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Sovereign Wealth Funds Briefing - Archive | November, 2014

Osborne poised to take up the ConHome manifesto proposal for a Sovereign Wealth Fund

Posted on 13 November 2014 by VRS  |  Email |Print

In the ConservativeHome manifesto, we proposed “the creation of a UK Sovereign Wealth Fund into which all new public windfall revenues – for instance, the tax revenues from offshore gas and oil extraction – would be paid”.
Bang on cue, the Daily Mail reports that the Government “is preparing to announce plans for a sovereign wealth fund to hold the revenues from fracking for the north of England”. The news comes via Matthew Hancock, who is to make a speech today announcing the creation of a new National College for Onshore Oil and Gas………………………………………..Full Article: Source

Opinion: A fund for human capital

Posted on 13 November 2014 by VRS  |  Email |Print

The proposal from the Department of Energy and Climate Change (DECC) to establish a sovereign wealth fund based on future revenues from the extraction of shale gas, is, in principle a good idea. Many countries now have such a fund, turning current oil and gas revenues into a national asset for the long term. Norway’s fund is most often quoted as an example; another lesser known example is the state of Texas in the US which has such a fund for its universities.
The details of the proposal from DECC are yet to be released so its final shape and impact is unknown. Given the size of the UK economy, and our budget deficit, the idea that we can build a large financial fund of the type enjoyed by Norway is unrealistic………………………………………..Full Article: Source

China and Qatar buying London properties

Posted on 12 November 2014 by VRS  |  Email |Print

Sovereign wealth funds, forked out $8.9 billion for properties in London in the past year. London alone made up 44% of real estate investments of all foreign government money via their sovereign funds, according to research by Real Capital Analytics, a real estate research firm.
Qatar was the top spender, with Kuwait, China and Norway close behind. The Qatari sovereign wealth fund owns some of London’s most famous landmarks including the E.U.’s tallest building, the Shard, Harrods department store, and the Olympic village. In the last three years, the oil nation has spent $6.3 billion on London real estate………………………………………..Full Article: Source

If the UK has to have a shale gas sovereign wealth fund, it needs to do better than this

Posted on 12 November 2014 by VRS  |  Email |Print

The government’s plans for a shale gas sovereign wealth fund lack the firm commitment to decarbonisation that is required. It is a case of better late than never, I suppose. Several decades after Norway channelled the country’s oil and gas wealth towards a sovereign wealth fund that transformed a relatively impoverished northern European nation into one of the world’s richest and most developed countries, the UK has indicated that it might have finally learnt the importance of finding a productive long term use for a lucky windfall.
Set against the context of the UK’s scandalous decision to burn through its North Sea oil and gas wealth twice over - once to release climate changing gases and a second time by diverting the proceeds into Thatcher’s election buying housing booms and tax cuts- this week’s announcement Ministers are planning a shale gas sovereign wealth fund is to be welcomed………………………………………..Full Article: Source

$2.7 billion out of National Oil Fund to finance infrastructure projects

Posted on 12 November 2014 by VRS  |  Email |Print

$2.7 billion out of the Kazakhstan’s National Oil Fund accumulating windfall oil revenues is going to be earmarked to finance infrastructure projects. “The time has come for us to rely on the funds to the benefit of the country’s people, protecting the nation from the imminent crisis”, President Nazarbayev said in his Address to the Nation voiced at the sitting of the Nur Otan Party Political Council.
“The money will help us overcome the tough period and stimulate further economic growth. These resources are for short-term measures only; they will be channeled to develop transport, industrial and social infrastructure, as well as to support small and middle-sized businesses”, he said………………………………………..Full Article: Source

Kazakhstan To Use National Fund For Oil Price Damage Limitation

Posted on 12 November 2014 by VRS  |  Email |Print

For the second time in seven years, Kazakhstan will tap its National Fund as one way to help sustain its economy, which has become a victim of the global drop in oil prices. “One of the main tasks of the fund is to ensure the stability of our economy against external shocks, which include a fall in world prices for natural resources,” President Nursultan Nazarbayev said Nov. 11 in a televised address to the nation.
He said his government will use $3 billion a year from 2015 through 2017 “to develop transport, energy, industrial and social infrastructure,” but he also stressed that the expenditures will be accompanied by unspecified “structural reforms” to Kazakhstan’s economy………………………………………..Full Article: Source

