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Sovereign Wealth Funds Briefing - Archive | August, 2009

Temasek to give freely to the community

Posted on 26 August 2009 by VRS  |  Email |Print

From In its newly revised charter, Temasek Holdings has spelt out its commitment to community giving loud and clear.

In a media roundtable yesterday, Temasek chief executive Ho Ching said that one key difference between the Temasek Charter 2002 and the Charter this year is that Temasek is being more explicit in its commitment to the community this time…………..Full Article (Subscription Required) : Source

Money of Azerbaijani Oil Fund for reconstruction of Samur-Absheron channel to finish over 2 months

Posted on 26 August 2009 by VRS  |  Email |Print

From Azerbaijan can face with the problem of deficit of funds to conduct expansion the complex of Samur-Absheron channel (SAC).

A governmental source says that although, the project is being financed by the Azerbaijani State Oil Fund, the resources of the fund are not unlimited under present conditions as well…………..Full Article: Source

SWFs bide their time

Posted on 26 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds may be close to testing the waters again, but continue to cautiously assess their missions and strategies, according to State Street Corp.’s latest report, “Sovereign Wealth Funds; Emerging from the Financial Crisis.”

“SWFs have experienced a more difficult environment than they expected in the last 12 months,” the report states. ”They are therefore more cautious with regard to more aggressive forecasts of their future wealth, driven largely by commodity prices, and more high-profile activities.”………….Full Article: Source

Inflation becoming a top concern for sovereign wealth funds

Posted on 25 August 2009 by VRS  |  Email |Print

From Inflation is becoming a top concern to sovereign wealth funds, which are looking at ways to guard their portfolios against price pressures, said State Street Global Advisors’ head of institutions business in Asia.

Persistent weakness in the US dollar and the extent to which many benchmark bond yields have fallen because of emergency policies are signals that inflation could become a bigger concern for sovereign funds, which typically have a longer time horizon, in about a year………….Full Article: Source

Kuwait’s KIA has no set plans to divest assets

Posted on 25 August 2009 by VRS  |  Email |Print

From Reuters: The Kuwait Investment Authority (KIA), which owns a stake in telecoms operator Zain among other publicly traded assets, has no set plans to sell its positions in listed companies, a newspaper said on Monday.

Daily al-Qabas cited unidentified sources as saying the sovereign wealth fund, which sold its stake in an Islamic lender in July, had not established a plan to divest assets but considered each offer on an individual basis………….Full Article: Source

Libya pours millions into City investments

Posted on 25 August 2009 by VRS  |  Email |Print

From Guardian: The Libyan Investment Authority (LIA), which manages the country’s $65bn (£40bn) oil wealth, has bought two buildings in recent months worth a combined £275m and instructed real estate advisers to look for more.
The Tripoli-based LIA, a so-called sovereign wealth fund which looks after long-term state reserves, is looking to open its first branch in London – paving the way for billions of dollars worth of investment to be channelled through the City………….Full Article: Source

Thai Shin says Temasek stake sale depends on market

Posted on 25 August 2009 by VRS  |  Email |Print

From Reuters: A plan by Singapore’s Temasek Holdings to sell its stake in Thailand’s leading telecoms group, Shin Corp, will depend on market conditions, an official at the Thai firm said on Monday.

The plan is followed closely by investors as it is likely to increase the volume of Shin shares trading in the market. Some analysts see the stock as a good proxy for Thailand’s telecoms industry but say the low free float is a trading risk………….Full Article: Source

Temasek sold off stakes in Vical and Equinix

Posted on 25 August 2009 by VRS  |  Email |Print

From Singapore News Alternative: Filings with the US Securities & Exchange Commission as at 13 Aug 2009 shows that Temasek had sold off its’ entire stakes in Vical Inc and Equinix Inc.
It is now left with Global Crossing in the US stock exchange. Vical Inc is in the biomedical industry, while Equinix is in data managment………….Full Article: Source

How SWFs lost big in the great recession

Posted on 25 August 2009 by VRS  |  Email |Print

From What a difference 18 months can make. As recently as the beginning of 2008, sovereign wealth funds owned by governments flush with massive oil revenues appeared to be the rising titans of global finance, leading some commentators to decry the rise of a “sharecropper economy” in the United States.

