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Sovereign Wealth Funds Briefing 23.Sep 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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