Kazakh leader orders government to open oil fund for projects

Posted on 12 November 2014 by VRS  |  Email |Print

Kazakhstan’s president ordered his government on Tuesday to allocate $3 billion from the National Fund every year from 2015 to 2017 to bolster growth in an economy hit by falling oil prices and a slowdown in Russia.
The National Fund, which is replenished with windfall revenues from oil exports, stood at $76.8 billion as of Oct 31. Kazakhstan, Central Asia’s largest economy and the second-largest former Soviet oil producer after Russia, similarly tapped its fund after being hard hit during the global financial crisis of 2007-09, spending $10 billion to cushion the effects………………………………………..Full Article: Source

Annual $3 billion to be allocated out of National Oil Fund to bolster nation’s wellbeing

Posted on 12 November 2014 by VRS  |  Email |Print

As part of his Address to the Nation, Kazakhstan’s President Nursultan Nazarbayev has instructed his Government to allocate another $3 billion annually for the following 3 years out of the National Oil Fund accumulating windfall oil revenues, a Tengrinews.kz journalist reports from an extended sitting of the Nur Otan Party Political Council.
“The accumulated funds should be channeled at enhancing the nation’s wellbeing and they should be handled prudently. I commission to allocate an annual $3 billion in 2015, 2016 and 2017”, he said………………………………………..Full Article: Source

Zimbabwe’s Sovereign Wealth Fund put into gear

Posted on 12 November 2014 by VRS  |  Email |Print

Zimbabwe’s Treasury will with immediate effect remit a quarter of mining royalties to the Sovereign Wealth Fund (SWF) after President Robert Mugabe yesterday signed into law a bill to set up the fund, which is meant to secure investments for future generations and support economic growth.
A sovereign wealth fund is a state-managed pool of money drawn from the country’s reserves, set aside for investment in strategic areas that benefit the economy and its citizens. Funding for sovereign wealth funds is typically accumulated from revenues generated from the export of a country’s natural resources, such as minerals………………………………………..Full Article: Source

Kelvin Re 100% backed by Abu Dhabi sovereign wealth fund

Posted on 12 November 2014 by VRS  |  Email |Print

The Abu Dhabi Investment Council (ADIC) is the sole equity backer of Credit Suisse Asset Management (CSAM)’s Guernsey start-up reinsurance vehicle Kelvin Re, a report from rating agency AM Best has revealed.
Kelvin Re is expected to write a globally diversified reinsurance portfolio with gross premium of $100mn in its first year, of which two-thirds will comprise non-proportional catastrophe business. AM Best said this could increase by 8-12 percent in subsequent years, meaning non-proportional catastrophe risks could make up between………………………………………….Full Article: Source

Court Dismisses Gbajabiamila, Others’ Suit on Excess Crude Account

Posted on 12 November 2014 by VRS  |  Email |Print

A Federal High Court in Abuja has dismissed a suit filed by the Minority Leader of the House of Representatives, Femi Gbajabiamila and four other members of the House, challenging the legality of the creation of the Excess Crude Account by the federal government.
Justice Abdulkadir Abdulkafarati, in a judgment on Tuesday, held that the suit was an abuse of court process. He said about five similar suits were currently pending before the Supreme Court. The judge upheld the defendants’ objection, noting that the Attorneys-General of Taraba, Abia, Niger, Bauchi and Oyo States had filed similar suits, which are now awaiting the determination of the Supreme Court. As against the argument by the defendants, Justice Abdulkafarati held that the plaintiffs had the locus standi to institute the case………………………………………..Full Article: Source

CIC Says Private Equity to Benefit from China’s Overseas M&A Activity

Posted on 12 November 2014 by VRS  |  Email |Print

Private equity players are set to benefit as China’s private companies play a more important role in overseas acquisitions, said Linbo He, head of private equity at China Investment Corp., one of the world’s largest sovereign wealth funds.
Overseas mergers and acquisitions have long been dominated by Chinese state-owned enterprises given they have easy access to capital, are large in size and have resources and connections. But earlier this year Beiijing relaxed rules for private Chinese companies when they seek acquisitions abroad as the Asian country seeks to boost outbound investment………………………………………..Full Article: Source

Dr M’s take on losers, transgenders, 1MDB

Posted on 12 November 2014 by VRS  |  Email |Print

Former premier Mahathir Mohamad waxed lyrical on a number of issues gripping the nation today. On the issue of 1MDB, Mahathir condemned the fund outright, saying there was little need for a fund that only served to increase the country’s debt rather than live up to its name as the nation’s sovereign wealth fund.
He said, “1MDB is said to be a sovereign wealth fund, but it is not. It is money we have borrowed. When we borrow, we have to pay back. This is not wealth.” He also said the country would be much better off if the fund was done away with completely………………………………………..Full Article: Source