Buoyed by high oil prices and the bubbles they fueled, the funds purchased massive equity stakes in several Western investment and commercial banks, such as Abu Dhabi Investment Authority’s $7.5 billion purchase of a 4.9 percent stake in Citigroup in November 2007 or Qatar Investment Authority’s decision in October 2008 to increase its stake in Credit Suisse to 8.9 percent, becoming the company’s biggest shareholder………….Full Article: Source

SamrukKazyna’s investment portfolio amounts to USD 26bln at present.

Posted on 25 August 2009 by VRS  |  Email |Print

From National welfare fund SamrukKazyna’s investment portfolio amounts to USD 26bn, head of the fund Kairat Kelimbetov stated.
The fund approved 212 investment projects, 160 of which are being presently realized………….Full Article (Subscription Required) : Source

Sovereign wealth funds to become more active

Posted on 25 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds will soon start taking a more active role in companies they invest in, according to the Head of Sovereign advisory for State Street Global Markets, Andrew Rozanov, speaking with RT.…………Full Article: Source

Super funds mark five months of gains

Posted on 25 August 2009 by VRS  |  Email |Print

From Superannuation funds built on their recovery from the sharemarket trauma of the financial crisis, with the median fund further extending its gains last month, according to recent analysis.

The median balance superannuation fund increased 3.62 per cent in the month of July, marking the fifth successive monthly increase, research agency SuperRatings said………….Full Article: Source

Forex reserves in Asia ‘excessive’- ADB

Posted on 25 August 2009 by VRS  |  Email |Print

From Foreign exchange reserves of developing Asia, including the Philippines, have reached “excessive” levels, according to the Asian Development Bank (ADB).

ADB said the region would be better off investing the excess funds in productive activities rather than in traditional, risk-free assets………….Full Article: Source

Regional SWFs urged to support national budgets

Posted on 24 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds (SWFs) in Gulf oil producing countries need to play a more active role in supporting national budgets to lessen the influence of volatile crude prices on the fiscal balance, according to a Saudi official.

Majed Abdullah Al Moneef, an advisor at the Saudi Ministry of Petroleum and Mineral Resources, said the success of SWFs in the GCC to achieve financial and economic stability hinges on what he described as their flexibility in spending and withdrawal and depositing of funds…………Full Article: Source

China CIC to pay dividends, not interest

Posted on 24 August 2009 by VRS  |  Email |Print

From China Investment Corp, a $200 billion sovereign wealth fund, has agreed with the Finance Ministry to change the way it pays its funding costs, local media reported Saturday.

To fund CIC, the Finance Ministry issued 1.55 trillion yuan ($226.9 billion) worth of special treasury bonds at an annual rate of 4.3 percent in late 2007 to buy foreign exchange from the central bank…………Full Article: Source

Adic shortlists three firms to build Abu Dhabi headquarters

Posted on 24 August 2009 by VRS  |  Email |Print

From Sovereign wealth fund Abu Dhabi Investment Council (Adic) has shortlisted three companies for the contract to build its new headquarters complex in the UAE capital.

The shortlisted firms are the local/UK Al-Futtaim Carillion, the local/Lebanese Arabian Construction Company (ACC), and South Korea’s Samsung Corporation…………Full Article: Source

ASE denies speculation of investment from China SWF

Posted on 24 August 2009 by VRS  |  Email |Print

From China’s sovereign wealth fund reportedly is considering investing in Taiwan-based Advanced Semiconductor Engineering (ASE) and the back-end service supplier’s affiliate Hung Ching Development & Construction.
But ASE has maintained that China’s sovereign wealth fund has neither been in touch with the company or the subsidiary, nor made any investment…………Full Article: Source

Foundations, endowments may be potential co-investors for Temasek

Posted on 24 August 2009 by VRS  |  Email |Print

From Amid the current global slowdown, some sovereign wealth funds are broadening their investment strategies.

