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Sovereign Wealth Funds Briefing 28.Oct 2015

Posted on 28 October 2015 by VRS |  Email |Print

Russia is running out of emergency funds. The country, which has been relying on its sovereign-wealth fund to plug gaps in its budget deficit, said its Reserve Fund is likely to be depleted in 2016. The news is another blow to an economy reeling from weak oil prices and Western-led sanctions in connection with fighting in Ukraine.
“Our reserves volume will decrease by approximately 2.6 trillion rubles ($40.85 billion) — more than half. This means that 2016 is the last year when we are able to spend our reserves that way. After that we will not have such resources,” Russian Finance Minister Anton Siluanov told Tass, the government-owned news agency………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Kazakh sovereign wealth fund Samruk-Kazyna said on Oct. 27 it had signed a five-year syndicated loan worth up to $1.5 billion to help it buy a stake in the Kashagan oilfield from Kazakh state oil and gas firm KazMunaiGas. The Bank of Tokyo Mitsubishi UFJ, Ltd. was mandated as the sole coordinator, bookrunner and lead arranger for the loan which was Samruk’s debut transaction of the kind.
Samruk, managing state-run stakes in major Kazakh companies varying from oil and gas to railways, airlines and uranium, said the loan had originally been signed for $1 billion, but a clause in the deal would allow it to raise the amount to $1.5 billion………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Norway’s sovereign wealth fund has urged companies to be transparent on lobbying surrounding water management and risks. Companies should also promote best practice of water usage and consider putting in place a mechanism that allows third parties to consult with them directly on matters of water management, according to a revised paper released by Norges Bank Investment Management (NBIM).
The manager for Norway’s Government Pension Fund Global, long active in the area of water management and a supporter of charity CDP on the matter, also urged companies to engage directly with local communities about water reclamation………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Just weeks after the Nobel prizes were announced out of Norway, world attention will shift back to Oslo this week when Norwegians find out how well their country’s sovereign wealth fund, the world’s largest, has weathered the rollercoaster ride in the price of oil.
The signs are worrying: For the first time ever, Norway announced plans to tap its fund to make up for lost oil revenues earlier this month. The country plans on withdrawing around $450 million from the fund which had $820 billion under management as of the end of June of this year………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

By 1 October 2015 the State Oil Fund of Azerbaijan (SOFAZ) exceeded the limit of investment portfolio (AZN 28.2 bn) for 2015 by 28.7%. The Fund reports that its investment portfolio in manats, as a base currency, grew by 26% from AZN 28.79 bn up to AZN 36.28 bn for the past 3 quarters. Over the 3 rd quarter the decline totaled AZN 1.176 bn or 3.1%. By 1 October the Fund’s investment portfolio was estimated at $34.6 bn.
The main directions (investment program) of SOFAZ money spending for 2015 are to pursue investment policy aimed at obtaining the highest possible income with minimum risk of losing assets. Fund’s investment portfolio for 2015 is limited to AZN 28.2 bn. The Fund is allowed the following currency structure: 50% of finances in US dollars, 35% in euro, 5% in pounds of sterling and the remaining 10% in other currencies………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Legal action taken against Bulgaria by the State General Reserve Fund of Oman is based on ill-founded claims, the country’s Finance Minister Vladislav Goranov said on Tuesday. He asserted Bulgaria was “prepared to fight this battle” and had already hired a team of lawyers.
His comments follow reports (later confirmed by the government) that the sovereign wealth fund was seeking to recover the book value of its investment in collapsed Corporate Commercial Bank (Corpbank or KTB)………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Oman’s biggest sovereign wealth fund has filed an arbitration claim against Bulgaria over the collapse of Corporate Commercial Bank (Corpbank), the online database of Washington-based International Centre for Settlement of Investment Disputes showed.
Oman’s State General Reserve Fund (SGRF) fund owned a 30 percent stake in Corpbank, which was Bulgaria’s fourth-largest lender before collapsing last year following a bank run. The bank collapse triggered the Balkan country’s biggest financial crisis since the 1990s, prompting Sofia to pay over 3.6 billion levs ($2.03 billion) to guaranteed depositors and boosting the country’s fiscal deficit for 2014 to 5.8 percent of economic output………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Saudi Arabia’s Public Investment Fund is seeking to hire bankers for international deals to help the kingdom acquire overseas technology and expertise, four people with knowledge of the matter said.
The sovereign wealth fund, which holds about $100 billion worth of stakes in local companies, is looking to appoint Saudi nationals with experience at both local and international investment banks, the people said, asking not to be identified as the talks are private. The hires will help the fund make strategic acquisitions in industries including transport, manufacturing and technology that will give Saudi Arabia access to foreign expertise and know-how, according to the people………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

