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Sovereign Wealth Funds Briefing 02.Feb 2015

Posted on 02 February 2015 by VRS |  Email |Print

Global crude prices are in the midst of a slump, squeezing the bottom lines of oil companies and petro-states around the world. So how do sovereign wealth funds (SWFs) cope in this environment? The asset management arms of many oil-producing countries around the world are worth a collective $7 trillion. Most SWFs, particularly those based in the Middle East, are notoriously secretive yet have a lot of weight—and cash—to throw around in global markets.
Meanwhile, they are regarded as patient, big-picture moneymakers: A working paper from the International Monetary Fund notes that SWFs sustained heavy losses in the 2008 crisis, but recovered them “by demonstrating their willingness to be long-term investors and riding out their financial turmoil.”……………………………………….Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Qatar Airways has bought a stake worth about 1.15 billion pounds ($1.7 billion) in the owner of British Airways and Iberia, aiming to forge closer links to a group with two major European hubs and strong transatlantic networks. The Gulf airline, which disclosed a 9.99 per cent holding on Friday, already partners International Consolidated Airlines Group (IAG) in the oneworld alliance and has limited code-sharing deals and a freight partnership with BA.
Buying the stake could deepen the relationship, giving Qatar greater access to destinations served by IAG’s London and Madrid hubs, particularly transatlantic, with North America well served by British Airways and South and Central America by Iberia………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Qatar’s European asset shopping spree isn’t showing any signs of slowing down. State-owned Qatar Airways has bought a 9.99% stake in International Airlines Group (IAB), the holding company formed in 2011 through the merger of British Airways and Iberia. The shares appear to have been bought piecemeal on the open market, which caught analysts napping.
Qatar Airways said the purchase, which is worth £1.1bn at current prices and makes it the largest shareholder in IAG, was ‘part of efforts to enhance operations and strengthen existing commerical ties’ between them. Both airlines are already part of the Oneworld Alliance, collaborating on ticketing and transfers, and have codesharing agreements where they each market the same flights under their respective brands………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

After a pause in dealmaking, Qatar is back, and the world’s richest country per capita has once again picked the UK as the top destination to deploy its billions. A Qatari-led group succeeded in buying London’s Canary Wharf on Friday, ending a battle for control of the financial district that began in November.
Qatar Airways, meanwhile, announced that it bought 9.99% of British Airways parent IAG for £1.15bn ($1.7bn). One twist this time around: While most of Qatar’s stakes have been purely financial investments, the IAG purchase is driven by corporate operational strategy………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Investment Corporation of Dubai (ICD) has acquired a controlling stake in the troubled South Korean construction firm Ssangyong Engineering & Construction, according to media reports.
The Seoul-based JoongAng Ilbo newspaper and Yonhap News Agency reported last week that the Dubai sovereign wealth fund behind Emirates Airline, Emaar Properties and Emirates NBD signed a deal last Thursday to acquire the construction company for 200 billion Korean won (Dh667.7 million). ICD was named as preferred bidder for the construction company in December, according to reports in the Korean press, ahead of the Korean companies Samra Midas Group and Steel & Resources………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

The National Social Security Fund (NSSF) has recorded a 23% increase in operating profit for half year ending December 31, 2014 when compared to the same period in the last fiscal year.
The Fund reports better returns on its investments and better cost management. Profit before interest for the six months increased to Ushs202 billion up from Ushs156 billion during the same period last Financial Year. Over the same period, NSSF’s total assets grew from Ushs3.9 trillion to Ushs4.9 trillion………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Global Infrastructure Partners has teamed up with Queensland Investment Corporation and ­Borealis in the contest to buy the Port of Melbourne, which could sell for as much as $5 billion. The consortium, advised by Credit Suisse and Gresham, will compete with other parties for Australia’s busiest container and cargo port, being sold by advisers Morgan Stanley and Flagstaff.
Other bidders known to be ­preparing to compete in the sales process are IFM, advised by JPMorgan, and Hastings Funds Management together with Wren House, which are advised by Royal Bank of Canada and UBS. Wren House is the infrastructure arm of sovereign wealth fund Kuwait ­Investment Authority………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Norway’s €755bn sovereign wealth fund Pension Fund Global has bought Queensbury House on Savile Row in central London - in which its management group is a principal tenant - from Italy’s Sorgente Group for £190.6m.
Norges Bank Investment Management, which manages the giant fund, bought the building in an all-cash deal, repaying all debt secured against the building. Sorgente, which held the property in its Fondo David, put the building up for sale last year with a £190m asking price. The building, which fronts onto Old Burlington Street and the renowned Savile Row, has 6,300 sq.m. of office space spread over six floors and 650 sq.m. of retail let to mens’ tailors. Norges is one of five tenants, also including private equity firm Summit Partners, and GB Holdings………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

