going, often steep, market rates.
Which is why, the idea of a ready corpus to acquire stakes in hydrocarbon and fertiliser-feedstock assets overseas can no longer be set aside, given our energy constraints and the lack of domestic resources for plant nutrients. It pays to be forward looking………………………………………..Full Article: Source

Philippines: Gov’t considers own sovereign wealth fund

Posted on 18 September 2013 by VRS  |  Email |Print

The government may put up its own sovereign wealth fund as a vehicle for investing in the private sector overseas as part of efforts to put the country’s foreign exchange income to better use. Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. said there was enough foreign exchange liquidity locally to put up a sovereign fund.
“It’s a concept that can be pursued. Sovereign wealth funds can invest in different asset classes and even (government) projects abroad,” Tetangcosaid………………………………………..Full Article: Source

Norway’s sovereign wealth fund raises HFT concerns

Posted on 18 September 2013 by VRS  |  Email |Print

High frequency traders, who use computers to trade markets in milliseconds, are a favourite target for grumbles from big, long-term investors like pension funds. So the verdict of Norway’s giant government pension fund on what HFTs do to markets makes intriguing reading.
The $770 billion fund, financed by the Nordic nation’s oil wealth, is one of the world’s biggest single investors of any kind. By its own estimates, it owns about 1.3% of the global equity market………………………………………..Full Article: Source

Norway’s pension fund on impact of HFT

Posted on 18 September 2013 by VRS  |  Email |Print

High frequency trading is becoming a controversial topic as exchange glitches and market mishaps become more and more frequent, as such it is worth paying attention when Norway’s nearly $800 billion sovereign wealth fund discusses the pros and cons of the issue.
Norges Bank Investment Management, the division responsible for overseeing the pension fund, recently released a paper detailing how a large, long-term investor such as itself is affected by the evolution of markets and the rise of high frequency trading………………………………………..Full Article: Source

Fortum’s energy asset sale catches sovereign wealth interest

Posted on 18 September 2013 by VRS  |  Email |Print

Sovereign wealth funds, infrastructure funds and public pensions have been investors of power grids and other energy infrastructure assets in Europe. As of July 31, 2013, the Finnish State controls 50.8% of Finnish utility Fortum. Fortum is publicly traded on the Helsinki Stock Exchange.
The power generation and electricity distribution are highly fragmented in the Nordic power market. Good for energy consumers, this eats at the profit margins of many utilities. In addition, several European energy providers are seeking to offload networks and shed debt. This cleansing of the balance sheet allows utilities to focus on power generation and renewable energy………………………………………..Full Article: Source

Libya protests, no raiding sovereign wealth fund

Posted on 18 September 2013 by VRS  |  Email |Print

Libyan Central Bank Governor Saddek Omar Ali Elkaber said that he would not be using any of the cash or assets held by Libya’s US$ 65 billion sovereign wealth fund to offset a plunge in oil production in recent months.
Governor Elkaber characterized the idea of fund raiding as “wrong” saying that internal struggles (like protests) should not be a reason to dip into the country’s large reserves. He indicated that a drop in global oil prices might be a stronger reason to do so. However, he made it clear that Libya is a long-term institutional investor, and that they would not be liquidating assets anytime soon………………………………………..Full Article: Source

Nigeria sovereign wealth fund invests $200mln in US bonds

Posted on 18 September 2013 by VRS  |  Email |Print

The Nigerian Sovereign Wealth Fund (SWF) has invested $200 million, via its management partners, in the US bond market. The $200 million is the 20 percent stabilization fund set aside from the $1 billion wealth fund, to be used for foreign financial market investment. This led to the appointed UBS, Credit Suisse and Goldman Sachs as managers of the fund.
According to the chief executive of the Nigerian Sovereign Investment Authority, Uche Orji, $50 million of the fund was allocated to UBS last week for asset acquisitions in the US Treasuries, while the $150 million left will be handed over to Credit Suisse and Goldman Sachs this week for the development of a US bond portfolio………………………………………..Full Article: Source

Permanent Fund dividend announcement coming wednesday

Posted on 18 September 2013 by VRS  |  Email |Print

Eligible Alaskans will find out how much they’ll receive from their Permanent Fund Dividend in a Wednesday announcement scheduled to take place at 11 a.m. The announcement will be made by acting Revenue Commissioner Angela Rodell at the Atwood Building in downtown Anchorage.
The disbursement reflects investment profits from the state’s oil-wealth savings account. It is based on the amount of investment earnings allocated to dividends based on a five-year rolling average of the Permanent Fund’s performance……………………………………….Full Article: Source

