SWF Radar

Ashby Monk of OIR has published a Q&A with Christian Braun, creator of SWF Radar.

Among other things, Braun says that, “The fact that the launch of the IMF’s GAPP guidelines was pretty much ignored by the press does suggest, though, that the perception of SWFs as something threatening may have eased. It will be interesting to see what happens under the Obama administration, especially given that Lawrence Summers…helped kick off the present SWF debate.”

Reuters reports that, “Congress should…require [the China Investment Corporation] to disclose investments it is making in the United States, [the US-China Economic and Security Review Commission] said Thursday in its annual report…Larry Wortzel, chairman of [USCC said that] ‘…China has been using the funds to seek political and economic influence over other nations’…The clearest case of this was in January 2008, ‘when [China’s SAFE Investment] promised to purchase Costa Rican government bonds in return for Costa Rica’s severing of diplomatic ties with Taiwan,’ the report said.”

The US-China Economic and Security Review Commission report is available here.

RGE Monitor reports that, “If sovereign wealth funds were included, the world’s net losses, $US -139.8 billion, may be closer to zero because sovereign wealth funds are adding capital in spite of precipitously declining oil prices.”

Bloomberg reports that, “To help buffer falling foreign demand, the [Korean] government plans to revise legislation to allow its $24.8 billion sovereign wealth fund to invest in local stocks and bonds, the [Korean] finance ministry said yesterday.”

Bloomberg reports that, “California Public Employees’ Retirement System [CalPERS], the largest U.S. public pension fund, is back in the market for stakes in private-equity funds after selling $2 billion of partnerships earlier this year.”

Reuters reports that, “[General Electric] said on Thursday it has no intention of raising additional capital from sovereign-wealth funds. The company is in talks with Asian investment vehicles about possible joint ventures similar to a deal reached earlier this year with Abu Dhabi investment agency Mubadala Development Co, said GE spokesman Russell Wilkerson.”

Bloomberg reports that, “French President Nicolas Sarkozy said the government and a state-owned lender will raise 6 billion euros ($7.6 billion) to create a sovereign fund…The state will also endow the fund with 7 billion euros in minority stakes it already owns, including 15 percent in carmaker Renault SA and its holding in Air France-KLM Group.”

Trading Markets reports that, “Sources said that the capital China SAFE Investment Ltd., the biggest financial investment institution in China, used to buy shares of three listed state-owned commercial lenders was approaching CNY 10 billion [$1.46 billion]. The three listed state-owned banks are Industrial and Commercial Bank of China, China Construction Bank and Bank of China.”

CBC reports that, “The Alberta government needs to grow its Heritage Savings Trust Fund to $100 billion by 2030, according to a report released Wednesday that looks into ways the province can better save and invest its money.”

Reuters reports that, “President Nicolas Sarkozy vowed on Thursday to protect key companies from being swallowed up by the financial crisis as he launched a 20 billion euros ($25.05 billion) fund to help French industry….Sarkozy said the fund would be headed by Patricia Barbizet, an executive of Artemis, the holding company of billionaire investor Francois-Henri Pinault.”

Reuters reports that, “Norway’s $300 billion (£201.12 billion) sovereign wealth fund [Government Pension Fund–Global] will remain a big buyer of equities after raising its holdings to 1.25 percent of European stocks and about half that proportion in markets elsewhere, its chief said.”

AP reports that Dubai’s Nakheel is rethinking its staffing needs and the pace of its projects in light of the economic slowdown.

Bloomberg reports that, “General Electric Co., down 61 percent this year in New York, is seeking funds from China Investment [Corporation (CIC)], Government of Singapore Investment [Corporation (GIC)] and at least two other sovereign-wealth funds. Talks are also being held with Temasek Holdings Pte of Singapore and [China’s SAFE Investment Company].”

Reuters reports that, “Kuwait’s top banking lobby urged the government to buy up to 10 percent of the shares in its leading share index through a bailout fund, in a move worth $12.83 billion, a top banker said on Wednesday.”

Finance Asia reports that, “Barclays shareholders lap up $754 million worth of reserve capital instruments, but the outcome of a forthcoming vote on the investment by Abu Dhabi- and Qatar-based investors is still unclear.”

JOC reports that, “A DP World executive said the global financial crisis could convince port authorities in the United States to re-think their current model that limits marine terminal development to shipping lines and domestically-based investor groups.”

The National Business Review reports that, “The New Zealand Superannuation Fund will announce in December which investments it is pulling out because of their involvement in the manufacture of cluster bombs.”

The OIR SWF blog writes that, “[In the current financial crisis, if] SWFs were mainly interested in having a hand in Western economies for political leverage, they would be steadily buying shares in the many financial institutions that are currently up for grabs.”

RIA Novosti reports that, “Russia’s Reserve Fund declined by $3.34 billion [to $131.26 billion] and its National Prosperity Fund [also known as the National Wealth Fund] by $1.66 billion [to $61.16 billion] between November 1 and November 17, the finance minister [Alexei Kudrin] said on Wednesday.”

