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Sovereign Wealth Funds Briefing 14.Oct 2008

Posted on 14 October 2008 by VRS |  Email |Print

From Nytimes.com: Don’t expect Middle Eastern sovereign wealth funds to jump on the bailout bandwagon. Given the recent volatility in the stock markets, some large sovereign wealth funds have been hoarding cash, much like the hedge funds and institutional investment funds that have been running for cover.

The oil-rich emirate of Abu Dhabi oversees the world’s largest government-sponsored fund, for example, and has been steadily adding to its cash position, which is at its highest in years. According to people who have been briefed on its investment strategy, 10 to 20 percent of $550 billion controlled by the Abu Dhabi Investment Authority is now in cash….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Rttnews.com: Deputy Secretary Robert Kimmitt spoke about the importance of Sovereign Wealth Funds Monday. Kimmitt called the global financial crisis “an historic reassessment of risk in the world’s financial markets.”

He said, “The United States and other countries are taking steps to provide much needed liquidity to the financial system; strengthen financial institutions; protect investors; and enhance market stability.”…. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Bloomberg: Qatar Investment Authority, the country’s $60 billion sovereign wealth fund, will contribute as much as 20 percent to the capital of local banks traded on its stock exchange as Persian Gulf countries try to protect themselves from the global credit crisis.

Qatari banks traded on the Doha bourse are in a sound position and there is no justification for the drop in their share prices, the Qatari state news agency cited Prime Minister Sheik Hamad bin Jassim bin Jaber Al Thani as saying after meeting with the local banks yesterday. The sovereign fund has agreed to contribute 10 percent to 20 percent of banks’ capital to guarantee financing for development projects, he said…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Adn.com: The world financial crisis is hitting Alaska with a one-two punch, as the Permanent Fund has shriveled in value by one-quarter — falling $10 billion in all — and oil prices plunge amid fears of a global recession.

But state officials aren’t particularly nervous. Legislators say the price of oil is still comfortably above the state’s break-even point. And Permanent Fund managers say they plan to ride out the market swing without changing course on their investments….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Chinapost.com.tw: Sovereign wealth funds, the state investment vehicles that are flourishing during a boom in commodities prices, could play a role in the current financial crisis, World Bank chief economist Justin Lin said.

“They have the capital and now we have the situation,” said Lin, a Peking University professor who took up the bank post in June. “Certainly the sovereign wealth funds can play some function,” he said….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Thecitizen.co.tz: The International Monetary Fund (IMF) has said the Tanzanian government’s plans to borrow money from international capital markets in the current global financial turmoil could cost the economy billions of shillings in interest payments annually.

A senior IMF official told The Citizen here that the intention to issue a sovereign bond to raise money to finance infrastructure projects was risky and could be detrimental to the country’s fiscal position…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Thisismoney.co.uk: As Barclays turned down taxpayer money and sought foreign investment, the extent emerged of the losses made by sovereign wealth funds betting on Western banks.

Investors from China and Singapore to Abu Dhabi and Qatar have lost $38.83bn (£22.59bn) buying into banks since the start of the credit crunch last summer. The Qatar Investment Authority has already ploughed $4.52bn into Barclays, taking a 7.99% stake that has lost $1.74bn in value as the bank’s shares tumbled. Qatar has also suffered losses investing in the London Stock Exchange. …. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Telegraph.co.uk: HSBC has reiterated it has “no plans” to take capital from the Government as shares in the bank rose 7.5pc following the announcement that £37bn would be pumped into rival banks Royal Bank of Scotland, HBOS and Lloyds TSB.

The bank, which was part of the bail-out package announced last week, revealed then that it would inject £750m of equity into its UK subsidiary from its “own resources” – meaning it met the Government’s required levels of tier one capital, the safest form, without having to sacrifice any stake in the company…… Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From 247wallst.com: Many of the world’s largest sovereign funds believe that they were taken to the cleaners earlier this year when they dumped billions of dollars into large US financial companies like Citigroup (C) and Merrill Lynch (MER). They got to watch the value of their investments drop 50% or more as the credit crisis got worse.

After all of that, it was fair to assume that countries from China to Singapore to Abu Dhabi would not be sending analysts to the America to kick the tires of banks with plans to put in more money in, good dough after bad…. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From News.com.au: East Timor, one of the world’s poorest nations, has outsmarted the economic giants in the global financial meltdown. As investment banks collapsed and share markets were hammered, the fledgling nation’s wealth - about $US3 billion-plus ($A4.45 billion), mostly from oil and gas - was tucked safely away in US Treasury bonds.

Although the oil price has slumped, the country is still earning more than $A100 million a month in oil revenue and its sovereign wealth fund, dubbed the Petroleum Fund, is on track to hit $US4 billion by the end of 2008….. Full Article: Source

Posted on 14 October 2008 by VRS |  Email |Print

From Bloomberg: Dubai may need help from Abu Dhabi and the United Arab Emirates government to finance a surge in borrowing that paid for the world’s tallest tower, palm tree- shaped man-made islands and stakes in banks worldwide.

Dubai’s “potential reliance” will be “most significant” in coming years, Moody’s Investors Service said in a report today. Government-controlled companies owe at least $47 billion, more than Dubai’s gross domestic product, and they will continue to accumulate debt at a faster pace than the economy grows, the New York-based rating firm said….. Full Article: Source

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