The Norwegian krone firmed against the euro Friday after the country’s central bank said it would increase the amount of kroner it will buy on behalf of its sovereign-wealth fund next month, as it seeks to match the currency inflows from the oil sector with the government’s spending needs.
Norges Bank said it would sell the foreign exchange equivalent of 700 million kroner a day ($89.8 million) in February, which is the largest daily amount since the bank started buying kroner in this way last October………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

A group of the world’s biggest sovereign wealth funds are interesting in acquiring shares in a merged O2 and Three – which is expected to become the largest British mobile phone operator. Hutchison Whampoa, a Hong Kong conglomerate, announced its intention to take over O2 for £10.25 billion and merge it with Three UK, the smallest mobile network that it currently owns.
According to Sky News, investors from China, Singapore and the Middle East have been in talks with Hutchison Whampoa about purchasing shares in the new merged company. The talks are at an early stage, but reports say that there have been approaches from the Government Investment Corporation of Singapore and various Canadian pension funds………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Chinese companies are increasingly investing in the United Kingdom’s infrastructure sector, with the potential to invest 105 billion pounds ($170 billion) in the energy, property and transport sectors by 2025. In the years following the outbreak of the global financial crisis, Chinese companies and sovereign wealth funds have invested in UK infrastructure projects as financial investors.
In 2012, China Investment Corp, the country’s sovereign wealth fund, bought an 8.68 per cent stake in Thames Water Utilities Ltd and a 10 per cent stake in Heathrow Airport Holdings. In 2011, Cheung Kong Infrastructure Holdings purchased the UK utility company Northumbrian Water for 2.4 billion pounds. ……………………………………….Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

After eight years and eight attempts to find a new owner, Ssangyong Engineering and Construction was finally acquired by the Investment Corporation of Dubai (ICD). According to Korea’s 19th-largest builder, which is currently under court protection, the Seoul Central District Court on Wednesday approved ICD’s investment plan and the contract was signed Thursday. However, the details of the contract, including the price, were not disclosed.
ICD, a sovereign wealth fund owned by the government of Dubai in the United Arab Emirates, was selected as the preferred bidder for Ssangyong E&C on Dec. 18 and has been conducting due diligence from Jan. 5 to 26 to purchase the builder, which is best known for building the landmark resort hotel Marina Bay Sands in Singapore………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

Petaling Jaya Utara MP Tony Pua, look at it this way. The PM (as chairman of the sovereign fund) is caught between a rock and a hard place. If the loan is not repaid, those banks that lend the money to 1MDB (1Malaysia Development Berhad) would be in trouble in respect of their capital ratio adequacy caused by the non-performing loan (NPL) and BNM (Bank Negara Malaysia) would be forced to take action.
This is turn might cause a severe stress on the financial and banking system which the central bank can ill-afford at the present time………………………………………..Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

It is a complete embarrassment for the Malaysian Government that 1Malaysia Development Bhd (1MDB) had to stoop to begging a loan from billionaire Ananda Krishnan to repay an overdue RM2 billion debt.
Yesterday, it was reported by both Reuters and The Edge Financial Daily that businessman Tan Sri Ananda Krishnan is understood to have firmed up an agreement to loan beleaguered 1Malaysia Development Bhd (1MDB) as much as RM2 billion to help the strategic investment fund settle a debt obligation to Malayan Banking Bhd (Maybank) and RHB Bank Bhd due at the end of this month. ……………………………………….Full Article: Source

Posted on 02 February 2015 by VRS |  Email |Print

The Treasury must come clean and make public all the terms behind Ananda Krishnan’s RM2bn rescue of the government investment company 1Malaysia Development Bhd, the DAP’s publicity secretary Tony Pua, said.
He said it was “a complete embarrassment” for the government that 1MDB “had to stoop to begging a loan” from billionaire Ananda Krishnan to repay 1MDB’s overdue RM2 billion debt to Malayan Banking and RHB Bank. Ananda Krishnan (AK) sold his power-generatIng group Tanjung Energy to 1MDB, which paid him through a two-part loan totalling RM5.5bn, the Edge has previously reported. It said there were no problems with the first part, a RM3.5bn 10-year loan. ……………………………………….Full Article: Source

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