The kingdom has financial reserves of about 100 per cent of GDP, but has sold foreign reserves and tapped local bond markets, while its sovereign wealth fund has sold assets in a bid to generate enough cash to plug the deficit.
Sama Foreign Holdings, the kingdom’s sovereign wealth fund, has sold up to $70 billion of assets as it seeks to plug the gap in spending, the Financial Times reported last month, while Nasdaq estimates that it has sold a further $1.8bn of its European equity holdings. Saudi Arabia is scheduled to offer $27bn in debt to local markets by the end of the year………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Saudi Arabian oil money appears to be ebbing out of global assets, including Japanese equities, amid a bear market for the kingdom’s top export.
J.P. Morgan estimates $100 billion in net selling of Saudi sovereign wealth investments so far in 2015, compared with $270 billion in net buying last year. Talk of trouble among presumed Saudi wealth fund holdings became more frequent among market watchers in late August………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Indian solar and wind energy company ReNew Power Ventures Pvt Ltd sold a “significant minority stake” to a subsidiary of Abu Dhabi Investment Authority (ADIA) for $200 million, the company said in a statement.
ADIA’s investment was part of a broader $265-million fundraising by new and existing investors in ReNew Power Ventures, it added. Financial adviser Rothschild advised the Abu Dhabi sovereign wealth fund………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Sovereign funds of Norway, Singapore and Kuwait are among the anchor investors who put money in InterGlobe Aviation Ltd, which runs India’s top air carrier IndiGo, on the eve of the firm opening its maiden public issue.
Norway’s Government Pension Fund Global, the world’s largest sovereign wealth fund; Singapore’s GIC, and Kuwait Investment Authority together put in Rs 113 crore ($17 million) as part of the Rs 832 crore that IndiGo raised through anchor investors. GIC and the Norwegian fund are two of the most active sovereign funds in Indian public equities………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Agri-trader Olam International has secured $1 billion in funding to refinance existing debt, just a couple of months after Mitsubishi Corp snagged a 20 percent stake in the company.
Olam said the new revolving credit and term loan facility will comprise an $850 million 364-day revolving credit facility and a $150 million 5-year term loan. Singapore state investor Temasek Holdings owns 51.4 percent of Olam………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Malaysia’s bonds are showing signs of stability, heating up the debate on when to pile back into Asia’s worst-performing debt. Malaysia’ corporate dollar-denominated notes have returned 1.5% this month, paring their losses for the year to 1.7%, the biggest on a JPMorgan Chase & Co index.
The cost of insuring the nation’s sovereign debt has fallen the most in four years in October, while the ringgit has rallied 3.2% after a decline of 20% in the first nine months………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Alberta will boost investment in schools, hospitals and transportation projects and run deficits in a bid to stimulate growth as it confronts a collapse of oil-sands revenue that threw the western Canadian province into recession.
Producers in the province exported C$1.3 trillion worth of oil and gas between 1971 and 2015, most of which has been used to pay for health care, schools and transportation infrastructure. The province’s Heritage wealth fund is currently valued at about C$15 billion, compared with $1.1 trillion for Norway’s sovereign wealth fund, which was established after Alberta’s………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

Gov. Bill Walker has invited Alaska business leaders here Thursday for a discussion of his final fiscal plan and the unveiling of his budget, and lawmakers will get their own briefing Wednesday on a “sovereign wealth fund concept.”
Walker’s administration has been working for months to create a plan to balance Alaska’s budget. This year the state is spending $5 billion while bringing in just $2.2 billion in revenue following a steep decline in the price of oil. Taxes and royalties from North Slope oil make up the majority of state revenue………………………………………..Full Article: Source

Posted on 28 October 2015 by VRS |  Email |Print

As a result of the oil price plunge, the major oil-exporting countries are facing budget deficits for the first time in years. The growth in the assets of their sovereign wealth funds, which were rising at a rapid rate until recently, is now slowing; some have started drawing on their buffers.
In the short run, this phenomenon is not cause for alarm. Most oil exporters have enough buffers to withstand a temporary drop in oil prices. But what will happen if low oil prices persist, and how will policymakers react?……………………………………….Full Article: Source

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