Chua Tee Yong sparks protest in Parliament after refusing to discuss 1MDB

Posted on 12 November 2014 by VRS  |  Email |Print

A ruckus broke out in Parliament today when Deputy Finance Minister Datuk Chua Tee Yong refused to answer questions on the controversial state sovereign fund, 1Malaysia Development Bhd (1MDB).
Tony Pua (DAP-Petaling Jaya Utara) had asked Chua about Putrajaya’s letter of support for 1MDB as well as a land deal for the relocation of defence units from land marked for government development project, Bandar Malaysia………………………………………..Full Article: Source

DAP rep, in diatribe, says 1MDB risks defaulting RM42 billion loan

Posted on 12 November 2014 by VRS  |  Email |Print

1Malaysia Development Berhad’s (1MDB) dismal performance in paying up RM317.3 million for a land acquisition despite repeated extensions was a sign that it was financially stretched, said a DAP lawmaker in a scathing attack on the debt-ridden state investment vehicle.
Petaling Jaya Utara MP Tony Pua said 1MDB has just missed the third deadline to pay up for a RM317.3 million land from Tadmax Resources Bhd. “After paying the 10% deposit for the land in February this year, 1MDB had been unable to make payment for the balance of the transaction despite shifting the deadline from August 20 to September 30 to October 10 and then to October 31,” the lawmaker told reporters at the Parliament lobby today………………………………………..Full Article: Source

Timor-Leste Oil fund worth US$16.6 billion in September

Posted on 12 November 2014 by VRS  |  Email |Print

The value of the Timor-Leste (East Timor) Oil Fund increased by just US$177 million in the third quarter due to payments to the state budget, the Timor-Leste Central Bank said Monday in Dili. According to the statement issued in Dili, the value of the Oil Fund was US$16.6 billion at the end of September.
From July to September the Fund recorded US$522.35 million of gross inflows in contributions and royalties, and outputs amounted to US$345.35 million, including US$340 million in the form of transfers to the state budget. The Timor-Leste Oil Fund, which was created in August 2005, receives all the state’s revenues from oil exploration………………………………………..Full Article: Source

Why Sovereign Wealth Funds Were Smarter Than Yahoo Shareholders

Posted on 12 November 2014 by VRS  |  Email |Print

Sunnyvale-based Yahoo was founded by hungry entrepreneurs, Jerry Yang and David Filo. Post dot-com-boom, Yahoo had acquired, sold and shuttered many high-profile acquisitions such as Geocities, Overture Services, Hotjobs.com, Right Media and Broadcast.com (which made Mark Cuban very rich.)
In 2013, Yahoo paid US$ 1.1 billion for a blog service called Tumblr, founded by young entrepreneur David Karp. Yahoo had purchased the trendy startup aspiring to challenge Facebook and Twitter. When Yahoo booked goodwill worth US$ 750.9 million from the deal, the company rebutted,”The acquisition of Tumblr is expected to bring a significant community of users to the Yahoo! network.” In comparison, back in 2013, Yahoo had only US$ 74 million in tangible assets………………………………………..Full Article: Source

Sovereign Wealth Funds Poised to Reach $7 Trillion by 2015

Posted on 11 November 2014 by VRS  |  Email |Print

As of November 2014, sovereign wealth fund assets totaled US$ 6.977 trillion compared to US$ 6.106 trillion in December 2013. This nearly US$ 900 million increase can be attributed by improvements in investment returns and capital flows into sovereign wealth fund vehicles.
In December 2007, sovereign wealth fund assets amounted to US$ 3.259 trillion. This unprecedented growth in public assets is having tremendous influence toward policymaking, economic stability, investment banking and asset management………………………………………..Full Article: Source

Equities to stay dominant in SWF portfolios: Cerulli

Posted on 11 November 2014 by VRS  |  Email |Print

While Asia’s biggest institutions are increasingly investing in alternative assets, sovereign wealth funds’ allocations continue to be dominated by equities, and that situation is likely to continue, said research house Cerulli Associates.
But a shared penchant for equities has not resulted in uniform performance, the firm found in a new report, in which it focuses on Asia’s four largest SWFs: Singapore’s GIC and Temasek, Korea Investment Corporation (KIC), and CIC International, the unit of China Investment Corporation that invests offshore………………………………………..Full Article: Source