Collaborating with other investors on projects is not a new concept, even for sovereign wealth funds. For a start, Temasek Holdings is planning to engage sophisticated investors…………Full Article: Source

More choose to breastfeed

Posted on 24 August 2009 by VRS  |  Email |Print

From Temasek Holdings chief executive Ho Ching was once advised by her doctor to stop breastfeeding a week after childbirth.

She had contracted chicken pox. But despite the preventive measure, her baby got the virus too. The doctor then suggested she restart breastfeeding to pass on the antibodies to the baby through the milk…………Full Article: Source

SWF’s water investments

Posted on 24 August 2009 by VRS  |  Email |Print

From Reuters: Norway’s $350 billion sovereign wealth fund is aiming to invest 20 billion crown ($3.24 billion) investments over the next five years into water and other environmental technologies, such as carbon-capture storage and waste and pollution management.

The Norwegian fund says water was an important input or production factor for about 1,100 companies in its, whose combined market value is some $43 billion…………Full Article: Source

Future Fund dumps $2.4 bln of Telstra shares

Posted on 24 August 2009 by VRS  |  Email |Print

From The Future Fund, which was set up in 2006 to invest budget surplus cash for retired civil servant’s superannuation payments, has dumped 684.4 million Telstra shares.

Despite the massive selloff, the Future Fund still owns 10.9 percent of Telstra, down from 16.4 percent. The Future Fund’s board has committed to not sell any more Tesltra shares for at least 180 days…………Full Article: Source

Sovereign wealth funds add to pressure on the dollar

Posted on 24 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds (SWFs) could give substance to calls to replace the dollar as the global reserve currency, says George Hoguet, a global investment strategist at State Street Global Investors.

Hoguet says the enormous strain put on the financial system by the crisis bred increasingly loud appeals for a reform of the international monetary system. It also highlighted the debate over the introduction of “a new global financial architecture”………..Full Article: Source

Gulf Air cuts costs in fight to keep flying

Posted on 24 August 2009 by VRS  |  Email |Print

From Telegraph: Gulf Air, now wholly owned by the Bahraini sovereign wealth fund after Abu Dhabi, Qatar and Oman surrendered their stakes, is planning more job and route cuts and considering renegotiating the terms of aircraft orders with Airbus and Boeing in its battle for survival.

The airline is also holding the door open for a merger with another airline…………Full Article: Source

State-owned investment funds begin to cooperate

Posted on 24 August 2009 by VRS  |  Email |Print

From An increasing number of sovereign wealth funds are working in concert to make joint strategic investments to reduce risks and maximise returns, which could provide a stabilising force in financial markets.
State-owned funds from China, Singapore, Malaysia, Korea, Abu Dhabi and Kuwait are among those which have recently signed agreements to form investment partnerships with each other…………Full Article: Source

Porsche and VW finally map out merger plans

Posted on 24 August 2009 by VRS  |  Email |Print

From Now the two companies, with the help of one of Qatar’s sovereign-wealth funds, have at last laid out a road map for a merger by 2011 at the latest.

Many of the details are still rather vague, especially regarding the Qatari investment, but there is no longer any argument about where the two companies are heading…………Full Article: Source

GCC countries advised to weather the financial storm and prepare for the future

Posted on 24 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds (SWFs) and government-owned investment companies (GOICs) may step in to finance infrastructure projects as other pressing requirements compete with it for funding.

