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Sovereign Wealth Funds Briefing 11.Aug 2014

Posted on 11 August 2014 by VRS |  Email |Print

Central bank could manage new sovereign wealth fund as Macao authorities seek higher return on booming reserves; IMF encourages idea in staff report. The Macao authorities are “willing to contemplate” establishing a sovereign wealth fund (SWF) according to the International Monetary Fund (IMF), as they chase a higher return on their reserves.
Macao overtook Las Vegas as the largest gaming centre in the world in 2005, and started rapidly accumulating foreign exchange reserves as a result. A decade-long gaming boom pushed reserves to $30 billion in January 2014 – nearly 60% of GDP - and, according to the IMF, the authorities are now considering handing some of the pot to a new SWF…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

The world’s big government owned investors went on a spending spree in the first half of the year, with the total value of transactions by sovereign wealth funds (SWFs) nearly back at levels recorded in late 2008, just before the global economic crisis hit in earnest.
According to research by the Sovereign Wealth Fund Institute, a US-based think tank, direct deals and transactions by SWFs reached $50.02bn in the first six months of the year, up 23 per cent on the same period in 2013. The record level previously recorded by the SWFI was $51.05bn for the first six months of 2008. The institute points out, however, that the first half 2008 figure included some of the early measures taken by governments to mitigate the effects of the credit crunch through state spending…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

EY explained in a recent report on the anticipated implications of Scottish independence for the oil and gas industry that a central theme in the debate has been the proposal from the ‘Yes’ campaign that if Scotland become independent then it should follow the approach of oil-rich countries in setting up a Sovereign Wealth Fund.
The fund would aim to enable the country to spend the wealth generated by oil and gas across the generations so that the beneficial impact is transformational to the economy in many decades time. However, its opponents insist that its creation could require tax increases and/or cuts to public expenditure…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

The sovereign wealth fund of Norway will begin to reveal how it intends to vote ahead of companies’ annual general meetings (AGM) from next year, in a move to improve transparency. The $860 billion (£515bn) pension fund is one of the world’s largest investors and its decision could represent a significant shift in shareholder activities.
The move by the fund, which is managed by the Norges Bank Investment Management (NBIM), is chiefly an effort to improve transparency. The fund has said it also aims to expand its involvement in some of the companies it invests in, including engaging on environmental, social and governance (ESG) issues…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

China Investment Corp., the country’s sovereign wealth fund, reported a 9.3% return on its overseas investments in 2013, a decline from 10.6% in 2012. CIC said its net profit rose 11.8% to $86.9 billion in 2013, up from $77.7 billion a year earlier. It has recorded a 5.7% annualized return on its overseas investments since it was founded in 2007, the fund said in its annual financial report, which was released Friday.
Chairman and CEO Ding Xuedong said in the report that the firm had realized good returns by exiting more than 10 investments last year as global markets were on the rise. He didn’t give details on those investments…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

China Investment Corp., the nation’s $653 billion sovereign wealth fund, said return on its overseas investments fell last year as volatility in global financial markets eroded the value of its portfolio and prompted the company to cut bond holdings.
The return dropped to 9.33 percent from 10.6 percent in 2012, according to the Beijing-based company’s 2013 annual report released yesterday. Net income at the fund, which also holds government stakes in China’s biggest banks, rose 12 percent to $86.9 billion, the report showed…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

China’s sovereign wealth fund increased its allocation to external managers last year and made a move into developed market equities, but expressed concern over the outlook for deal-sourcing.External firms managed $71.4 billion more of China Investment Corporation’s (CIC) assets at the end of 2013 than at the end of 2012 as it raised its allocations to 67.2%, from 63.8%, over the period.
The news follows reports last week which found that Asian institutional investors will likely increase outsourcing over the next three years following a recent decline in the use of external managers…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

Malaysia’s government will carry out a “complete overhaul” of its troubled national airline in an attempt to revive the loss-making company after it was hit by two devastating jetliner disasters this year.
State investment fund Khazanah Nasional’s proposed 1.4 billion ringgit ($436 million) buy-out of the shares it does not own paves the way for it to take steps such as cutting back on less-profitable routes, trimming the bloated payroll and installing a new management team…………………………………Full Article: Source

Posted on 11 August 2014 by VRS |  Email |Print

Malaysia Airlines will be delisted after sovereign wealth fund Khazanah Nasional offered to buy out minority shareholders in a restructuring plan for the national carrier that suffered two disasters this year.
Khazanah will pay 27 sen a share for a total of 1.38bn ringgit (€320m) to buy the remaining 30.6pc it doesn’t own. The airline will need “substantial funding requirements” for the next few years to sustain operations, the company said. Malaysian Prime Minister Najib Razak said the revamp will involve “painful steps and sacrifices”. The carrier is struggling to stem losses and repair its image after the downing of Flight 17 in Ukraine last month compounded woes from the disappearance of a jet in March…………………………………Full Article: Source

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