UK lawmakers to consider shale gas sovereign wealth fund

Posted on 11 November 2014 by VRS  |  Email |Print

Britain’s upper house of parliament will on Monday consider plans for a sovereign wealth fund to be set up with revenues raised from shale gas, a source of energy which the government hopes will offset the decline of output from the North Sea.
As part of discussions about legislation on infrastructure, the House of Lords will debate a government plan announced over the weekend to create a fund with money raised from shale gas — once production of this gas trapped in rocks beneath the ground starts towards the end of the decade………………………………………..Full Article: Source

Decc announces plans for sovereign wealth fund based on shale gas

Posted on 11 November 2014 by VRS  |  Email |Print

The UK Department of Energy and Climate Change (Decc) has announced plans to set up a state-owned investment fund with future revenues from the extraction of shale gas. Launched with the support of Her Majesty’s Treasury, the sovereign wealth fund will be put in place when commercial production begins in order to ensure profits from national gas last for generations and benefit the whole country.
Energy secretary Ed Davey explained: “The sovereign wealth fund is about storing the financial benefits of shale production and putting it towards a low-carbon energy future. This is part of a broader strategy to strengthen the UK’s security of supply in a cost-effective way for future generations.” Energy and business minister Matthew Hancock added: “It’s clear – domestic gas is good for business, energy security and the whole of the UK.”……………………………………….Full Article: Source

UK proposes shale gas sovereign wealth fund

Posted on 11 November 2014 by VRS  |  Email |Print

George Osborne says money from shale gas production could create fund for north of England. A plan for new shale gas tax revenues to be deployed in a UK sovereign wealth fund is to be debated in the House of Lords on Monday.
Energy and climate change secretary Ed Davey said over the weekend that the proposed fund would be set up once commercial production of shale gas begins. “It’s about storing the financial benefits of shale production and putting it towards a low-carbon energy future,” he added. “It’s part of this government’s broader strategy to strengthen our security of supply in a cost-effective way for future generations.”……………………………………….Full Article: Source

Petrodollars: Figuring out what to do with PNG’s new LNG wealth

Posted on 11 November 2014 by VRS  |  Email |Print

As Papua New Guinea enters the small fraternity of LNG exporters, it needs to figure out what do with the money the poor nation is going to earn. Christine Forster looks at the issue in this week’s Oilgram News column, Petrodollars. The start-up in April this year of the ExxonMobil-operated Papua New Guinea LNG project was an historic moment for the small Pacific nation, marking the arrival of the world’s newest player on the global gas market.
At a price tag of $19 billion, the PNG LNG project represents the biggest investment in the country’s history. With the project now up and running at full capacity, and with the prospects firming for the development of a second LNG project at the InterOil-operated Elk-Antelope fields, PNG’s economy is set for a transformation………………………………………..Full Article: Source

Are Sovereign Wealth Funds About to Take Over European Soccer?

Posted on 11 November 2014 by VRS  |  Email |Print

Fans of European, and especially English, soccer have become used to a particular type of face in the crowd over the last decade - the face of the foreign billionaire club owner.
A sheepish, slightly dismayed grin plastered permanently on his face, Roman Abramovich, the former owner of Russian oil company Sibneft (now Gazprom Neft), looks down on every home game at London’s Chelsea Football Club, which he acquired in 2003;further north, at the City of Manchester Stadium, the beatific,sharp-suited Sheikh Mansour, member of the ruling family of Abu Dhabi, follows the progress of Manchester City, the once-struggling but vastly popular club he bought in 2008; over in Paris, proceedings at the Parc des Princes are dominated by the helmet hair of Nasser Al-Khelaifi, who has been chairman of Paris Saint-Germain since 2011………………………………………..Full Article: Source

Qatar bid doesn’t hit the right note for Songbird

Posted on 11 November 2014 by VRS  |  Email |Print

Canary Wharf majority stake holder, Songbird, has rejected a £1.6bn joint take over bid from the Qatari Sovereign Wealth fund and American Property Firm, Brookfield Property Partners. News of a potential deal broke at around lunchtime last Thursday with Songbird chairman David Pritchard initially saying:
“The board of Songbird will consider this approach in light of what is in the best interests of the shareholders in the company as a whole and in the meantime Songbird shareholders are advised to take no action.” However Songbird, which owns 69% of Canary Wharf and surrounding buildings, announced on Friday that it had rejected the Qatari bid………………………………………..Full Article: Source