‘It’s important that SWFs and GOICs take a profit-driven approach when they participate in infrastructure development. They would also benefit from a broad effort to rationalize the current large number of funds and companies,’ explained Fayad…………Full Article: Source

Many business opportunities in Libya at time of global recession

Posted on 24 August 2009 by VRS  |  Email |Print

From On the one hand, Libya is diversifying its investments by not looking only North when it comes to Sovereign Wealth Fund investments.
Libya is actively encouraging the rest of the world not to view Africa as too risky to invest in, and hence is prepared to take the lead in joint venture investment into sub-Saharan Africa…………Full Article: Source

SWF move to safer bonds will last years-BNP Paribas

Posted on 21 August 2009 by VRS  |  Email |Print

From Stung by the financial crisis, sovereign wealth funds are moving away from equities toward inflation-linked bonds and total return products that are seen as safer, a senior executive at BNP Paribas Investment Partners said.

The $3-trillion-plus industry — which manages national windfall revenues for future generations — has been on a rollercoaster during the crisis, losing tens of billions of dollars as global stocks tumbled………….Full Article: Source

Australia Future Fund sells 34 pct of Telstra stake for A$2.37bln

Posted on 21 August 2009 by VRS  |  Email |Print

From Dow Jones: The Future Fund, Australia’s sovereign wealth fund, said late Thursday that it sold down 34% of its Telstra Corp. holding, after an underwritten share sale to institutional investors.

The fund sold 684.4 million shares at A$3.47 each for gross proceeds of A$2.37 billion, it said in a statement………….Full Article (Subscription Required) : Source

Telstra drops as Australia SWF cuts stake

Posted on 21 August 2009 by VRS  |  Email |Print

From Bloomberg: Telstra Corp. fell the most in more than five months in Sydney trading after Australia’s sovereign wealth fund sold A$2.37 billion ($1.97 billion) worth of shares in the nation’s largest phone company.

Telstra dropped 4.1 percent to A$3.50 at 1:56 p.m. on the Australian Securities Exchange, the biggest decline since March 10, after the state-owned Future Fund sold 684.4 million shares yesterday at a 4.9 percent discount to that day’s closing price………….Full Article: Source

Norway’s Fund favors covered bonds, avoids treasuries

Posted on 21 August 2009 by VRS  |  Email |Print

From Bloomberg: Norges Bank Investment Management, which oversees Europe’s largest sovereign wealth fund, favors European covered bonds over U.S. government debt as the global economy recovers from a recession.

Norway’s sovereign wealth fund, which manages 2.39 trillion-krone ($400 billion), is buying fixed-income securities backed by assets such as mortgages while avoiding Treasuries because of the “massive” amount of that debt being issued, according to Yngve Slyngstad, who manages the fund. …………Full Article: Source

GIC did not take part in Swiss govt’s UBS share sale

Posted on 21 August 2009 by VRS  |  Email |Print

From Dow Jones: Government of Singapore Investment Corp. Thursday said it did not participate in the Swiss government’s placing of UBS AG (UBS) shares, but added that it remains confident about the bank’s outlook.

“GIC did not participate in the placement of UBS shares,” the sovereign wealth fund said in a statement. “As a large investor in UBS, we maintain our confidence in the long-term prospects.”…………Full Article (Subscription Required) : Source

SWFs and national security: The great tradeoff

Posted on 21 August 2009 by VRS  |  Email |Print

From One of the most striking financial developments in recent years was the emergence of sovereign wealth funds (SWFs) – large publicly owned investment portfolios, which until recently were growing rapidly in both number and size.
In a global environment already roiled by a prolonged credit crisis, SWFs raise tricky and potentially controversial new questions for international financial regulation………….Full Article: Source

“Barbarians at the gate” to smash currency barriers? SWFs and special drawing rights

Posted on 21 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds (SWFs) could have a role to play in the creation of a common global currency through the private use of Special Drawing Rights (SDRs), it has been suggested.

