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Sovereign Wealth Funds Briefing 11.Feb 2015

Posted on 11 February 2015 by VRS |  Email |Print

Norway’s oil industry, so rich it spawned the world’s largest sovereign wealth fund, is struggling as oil prices plunge. When Joergen Langaunet started as a project planner at offshore engineer Aker Solutions ASA in 2012, he worked a lot of overtime.
Norway’s oil industry, so rich it spawned the world’s largest sovereign wealth fund, was booming. Then last year, he realised he was spending most of his time in the lunch room: His services weren’t needed. In September, as crude prices were on their way to the biggest plunge since 2008, Langaunet lost his job. Today he’s a regional manager for Tine SA, Norway’s biggest dairy producer………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

The big advantage that Norway has is the US$860bn (£565bn) Norwegian Government Pension Fund Global into which the oil money is deposited. Intended as an investment for future generations, it is the largest sovereign wealth fund in the world.
Norway owns an estimated 1% of global stocks and is considered to be the largest state owner of European stocks. For a country with a population just over 5m, this is a position of remarkable economic strength – thanks primarily to petroleum. The revenue of the sector is not only important as an economic boost, but also as the foundation of the Norwegian welfare state………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

Just last week, Norway announced that its sovereign wealth fund — an $850 billion pension reserve that was built on the Scandinavian nation’s oil and gas resources — had jettisoned more than 49 companies, many involved in coal and unconventional oil extraction, from its portfolio in 2014.
The reason: “Uncertainty about the sustainability of their business model.” To be sure, Norway is still investing heavily in fossil fuels. But the move nonetheless adds to the more than $50 billion that proponents of divestment say has been pulled out of the fossil fuel sector by both institutional and individual investors since the movement was launched by climate activists in 2012………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

Lst year’s budget said that the Prosperity Fund wouldn’t move forward until the LNG tax was finalized, and that happened last fall. This makes now a good time to renew the discussion about a sovereign wealth fund in B.C. First off, let’s revisit what a sovereign wealth fund is and why resource-dependent regions use them. When it was first announced, the B.C. Prosperity Fund was pitched as a way for B.C. to pay off its debt, reduce taxes, and pay for social services.
The new money would be tax revenue from a new LNG industry, and B.C. could conceivably use it to pay off debts or lower taxes or build hospitals without creating a sovereign wealth fund. So why do it? Sovereign wealth funds are generally created for two main reasons: to stabilize government finances when prices for natural resources rise and fall, and to preserve resource wealth for the future………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

If the UK wants to establish a citizen’s, as opposed to a sovereign wealth fund, then the lesson is that citizens are more likely to monitor and care about the performance of that fund if they are individual, direct beneficiaries of its performance.
Equally, a basic income attached to individuals as a right of citizenship is more likely to be realised and entrenched if it is bundled up with a permanent funding source, and so is quarantined from the vicissitudes of annual budget rounds and spending decisions………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

Oil and gas currently fund around 90 percent of the annual government revenue and also account for around 80 percent of GDP and 93 percent of exports. With the proceeds from gas extraction the government has established a sovereign wealth fund, hoping to ensure a more diversified economy and more widely distributed economic growth.
While East Timor’s sovereign wealth fund will likely provide a temporary buffer for the loss of oil and gas revenues, the size of the fund is still moderate, with an estimated 16.6 billion USD in assets, according to experts………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

General Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces,said: “With the leadership of Khalifa, we established the Abu Dhabi Investment Authority (ADIA) in the ’70s, which today is considered the second-biggest sovereign investment fund in the world.
“We have also started working on establishing a plant for clean nuclear energy; 25 per cent of the country’s needs will be dependent on this clean nuclear energy once we build the first nuclear plant in 2017.” He acknowledged Ahmad Khalifa Al Suwaidi and Mohammad Habroush for their role in the founding of ADIA. Shaikh Mohammad said the country has also started advancing in the manufacturing industry. “Srata Manufacturing in Abu Dhabi manufactures parts of Boeing and Airbus planes. If that is not impressive enough, 83 per cent of the workforce are women,” he added………………………………………..Full Article: Source

Posted on 11 February 2015 by VRS |  Email |Print

A unit of Temasek Holdings has invested an undisclosed amount in local construction firm Deluge Fire Protection to allow it to expand further overseas, said the Straits Times, citing an executive of the firm.
The capital injection by Heliconia, which focuses on helping local small and medium-sized enterprises, will underpin the firm’s expansion into Indonesia and the Philippines amid rapid urbanisation across the region, it said………………………………………..Full Article: Source

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