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Sovereign Wealth Funds Briefing 10.Nov 2014

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

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

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

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

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

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

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

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

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

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

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

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

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

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