Mumtalakat Hires Banks For Potential Dollar Sukuk Issue

Posted on 11 November 2014 by VRS  |  Email |Print

Bahraini sovereign fund Mumtalakat (BBB from S&P/Fitch) has hired BNP Paribas, Deutsche Bank, MUFG and StanChart to arrange a series of fixed income investor meetings starting on Thursday, Nov. 13.
A Reg S U.S. dollar-denominated sukuk transaction may follow subject to market conditions. Roadshows start in Kuala Lumpur on Thursday before moving to Singapore on Friday, Abu Dhabi and Dubai on Sunday before closing in London on Monday, Nov. 17………………………………………..Full Article: Source

‘Distribution of ECA funds violates provisions’

Posted on 11 November 2014 by VRS  |  Email |Print

The distribution of Excess Crude Account (ECA) savings among the three tiers of government has been described as a violation of the provisions establishing it. ECA, which came into force in 2007, by the signing of a Memorandum of Understanding (MoU) between the Federal Government and the states, prominently featured a clause the prohibited access to the fund until it is in excess of a certain amount.
The Acting Chairman of the Fiscal Responsibility Commission (FRC), Victor Muruako, made the disclosure while presenting his paper titled “Fiscal Responsibility and Declining Oil Prices”, at the Fiscal Governance Forum in Abuja, Monday………………………………………..Full Article: Source

Khazanah open to proposals for MAS restructuring

Posted on 11 November 2014 by VRS  |  Email |Print

Khazanah Nasional Bhd is open to receive proposals and ideas from various quarters for the restructuring of Malaysian Airline System Bhd (MAS). Khazanah deputy chairman Tan Sri Nor Mohamed Yakcop said the company was prepared to listen and weigh the ideas or proposals so that the restructuring process could proceed smoothly and successfully to enable MAS to get back to become the national airline that is the pride of the rakyat.
Besides being a symbol of national pride, he said Khazanah also wanted to turn around MAS to profitability as well as enabling it to provide huge benefits in the nation’s tourism and trade sectors………………………………………..Full Article: Source

1MDB attempting to cover up massive losses by revaluing their assets, claims Rafizi

Posted on 11 November 2014 by VRS  |  Email |Print

PKR said that the controversial government-owned investment company 1Malaysia Development Berhad could face bankruptcy if it continued to record massive losses year after year. Pandan MP Rafizi Ramli, who is a strong critic of the sovereign wealth fund, said Putrajaya was trying to cover up the real losses recorded by 1MDB by revaluing the entity’s assets.
He revealed that for the financial year ending March 31, 2014, 1MDB had recorded a loss of RM665 million, which was based on its profit or loss and financial position statements that were audited and filed with the Companies Commission of Malaysia………………………………………..Full Article: Source

Temasek buys 10.16% stake in Intas Pharma from ChrysCapital

Posted on 11 November 2014 by VRS  |  Email |Print

Singapore’s sovereign fund Temasek has bought 10.16 per cent stake in Intas Pharmaceuticals Ltd from PE firm ChrysCapital, for an undisclosed amount by way of a secondary PE deal, as per a press release. VCCircle had first reported that Temasek has emerged as the front-runner for buying the stake for around Rs 840 crore.
In September this year, Temasek, one of the two sovereign wealth funds of Singapore, received Competition Commission of India’s (CCI) approval to buy part of the stake held by ChrysCapital in the pharma company. It had also received a nod from FIPB, the nodal body monitoring foreign investment in the country, to go ahead with the transaction………………………………………..Full Article: Source

Britain to establish a sovereign wealth fund

Posted on 10 November 2014 by VRS  |  Email |Print

The British government said on Saturday that it would establish a sovereign wealth fund with the proceeds from extracting natural gas from shale. The announcement, which may be seen as premature because no shale gas production is likely to occur in the near future, is another step by the government of Prime Minister David Cameron to encourage development of a shale gas industry and overcome public opposition to hydraulic fracturing, or fracking.
Edward Davey, the energy minister, said in a statement that the sovereign wealth fund “was part of this government’s broader strategy to strengthen our security of supply in a cost-effective way for generations.” Oil-producing countries like Norway and Kuwait, as well as the emirate of Abu Dhabi, have built up large sovereign wealth funds intended to save and invest the proceeds from the extraction of fossil fuels for future generations………………………………………..Full Article: Source

Setting up a sovereign wealth fund would let future generations benefit from gas profits

