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Sovereign Wealth Funds Briefing 20.Nov 2014

Posted on 20 November 2014 by VRS |  Email |Print

Social Europe Journal has just published its latest Research Essay “Public Capital in the 21st Century” by Giacomo Corneo. The main argument of the paper is that the state should become a kind of investment state in order to make sure that high returns on capital do not further increase inequality but benefit the wider public.
To achieve this, Corneo argues that governments should set up sovereign wealth funds to manage their investments and take advantage of low interest rates on sovereign bonds as investments should be debt-financed. Having read the paper I was wondering whether this would also be an option to create the much-touted fiscal capacity for the Eurozone. Such a mechanism wouldn’t need Eurozone taxes or tax harmonisation (although both would be desirable) and does not require an open-ended commitment to joint debt……………………………….Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

State Oil Fund of Azerbaijan should reconsider ruble policy, said the MP Faraj Guliyev in the discussion of budget package for 2015 at the plenary meeting of Azerbaijani Parliament.
He noted that SOFAZ invested in ruble and as the ruble’s value declines, Fund’s assets will also be decreased: “Ruble’s value declines. If it continues, our assets in ruble will decrease. I think the Fund should reconsider ruble policy”. Guliyev also says measures should be taken for reduction of dependence of budget on oil: “There are countries without oil. How do they form the budget?”………………………………Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

Parliament of Azerbaijan clamped down on an attempt to withdraw assets of the State Oil Fund of Azerbaijan (SOFAZ) from the world markets in order to decrease internal loan rate to 2%. Valeh Alasgarov, Vice Speaker of the Parliament, called for the deputies to stop speculative talks on impact of fall in the world oil prices to the economy of the country and on withdrawal of SOFAZ assets from foreign markets.
“Can you imagine what could happen if Azerbaijan hadn’t accumulate funds in the Oil Fund? What kind of future could we face if we hadn’t allocate funds for implementation of Shah Deniz, TAP, TANAP and other projects, as well as for construction of the bridge over Samur. I want to say that every decision taken by the government of Azerbaijan is well-considered and reasonable and it’s confirmed by today’s development of our economy and today’s image of our country. That’s why I call for the deputies to stop such talks and speculations on the existing situation”, - Alasgarov said……………………………….Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

Norway’s government funnels most of its oil revenue into its sovereign-wealth fund, the world’s largest. Prime Minister Erna Solberg, who came to office last year, has cut taxes to boost productivity in the mainland economy and said Norway needs to diversify away from oil.
Norges Bank Governor Oeystein Olsen said in an interview in Bergen, Norway, yesterday that he sees “dark clouds” ahead for the economy, partly because of concerns over the development of the oil industry. Energy companies predict the sector will see an 18 percent drop in investment in 2015……………………………….Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

Kazakhstan’s Alliance Bank has completed a $1.2 billion debt restructuring and the country’s sovereign wealth fund will put 220 billion tenge ($1.2 billion) of special deposits into the bank to support the deal, Alliance’s chief executive said on Wednesday.
Sovereign wealth fund Samruk-Kazyna will support the restructuring through 10-year special term deposits with an aggregate nominal value of 220 billion tenge, CEO Timur Issatayev told Reuters……………………………….Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

Footballers for Galatasaray, the legendary Turkish club, may soon be wearing the name of Kazakhstan’s capital, Astana, across their chests. Kazakhstan’s sovereign-wealth fund, Samruk-Kazyna, is rumored to be close to signing a five-year, $50 million deal to sponsor Galatasaray, Turkish media has reported.
Samruk-Kazyna is the main source of funding for the Astana Presidential Sports Club. Astana was already affiliated with the Istanbul-based team after the two signed a cooperation agreement in April. It is unclear if the jerseys will be marked “Astana” or “Samruk-Kazyna.”………………………………Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

A District-based start-up that uses artificial intelligence to predict the outcome of legislation has received $7 million in funding, including investments from the Singapore sovereign wealth fund and from the Winklevoss twins, made famous from their lawsuits against Facebook.
FiscalNote, founded by a Potomac entrepreneur, uses data-mining software and artificial intelligence to predict the fate of the bills proposed by state legislatures and by Congress each year. The company claims 94 percent accuracy……………………………….Full Article: Source

Posted on 20 November 2014 by VRS |  Email |Print

Additionally, two important institutional arrangements in the fiscal arena are the Social Fiscal Responsibility Law (SFRL) and a sovereign wealth fund (Fondo de Ahorro de Panama, or FAP), although they have had a limited and somewhat questionable track-record. Over the past few years, authorities have repeatedly circumvented the deficit ceiling defined by the SFRL through a series of waivers and changes.
While we recognize that policy flexibility is required to respond to special conditions, the frequency of changes and waivers to the fiscal rule reaffirms our view that Panama’s fiscal arrangements lack credibility and, consequently, fail to enhance policy predictability. Until the government establishes a track record of strict adherence to the terms of these fiscal controls, they will provide limited credit enhancement. Moreover, we do not expect the sovereign wealth fund to generate significant net savings……………………………….Full Article: Source

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