Gulf to increase foreign assets 14%
The Gulf is set for economic growth and accumulation of financial reserves in 2013 says the Institute of International Finance.
Sound familiar? Well that’s because most macroeconomic forecasts make similarly rosy forecasts for the oil-rich region. But the IIF, the world bankers’ club, warns that the good times may not last – and the region’s governments need to pursue economic reform before the outlook changes. Continue reading »
China’s CIC: change of the guard
There is a new man at the top of the China Investment Corporation (CIC), China’s sovereign wealth fund, prompting debate about whether the change in personnel will also mean a change in approach.
Lou Jiwei (pictured), who is still listed in CIC’s website as chairman and chief executive officer, became China’s finance minister in March. His successor has not been formally named but it has been locally reported that he is Tu Guangshao, the executive vice mayor of Shanghai. Continue reading »
Baku takes punt on Asian property
As the guardian of the nation’s oil windfall, Azerbaijan’s state oil fund has traditionally been a highly conservative investor. But as the global economic slowdown takes the shine off fixed income instruments, Sofaz has embarked on a quest for higher yields. After a first foray into gold and European luxury real estate last year, the fund is sizing up the property market in southeast Asia. Continue reading »
Ousted head of Libyan Investment Authority speaks out
The departing chairman and chief executive of the Libyan Investment Authority has said he was about to appoint lawyers to seek compensation from banks including Société Générale and Goldman Sachs – banks he has accused in the past of causing losses worth billions of dollars.
In a wide-ranging interview published in Euromoney magazine, Mohsen Derregia (pictured), who is being ousted from the LIA after just 11 months in the top job, speaks passionately about his removal – which he is challenging – and the importance of the approximately $60bn sovereign fund. Continue reading »
China’s CIC and the Moscow Exchange: benign bonhomie?
The investment by China Investment Corporation in Friday’s flotation of the Moscow Exchange carries several messages for observers seeking to understand the investment approach of China’s sovereign wealth fund. Continue reading »
Angola joins the SWF club
Forget sovereign debt for a moment. This is turning into the year of sovereign wealth, with Angola becoming the latest African country to create a fund to invest some of the proceeds of growing oil riches.
The sovereign wealth fund – known as Fundo Soberano de Angola (FSDEA) – will start with $5bn in assets, and look to invest primarily in sub-Saharan Africa. Angola joins Nigeria and Tanzania in launching or planning to launch a SWF in 2012. Continue reading »
Chile: a lot like Russia
Here’s something you don’t hear very often: Chile and Russia are quite similar.
Odd as that might sound – after all, Chile conjures up images of success, stability and transparency while Russia has, as Ben Aris of bne put it in a post here recently, an “appalling investment image” – that was indeed Michael O’Flynn’s pitch to Chilean investors at a recent conference in Santiago. Continue reading »
Nigeria’s SWF: to be or not to be?
It’s a big day on Tuesday for investment banker Uche Orji and, potentially, for Nigeria’s future fiscal stability, too. Orji, who has worked at JP Morgan, Goldman Sachs and most recently UBS, in New York, starts on Tuesday as CEO of the Nigerian Sovereign Investment Authority.
His job will be to establish and manage the country’s proposed $1bn sovereign wealth fund, which is meant to safeguard some oil revenue for later use. Given the many billions of petrodollars squandered or stolen by senior officials in recent decades, few dispute that the SWF is a good idea. But it has not been welcomed by all. Continue reading »
Tanzania: time for a SWF
Impeccable timing. That’s the only phrase that can describe this week’s announcement that Tanzania is to set up a sovereign wealth fund – just hours before another significant gas discovery was unveiled.
Sovereign wealth funds have been used by countries such as Norway, China and Libya as a way of putting excess reserves to better use than sitting in government coffers. Now, with oil and gas finds building up, several countries in sub-Saharan Africa are looking to set up SWFs as well. Continue reading »
Chart of the week: why are SWFs less keen on emerging market FDI?
Foreign direct investment is on the way back. According to the World Investment Report 2012 by the United Nations Conference on Trade and Development, global FDI flows exceeded the pre-crisis average in 2011, reaching $1.5tn despite the tricky world economy, but still 23 per cent shy of the 2007 peak.
One group of investors that are increasing their FDI portfolios is sovereign wealth funds. Yet they seem to be more interested in investing in developed rather than emerging markets. Are they missing an opportunity? Chart of the week takes a look. Continue reading »
1MDB of Malaysia’s $1.75bn bond: one puzzle wrapped up in another
The ingredients were always going to be interesting…
When 1MDB issued what has been touted as Asia’s biggest sole-led dollar-bond sale ex-Japan in May, it almost slipped under the radar. The issue was never meant to be made public but somehow it flicked up on bankers’ screens, sparking caustic commentary. Part of that, no doubt, was sour grapes. But some intriguing questions remain unanswered. Continue reading »
[Chart] EM SWFs: the old world’s newest last resort?
Investors have lost their appetite for IPOs. Banks are unwilling to lend. But for some sovereign wealth funds, there is hardly a crisis at all.
The Qatar Investment Authority recently bought significant stakes in high-profile companies such as Shell and Tiffany’s and is eyeing a 10 per cent stake in mining company Xstrata. The China Investment Corporation recently launched a €5oom SME investment fund in Europe and is looking for opportunities in emerging Europe and Africa. How come emerging market SWFs are so active in an otherwise depressed financial world? Continue reading »
CIC’s Jin on eurozone: time for a little Thatcher work ethic
Picture: Bloomberg
As markets wait once again for European leaders to bring the eurozone crisis back from the brink, there is one man who is more than happy to lend some advice: Jin Liqun.
What he thinks about Europe carries weight because the institution he chairs, China Investment Corporation, is one of the world’s most important sovereign wealth funds. Continue reading »
Azerbaijan: going for gold
Azerbaijan traditionally plays safe with its oil windfall, buying mainly US bonds and treasury bills. But now the country is following a trend set by other sovereign wealth funds, and investing more adventurously in gold, real estate and private equities.
A lot of money is at stake. The state oil fund of Azerbaijan has accumulated more than $29bn since its foundation in 1999 as a storehouse for the country’s oil export revenues and earnings from transit pipeline fees. Continue reading »
Qatar: putting $1bn into the African infrastructure pot
If you were a sovereign wealth fund where would you invest your money? How about Africa? And more exactly: infrastructure in Africa.
That at least is where Qatar’s sovereign wealth fund is putting its money. On Thursday it agreed to plough $1bn into a 50-50 joint venture with Morocco to help the north African country fund major development projects, Reuters reported. Continue reading »
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