A new paper from State Street looking at the future of SWFs describes how the funds have moved from being seen by some as “barbarians at the gate” to being feted as saviours of the financial system thanks to their refinancing efforts………….Full Article: Source

SWFs see assets shrink

Posted on 21 August 2009 by VRS  |  Email |Print

From After acting as oases of cash last summer, sovereign wealth funds‘ assets are down this year to $3.2 trillion down from $3.5 trillion last year, The Daily Telegraph reported, citing data from fund manager and sovereign wealth fund adviser, State Street.

Projections last year were that the wealth funds’ assets would reach as much as $20 trillion by 2020, meaning that these recent figures are far off from those estimates………….Full Article: Source

Crisis reshapes role of SWFs

Posted on 21 August 2009 by VRS  |  Email |Print

From The global financial crisis has dramatically altered the investment and political environment facing sovereign wealth funds, according to State Street’s latest report of SWFs.

Sovereign wealth funds attracted a lot of attention from late-2007 onwards when they embarked on a series of major cross-border equity investments………….Full Article: Source

Transparency: A double edged sword for SWFs

Posted on 21 August 2009 by VRS  |  Email |Print

From Reuters: Sovereign wealth funds, facing criticism from Western regulators and politicians for their opaqueness, are keen to open up their books.

While Norway is a leader in the SWF league of transparency, other countries like China have started publishing annual reports. But is transparency all good for SWFs?…………Full Article: Source

Bruneians keen on stake in SDC

Posted on 21 August 2009 by VRS  |  Email |Print

From A delegation from the Brunei Investment Agency (BIA), the investment arm of the Brunei Government, was briefed on the investment opportunity under the Sabah Development Corridor (SDC) here.

The delegation, led by Brunei Minister of Communication cum BIA Chairman, Pehin Abu Bakar Apong, listened to the briefing by Chief Executive of Sabah Economic Development and Investment Authority (Sedia), Datuk Dr Mohd Yaakub Hj Johari………….Full Article: Source

Dubai World liabilities total $59 bln end-2008

Posted on 21 August 2009 by VRS  |  Email |Print

From Reuters: State-owned conglomerate Dubai World has $59 billion of liabilities, a large proportion of the Gulf emirate’s total debt, as concerns over how its property subsidiary will manage repayments weigh on the market.

The group, which owns port operator DP World DPW and Istithmar World, the owner of high-end retailer Barneys New York, had 217.79 billion dirhams ($59.27 billion) of total liabilities as at December 31, its subsidiary Nakheel said in a statement on Nasdaq Dubai’s website………….Full Article: Source

Dubai World may pull out of Malaysian Maritime Project

Posted on 21 August 2009 by VRS  |  Email |Print

From The Dubai government’s investment arm, Dubai World, is contemplating pulling out its stake in the 16 billion ringgit or $4.5 billion Malaysian maritime centre project with local infrastructure and utility firm MMC Corporation Bhd., as the global economic slump takes its toll on the government-run company’s projects abroad.

Dubai World and MMC signed a MoU in September 2007 to build a maritime complex in Johor, south of Malaysia, which would include an oil terminal, drydocks, a shipyard, cargo handling facilties, logistics parks and real estate projects. The schedule was to start construction in late 2007 and begin operations by 2010………….Full Article: Source

Temasek CEO Ho Ching ranked 5th most powerful woman by Forbes

Posted on 21 August 2009 by VRS  |  Email |Print

From Temasek Holdings’ chief executive officer, Ho Ching, has been ranked fifth in Forbes’ annual ranking of the World’s Most Powerful Women. She is the only CEO of an Asia-based company in the top 10 list.

German Chancellor Angela Merkel clinched the number one spot for the fourth consecutive year………….Full Article: Source

Qatar SWF food arm plans to boost invest to $1 bln

Posted on 21 August 2009 by VRS  |  Email |Print

From Zawya Dow Jones: Hassad Food, a unit of the Qatar Investment Authority, said its investments in various projects are currently worth about $500 million and are expected to increase to more than $1 billion, Doha-based Asharq daily reports Thursday.