Posted on 10 November 2014 by VRS  |  Email |Print

The natural assets of a country are, in part, infinite – the sunshine, rain, wind or wave power. But others are finite, for example the coal that powered Britain’s industrial revolution and for a time made this country the workshop of the world. Another lucky beneficiary of oil and gas is Norway. But after a fierce debate, that country took an alternative approach and created a sovereign wealth fund to invest the proceeds from its resource.
In about 20 years, the Norwegian sovereign wealth fund has reached more than $800 billion (£500 billion) and gives the people of Norway an annual income of £20 billion to £25 billion. The fund now owns 1.3 per cent of the entire world’s listed companies. Because of the limits placed on annual distributions from the fund, there is every chance that it will operate for a long time into the future………………………………………..Full Article: Source

Shale gas: George Osborne proposes north of England fund

Posted on 10 November 2014 by VRS  |  Email |Print

Shale gas extraction revenues could be held in a “sovereign wealth fund” for the north of England, the chancellor has said. George Osborne told BBC Radio 4’s Today programme the fund would be a way of “making sure money is not squandered on day-to-day spending”.
Friends of the Earth’s Helen Rimmer said it was “a desperate attempt to win over communities”. The idea will be discussed in the House of Lords on Monday. Possible sites for the extraction of shale gas have been identified across the north of England, with test drilling licences granted in Lancashire, Cheshire, Merseyside and Greater Manchester………………………………………..Full Article: Source

Italian sovereign wealth fund buys 23% of Rocco Forte Hotels

Posted on 10 November 2014 by VRS  |  Email |Print

Sir Rocco Forte is giving up nearly a quarter of his luxury hotels business to Italian investors in return for a £60m investment to double the size of its portfolio in five years. Rocco Forte Hotels will seek to add at least four properties in Italy as a result of the cash injection from sovereign wealth fund Fondo Strategico Italiano.
The fund will get 23 per cent of the company, and projects in Venice, Milan, Naples and Sicily have been identified for expansion. Beyond Italy, the group of 10 hotels will add Jeddah next summer and is also looking at Shanghai, New York, Paris and Madrid………………………………………..Full Article: Source

Norway proves oil-rich nations can be both green and prosperous

Posted on 10 November 2014 by VRS  |  Email |Print

Conventional wisdom suggests a big fossil fuel-producer like Canada can’t be both green and prosperous. It’s one or the other. Norway’s experience suggests this is a false choice. Through a combination of steep carbon taxes, careful management of its oil wealth and strategic investments in innovation, oil-rich Norway has found a comfortable balance between the environment and growth.
The key elements of Norway’s resource strategy are steep taxes (up to 78 per cent of resource profits), plus the creation of a government-owned oil company (Statoil) and a sovereign wealth fund (the Government Pension Fund Global) to sock away royalties for post-fossil fuel generations. Norway’s sovereign wealth fund is now the world’s largest, with assets of roughly $1-trillion (Canadian). That’s the equivalent of $196,000 for each of the 5.1-million Norwegians……………………………………….Full Article: Source

Russiam Minister Tells SWF to Disburse New Subsidized Loans for Russian Banks

Posted on 10 November 2014 by VRS  |  Email |Print

The Russian economic development minister has urged the country’s sovereign wealth fund to disburse subsidized loans to national banks to help them finance the Russian economy. “I think it is a good idea to use money from the National Wealth Fund as a basis for funding commercial banking operations so that our biggest lenders could get subsidized loans and, in their turn, give loans to such companies as [Russian crude producer] Rosneft and so on,” Economic Development Minister Alexei Ulyukayev said.
“It will be a win-win situation. [The National Wealth Fund] will make a good client and provide a predictable asset to the banks, reasonable loans on acceptable internal market conditions to companies, while the NWF will be able to make a transparent investment into a subsidized [financial] instrument. It could be carried out via NWF, or directly, or there can be other opportunities,” Ulyukayev said. The Russian National Wealth Fund (NWF) is Russia’s state-owned sovereign wealth fund investing in real and financial assets………………………………………..Full Article: Source