India govt plans sovereign wealth fund

Posted on 17 September 2013 by VRS  |  Email |Print

The government is setting up a company — India Overseas Investment Corporation (INOIC) — under the finance ministry on the lines of a sovereign wealth fund to lend financial muscle for securing access to overseas natural resources.
A concept note prepared by the ministry goes beyond the conventional reasons of acquiring energy assets to justify the need for INOIC. “Other key areas such as food security (also ) requires access to fertilizers to augment food stocks as well as to enhance farm productivity,” the note said. With INOIC, India will join a select group of economies such as US, Russia, China, South Korea, Singapore, Malaysia, Brunei, Qatar and UAE that have pushed overseas acquisitions and business through such funds………………………………………..Full Article: Source

Nigeria puts $200mln SWF cash in investment

Posted on 17 September 2013 by VRS  |  Email |Print

Nigeria’s Sovereign Wealth Fund (SWF) has made its first investment, handing over $200m to UBS, Credit Suisse and Goldman Sachs to manage a fixed income portfolio. The first investment, even if relatively small, adds Nigeria to the small cadre of commodity-rich countries that over the past decade have become one of the most powerful forces in global financial markets through their sovereign wealth funds, according to a report by the Financial Times.
Uche Orji, chief executive of the $1bn Nigerian Sovereign Investment Authority (NSIA), told the Financial Times the fund gave UBS $50m last week to invest in United States (US) Treasuries. A further $150m is being transferred this week to Credit Suisse and Goldman Sachs to build a US corporate bond portfolio………………………………………..Full Article: Source

Nigeria: Governors meet to discuss sovereign wealth fund

Posted on 17 September 2013 by VRS  |  Email |Print

The Sovereign Wealth Fund, oil theft and continued deductions from excess crude account are expected to dominate discussions at the summit of the governors from the 36 states of the federation, holding on Tuesday.
According to unconfirmed reports, the meeting will be holding at the Rivers State Governor’ Lodge in Abuja. According to the Director General of the Nigeria Governors’ Forum, Bayo Okuaro, who confirmed the meeting, said that all the 36 state governors have been invited to the meeting that is expected to hold Tuesday with the following agenda - Fresh & subsisting litigations; update on Federation Allocation Accounts Committee, Excess Crude Account and the Sovereign Wealth Fund………………………………………..Full Article: Source

Real sector on the upbeat as reform pace accelerates

Posted on 17 September 2013 by VRS  |  Email |Print

The Nigerian economy, hobbled for years by state inefficiency, is beginning to connect with the real sector as the pace of reforms in diverse areas accelerates. Reforms in agriculture, banking and power and the establishment of a sovereign wealth fund (SWF) are beginning to impact the real economy.
Nigeria’s Sovereign Wealth Fund, with seed capital of $1 billion, has also begun to impact the real economy with plans to invest in infrastructure. The board of the SWF has decided on the first infrastructure investment, according to Finance Minister Ngozi-Okonjo Iweala………………………………………..Full Article: Source

Libya: Opposes use of sovereign wealth fund for budgetary needs

Posted on 17 September 2013 by VRS  |  Email |Print

Libya’s economy could grow just 5 percent instead of around 18 percent predicted by the IMF this year if the country cannot end protests that have all but halted its oil exports, its central bank governor told Reuters.
Governor Saddek Omar Ali Elkaber said he opposed suggestions by some decision makers and politicians that the government could draw on Libya’s foreign exchange reserves or cash deposits in its $60 billion sovereign wealth fund………………………………………..Full Article: Source

Investment rises with Arab countries

Posted on 17 September 2013 by VRS  |  Email |Print

China and Arab countries should step up “two-way” investment and create a sound environment for multilateral economic cooperation to capitalize on the high-return industries of services, finance and environmental improvement, said senior officials of Arab nations.
The changing global economic map and the lingering debt crisis in the eurozone have caused big losses for government-backed Gulf financial institutions and their sovereign wealth funds in developed markets such as the United States, the United Kingdom, France and Germany in recent years………………………………………..Full Article: Source

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