Hassad Food, established last year to provide food security to Qatar, expects to launch its products on the market within three years, the paper reports, citing Nasser Al Hajeri, Hassad Food’s chairman and managing director. …………Full Article (Subscription Required) : Source

Russian reserves fall $2.8 bln as Central Bank intervened

Posted on 21 August 2009 by VRS  |  Email |Print

From Russia’s international reserves fell $2.8 billion, the biggest drop in more than a month, as the central bank defended the ruble after it weakened to the lowest level in more than five months against the euro.
The value of the world’s third-largest stockpile slid to $400.6 billion in the week to Aug. 14 after rising by $1.4 billion to $403.4 billion in the previous week, the central bank said in an e-mailed statement today………….Full Article: Source

Mideast SWF deal revival seen by end ‘09

Posted on 20 August 2009 by VRS  |  Email |Print

From Gulf sovereign wealth funds (SWFs), having lost their appetite for acquisitions amid the downturn, are likely to ink more deals toward the end of the year on signs that a global economic recovery is on the horizon.

The funds, with trillions of dollars worth of assets, have orchestrated 15 deals worth $13.1 billion in the first seven months of this year, compared to 35 deals worth $28.1 billion in the whole of 2008, according to data from Dealogic…………Full Article: Source

Crisis has marked a coming of age for SWFs

Posted on 20 August 2009 by VRS  |  Email |Print

From Telegraph: In the barren financial landscape of last summer, sovereign wealth funds stood out as rare oases of cash.
Though hardly known and opaque, they were also seen as vast and invincible, and were called upon by parched companies and governments alike…………Full Article: Source

SWFs could provide boost for new world reserve currency

Posted on 20 August 2009 by VRS  |  Email |Print

From Attempts to create a viable reserve currency to challenge the global dominance of the dollar could be given a significant boost by sovereign wealth funds, which are looking to diversify their risk and shift their investment strategies towards their home markets, a report has claimed.

Investment manager State Street Global Advisors, in a report published on Tuesday, said SWFs are well positioned to encourage a liquid private market in International Monetary Fund Special Drawing Rights…………Full Article (Subscription Required): Source

SWFs to re-think asset allocations

Posted on 20 August 2009 by VRS  |  Email |Print

From Sovereign wealth funds will refocus on liquidity and re-evaluate the allocations of their combined US$3.2trn in assets, particularly their exposure to risk assets, as they emerge from the global financial crisis, a State Street panel said.
They are also investing more in their domestic markets, in some cases for the first time, in response to government demands…………Full Article: Source

SWFs ‘must dialogue’ with pension funds

Posted on 20 August 2009 by VRS  |  Email |Print

From IPE: The financial crisis is likely to make sovereign wealth funds (SWF) more, not less, active in their pursuit of strategic objectives and engagements as shareholders, and they should therefore pursue fuller dialogue with pension funds and other active investors, according to State Street.

The bank, which has worked with government and central bank clients for two decades and whose asset management arm, SSgA, runs almost $300bn for such institutions, was presenting its latest “Vision” paper, Sovereign Wealth Funds: Emerging from the Financial Crisis, in London…………Full Article (Subscription Required) : Source

SWFs team up on key investments

Posted on 20 August 2009 by VRS  |  Email |Print

From An increasing number of sovereign wealth funds are working in concert to make joint strategic investments in order to reduce risks and maximize returns, which could provide a stabilizing force in financial markets.

State-owned funds from China, Singapore, Malaysia, Korea, Abu Dhabi and Kuwait are among those that have recently signed agreements to form investment partnerships with each other…………Full Article: Source

State funds to become active investors

Posted on 20 August 2009 by VRS  |  Email |Print

From Australia’s Future Fund is the 14th largest sovereign wealth fund in the world, according to new research that predicts the giant funds may soon shed their traditional role as passive investors and become potent “activist” shareholders.

A total of 37 government-controlled funds each have more than $US1 billion ($1.2bn) in assets, with the Future Fund among a minority whose wealth is not based on oil resources…………Full Article: Source

August 2009
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