Australia missed a chance to set up wealth funds, says Asciano chairman

Posted on 10 November 2014 by VRS  |  Email |Print

ASCIANO chairman and BHP Billiton director Malcolm Broomhead says Australia to some extent wasted the decade-long commodities boom by failing to establish a sovereign-wealth fund and follow the likes of Norway. But the resources industry veteran says a fund is still needed to tackle looming demographic changes and that industry cost structures need to change to be able to establish one.
Mr Broomhead, speaking after a recent Australian Futures Project panel session at La Trobe University in Melbourne, said Australia had been through a “decade of decadence”. “We’ve ended up with the highest cost structure, albeit with the highest standard of living in the world, making it twice as expensive to stevedore a ship here as it is in New Zealand,” he told The Australian………………………………………..Full Article: Source

Goodman Group and Singapore’s sovereign wealth fund, GIC invest in Auckland’s Viaduct Precinct

Posted on 10 November 2014 by VRS  |  Email |Print

Investment in New Zealand’s property market is on an upward trajectory with a number of Australian-based joint ventures, public floats and residential projects be readied for completion in the short to medium term.
While the “cross border” trans tasman cash flow is not new, for the past few years its been more west to east, than the reverse. The trigger has been the improving market conditions in the main centres of Auckland and Wellington and the weight of money in the investment world seeking out higher yields in a low interest rate environment………………………………………..Full Article: Source

1MDB’s actions do not reflect a sovereign wealth fund

Posted on 10 November 2014 by VRS  |  Email |Print

I suspect that one of the aims of 1MDB was to correct the mistakes of the privately owned Independent Power Producers (IPPs) of the past — specifically the first generation IPPs where the agreements were too generous to the private companies.
By going on a IPP buying spree over the past two years (and incurring a lot of debt), 1MDB is now the second largest IPP and is scheduled to be the biggest IPP in Malaysia. Malaysia was supposed to have had a electricity price increase in July this year, but this never took place and the government has committed to keep electricity charges unchanged until July next year………………………………………..Full Article: Source

Rafizi to tell all about 1MDB’s Cayman fund next week

Posted on 10 November 2014 by VRS  |  Email |Print

PKR secretary-general Rafizi Ramli said he will reveal next week the details of 1Malaysia Development Berhad’s (1MDB) funds in the Cayman Islands. “Besides myself, a team from the National Oversight and Whistleblowers (NOW) will reveal the individuals and companies involved in the hiding of public funds in the Cayman Islands.”
He said in a statement that although Deputy Finance Minister Datuk Ahmad Maslan said the funds were being brought back to Malaysia, that was a separate issue………………………………………..Full Article: Source

ICD sets up Dubal Holding

Posted on 10 November 2014 by VRS  |  Email |Print

Dubai’s sovereign wealth fund Investment Corporation of Dubai (ICD) has set up a new subsidiary – Dubal Holding – to manage its 50 per cent shareholding in Emirates Global Aluminium (EGA), said a press statement on Saturday.
ICD and Mubadala Development Company set up DGA by merging their subsidiaries Dubal and Emirates Aluminium (Emal). EGA’s combined annual production currently accounts for 50 per cent of the total primary aluminium produced within the Gulf Cooperation Council region………………………………………..Full Article: Source

UAE’s Aabar buys 5.1% stake in Egyptian developer

Posted on 10 November 2014 by VRS  |  Email |Print

Aabar Investments has acquired a 5.1 percent stake in Egypt’s second-largest listed real estate developer Palm Hills, Palm Hills said in a statement on Sunday. Palm Hills is valued on the Egyptian Stock Exchange at approximately 5.6 billion Egyptian pounds ($785 million), putting the value of the investment at around 285 million Egyptian pounds, according to Reuters calculations.
Aabar, a subsidiary of the United Arab Emirates’ sovereign wealth fund and run by the Abu Dhabi government, will have a representative on the board, the statement said………………………………………..Full Article: Source

Qatar and Brookfield’s bid for Canary Wharf rejected

Posted on 10 November 2014 by VRS  |  Email |Print

Songbird Estates, the owner of London’s Canary Wharf financial district, rejected an approach from Qatar Investment Authority and Brookfield Property because the proposed bid is too low.
The Qatar fund and Brookfield may offer 295 pence a share, Songbird said in a statement. The owner of about 6pc of Canary Wharf Group climbed 22pc to 320 pence in London trading yesterday after announcing the approach………………………………………..Full Article: Source

Asian Sovereign Wealth Fund Portfolios Still Dominated by Equities

Posted on 07 November 2014 by VRS  |  Email |Print

Despite strong attention focused on allocation to alternatives such as private equity and real estate by Asian sovereign wealth funds (SWFs), their allocations to equities continued to dominate through year-end 2013, says a report by research firm Cerulli Associates Asia.
About 70% of Singapore’s Temasek Holdings’ investments are in listed securities, according to the Singapore firm’s latest annual report. Korea Investment Corporation’s exposure to equities has been increasing steadily, from 41.8% in 2010 to 48.5% in 2013. China’s China Investment Corporation has a slightly lower ratio of 40.4% of its portfolio in public equities as of 31 December 2013………………………………………..Full Article: Source

