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Sovereign Wealth Funds Briefing 19.Aug 2009

Posted on 19 August 2009 by VRS |  Email |Print

From Bloomberg: Sovereign wealth funds are seeking safer investments after facing “vehement” domestic criticism over losses linked to the credit crisis and a plunge in oil prices, analysts at State Street Corp. said.

“Criticism by the national media for their high-profile losses might even jeopardize their ability to take the long-term investment positions that have given them such a comparative advantage,” John Nugée, managing director and head of the official institutions group at Boston-based State Street, told reporters at a briefing in London yesterday……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Reuters: Sovereign wealth funds may decide to purchase instruments denominated in Special Drawing Rights to diversify, create more efficient portfolios and promote it as an alternative to the dollar, State Street said on Tuesday.

SDRs, the International Monetary Fund’s internal unit of account, have gained prominence recently when China proposed that they could be used as an alternative to the dollar as the world’s reserve currency……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Dow Jones: There are 37 sovereign wealth funds internationally with assets worth $1 billion or more each and collectively they are worth approximately $3.2 trillion, new research shows.

According to the research by State Street Global Advisors, 21 of the largest SWFs are sourced entirely from financial revenue derived from oil, accounting for around $2.2 trillion of the total. Of the largest funds, 13 are based in Asia and 10 belong to the Middle East……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Reuters: 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 which have recently signed agreements to form investment partnerships with each other……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Reuters: Sovereign wealth funds are increasingly working in concert to make joint strategic investments. Why are they doing this? First of all, by linking up capital and resouces, SWFs can leverage up, optimise local knowledge, spread risks and maximise returns.
An entity with diverse backgrounds can also enhance transparency, which could allay concerns among regulators and politicians who suspect SWF investments are politically driven……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Cnbc.com: Cramer recommended the sovereign wealth funds follow the same strategy as Saudi Arabia’s Prince Al-Waleed during the savings-and-loan crisis: Use the volatility in the US banking sector to buy a solid company on the cheap.
Cramer assumed the US government, which owns a 34% stake in Citigroup, would be willing to sell its holdings to a foreign bidder……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Dow Jones: The Qatari government has notified its Polish counterpart that state-controlled Qatar Investment Authority is prepared to study investing in two Polish shipyards and possibly to close any deal by end-August, said Polish Treasury Minister Aleksander Grad.

“We have received an official letter from the ambassador of the State of Qatar notifying us that the Qatar Investment Authority has begun a procedure that may end in the takeover of the shipyard project and its entry into it, replacing the presumed investor,” he told a news briefing.Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From AFP: A ray of hope emerged Tuesday for two struggling Polish shipyards as the government said Qatar’s national investment fund could step in after the failure of their sale to Qatari investors.

“I received an official letter from the Qatar Investment Authority concerning the launch of moves that could lead the authority to take over the investors’ commitments to the shipyards,” Treasury Minister Aleksander Grad told reporters……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Reuters: Singapore state investor Temasek has not set a deadline to replace CEO Ho Ching despite her designated successor’s surprise departure last month, the city-state’s finance minister said on Tuesday.

Tharman Shanmugaratnam said Temasek’s next chief should “ideally” be a Singaporean, but added the government would leave the decision to Temasek’s board……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From WSJ: Singapore’s finance minister said state-owned investment company Temasek Holdings Pte. Ltd.’s chief executive should ideally be Singaporean, but the government won’t interfere in the selection process.

“The question of whether the CEO of Temasek should be a Singaporean is not a trivial one; it is one which cabinet considered very carefully and debated on before arriving at a decision,” Tharman Shanmugaratnam told lawmakers in Parliament……….Full Article (Subscription Required) : Source

Posted on 19 August 2009 by VRS |  Email |Print

From Singapore Mind: When they brought in Goodyear, we were told that Temasek has been looking for a successor for Ho Ching since 2005. It took them 4 whole years to find Chip Goodyear who turned out to be unsuitable so Ho Ching will stay.
Minister Tharman said yesterday that Temasek has “no deadline” to find a successor……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Singapore Nnews Alternative: Charles “Chip” Waterhouse Goodyear IV was with BHP Billiton from 1999 until September 30th 2007.
Goodyear was with BHP back when Saddam Hussein was still in power. In fact, BHP was negotiating with Iraqi oil ministry officials for rights to develop oil fields in southern Iraq - once sanctions were lifted……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Ngrguardiannews.com: Another report of the Auditor-General of the Federation (AGF) has exposed how the controversial excess crude oil account has become a honey pot for all the tiers of government, characterized by illegal withdrawals.

Also, sloppy and sluggish record keeping and supervision by some regulatory agencies in the oil and gas sector have been responsible for the unexplained losses amounting to hundreds of millions of dollars, the 2005 audit report by Harts Group and SS Afemike has indicated yesterday……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

On one side you have countries with effective account surpluses due to the luck of their geography (fe: Norway, Abu Dhabi, Alberta,….) or their hard work transforming them as “location of excellence for their service industries” (fe: S’pore, HK, Switzerland). These countries can develop effective SWF to manage their account surpluses.
On the other side you have SWF created which are only “public accounting gimmicks” of countries with “no public account surpluses” (fe: France, Japan….)………Full Press Release: Source

Posted on 19 August 2009 by VRS |  Email |Print

From Malaysia Finance: Sovereign wealth funds squirreled away like frightened dogs feeling the full effects of the financial meltdown.
Many have been ridiculed as having overpaid for many of their purchases, jumping on the financial bandwagon with abandon. Well, they are bound to be back……….Full Article: Source

Posted on 19 August 2009 by VRS |  Email |Print

This study focuses on a major global issue: the rise of sovereign wealth funds (SWFs). Using the largest data set of their holdings to date, we document a large SWF premium of more than 15% of firm value.
Using data from 2002 through 2007 that includes SWF holdings in 8,000 firms in 58 countries, we find that firms with higher ownership by SWFs have higher firm valuations and better operating performance. Additionally, they tend not to invest heavily in firms in high-tech industries or those operating in areas involving intensive research and development……….Full Press Release: Source

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