Philippines’ Emperador says Singapore’s GIC to buy initial 9.64 pct stake

Posted on 07 November 2014 by VRS  |  Email |Print

Philippine liquor firm Emperador Inc said on Friday it had agreed to sell a 9.64 percent stake to GIC for 17.6 billion pesos ($391 million), in what it described as an initial investment by the Singaporean sovereign wealth fund.
The deal comprises an equity investment of 12.32 billion pesos for the purchase of 1.12 billion common shares equivalent to a 6.95 percent direct equity stake in Emperador, and equity-linked securities (ELS) worth 5.28 billion pesos………………………………………..Full Article: Source

GIC takes another bite of New Zealand real estate sector in joint venture for 5 malls

Posted on 07 November 2014 by VRS  |  Email |Print

Sovereign wealth fund GIC is increasing its interests in the real estate sector in New Zealand. It said on Thursday that it has entered into a joint venture partnership with Scentre Group to acquire five New Zealand malls with a combined gross value of NZ$2.1 billion.
GIC will own a 49 per cent interest in each of the five malls in New Zealand - Westfield Albany, Westfield Manukau, Westfield Newmarket, Westfield Riccarton and Westfield St Lukes. Scentre is New Zealand’s largest shopping centre operator, managing about nine shopping centres with annual sales in excess of NZ$2 billion………………………………………..Full Article: Source

Singapore fund buys into NZ Westfield shopping centres

Posted on 07 November 2014 by VRS  |  Email |Print

A billion dollar property deal by Singapore for a stake in some of New Zealand’s top shopping malls shows the super city model has made Auckland attractive to overseas investors, a property industry boss says. Singapore Government’s investment fund GIC has paid A$930 million ($1.1 billion) for 49 per cent ownership in five Westfield Shopping Centres as part of a joint venture with the malls’ owner, the ASX-listed Scentre Group.
Four of the five malls are in Auckland, at Albany, Manukau, Newmarket and St Lukes, with the other one in Riccarton in Christchurch. Scentre will continue to manage them. Its Glenfield, WestCity, Queensgate in Wellington and Chartwell in Hamilton are not involved in the deal………………………………………..Full Article: Source

Leak reveals Future Fund and multinationals’ secret offshore tax deals

Posted on 07 November 2014 by VRS  |  Email |Print

Directors of the Australian government’s Future Fund as well as PricewaterhouseCoopers, Macquarie and AMP could be forced to face a Senate inquiry into tax avoidance following a global investigation into secret tax deals in Luxembourg.
Thousands of leaked documents published by the International Consortium of Investigative Journalists on Thursday revealed how Australian and multinational companies used accounting firm PwC to strike deals in Luxembourg to shift profits and avoid tax………………………………………..Full Article: Source

MAS minority shareholders approve Khazanah plan

Posted on 07 November 2014 by VRS  |  Email |Print

Malaysia Airlines (MAS) minority shareholders have approved Khazanah Nasional Bhd’s privatisation offer of 27 sen a share at its EGM on Thursday. The proposal received 93.3% approval from the minority shareholders who turned up at the EGM, which was held at the MAS academy in Kelana Jaya.
This was the ailing airline’s most important EGM ever in its corporate history, as its fate was decided by the minorities to enable it to start afresh in July next year. Its share price fell to an intra afternoon low of 18.5 sen. At 4.30pm, it was unchanged at 26 sen………………………………………..Full Article: Source

Khazanah promises transparency on MAS revamp

Posted on 07 November 2014 by VRS  |  Email |Print

State investment arm Khazanah Nasional Bhd promised to remain transparent on Malaysia Airlines (MAS) restructuring process even after the airline’s privatisation, Minority Shareholder Watchdog Group (MSWG) said.
General manager of corporate services Lya Rahman said long-time shareholders had voiced out their views and concern and Khazanah should take note of them. “Khazanah should be transparent all the way in whatever they do as this is national interest. Let Khazanah do their job and let’s pray that it is a successful attempt after the previous attempt failed,” she told reporters after MAS extraordinary general meeting at Kelana Jaya……………………………………….Full Article: Source

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