Reuters reports that, “Dubai has set up a committee to recommend ways to tackle the impact of the global financial crisis on the emirate’s economy….headed by Mohamed Alabbar, chairman of Emaar Properties.”

Reuters reports that, “Billed a year ago as saviours of Western capitalism, sovereign wealth funds now look as vulnerable to the credit crunch as anyone else and are witnessing a rapid downgrade to their growth outlook.”

CPI Financial reports that, “The weekly Kuwaiti cabinet meeting has asked the country’s sovereign wealth fund, the Kuwait Investment Authority (KIA) to set up a long-term investment portfolio in cooperation with other state agencies for investment in the Kuwait Stock Exchange (KSE).”

Gulf News reports that, “Dubai World is poised to take advantage of the global credit crisis to expand its presence around the world in hotel projects, especially in emerging markets, its chairman, Sultan Ahmad Bin Sulayem, told Gulf News in an exclusive interview.”

Thomson Reuters reports that, “The Financial Services Commission said last week state-run Korea Development Bank would contribute 2 trillion won [$1.4 billion] to the 10 trillion won ($6.9 billion) fund [to buy domestic bonds issued by local companies].”

Global Pensions reports that, “The Pension Benefit Guaranty Corporation (PBGC) overall deficit has been reduced by almost US$3bn, its annual management report reveals.”

Financial Times reports that, “Barclays was facing renewed shareholder anger in spite of moves aimed at heading off a revolt over its plans to raise more than £7bn in fresh capital from Middle Eastern investors…The bank is expected to win next week’s vote but the Association of British Insurers, representing more than a fifth of UK investors, issued a rare ‘red top’ alert, warning of a severe breach in good governance.”

Brad Setser writes that, “Sovereigns may have long time horizons, but they also have historically been very loss-adverse. China’s current flows suggest that it was reaching for yield in a host of markets back when the RMB was appreciating, and after getting burned it retreated from any kind of risk.”

Financial Times reports that, “Salem Abdelaziz Al-Sabah, the central bank governor, claims to have the Gulf Bank problem ‘under control’…But, other than deploying the Kuwait Investment Authority, the country’s sovereign wealth fund, the government has not made public what is being done or the sums involved.”

Reuters reports that, “China’s Chinalco and the Bank of China have agreed on a $2 billion loan to develop the Toromocho copper project in Peru, a Peruvian government official said Tuesday.”

Paul Taylor writes for Reuters that, “Anyone who expected the major emerging economies to write fat checks in exchange for being invited to the first G20 leaders’ summit on rescuing the world economy will have been disappointed.”

Bloomberg reports that, “The “Dubai dream” may be over because lower oil prices will leave smaller fiscal surpluses among its crude-exporting neighbors to invest in the emirate, said Citigroup Inc. ‘We believe it is safe to say the Dubai dream is perhaps over,’ Citigroup economist Mushtaq Khan said.”

Trade Arabia reports that, “Bahrain holding company Mumtalakat will sell stakes in some of its companies, according to a media report…The companies include Aluminum Bahrain (Alba), Bahrain Airport Company, Bahrain International Circuit, Gulf Air, Al-Awali Real Estate Company and Arab Shipbuilding and Repair Yard (Asry).”

AME Info reports that, “Dubailand is expected to play a key role in helping Dubai achieve its goal of attracting 15 million tourists a year by 2015, but the development is facing a number of challenges that are impacting the scope and delivery of the project.”

China Petrochemical Corp [Sinopec] yesterday said the [Chinese] government’s stimulus package will help its business and the company may seek to acquire resources assets overseas amid the financial turmoil.

Financial Times reports that, “Barclays on Tuesday bowed to pressure from some of its largest institutional shareholders by changing the terms of its £7bn capital raising so that investors can participate in the issue of a security paying a 14 per cent coupon. The UK bank also said it would put its entire board up for re-election at its annual meeting next April, ‘in recognition of the extraordinary circumstances of the capital raising’.”

Bloomberg has more.

Oxford Analytica reports that, “Abu Dhabi is well placed to ride out the crisis…Dubai, on the other hand, is highly vulnerable.”

Pocket Part, an online companion to the Yale Law Journal, has published a symposium on legal issues surrounding SWFs. The three articles in the symposium are:

Foreign Direct Investment by Sovereign Wealth Funds (link)
Should We Tax Sovereign Wealth Funds? (link)
Taxing the Bandit Kings (link)

Financial Times reports that, “A third voting adviser [Pirc] has added its weight to the row between Barclays and its shareholders over the bank’s proposals to raise fresh capital from Middle Eastern investors.”

The Standard reports that, “[Bank of America] said it will exercise its call option to purchase 19.58 billion more H shares [worth US $7.08 billion] of China Construction Bank from state-owned China SAFE [Investment], formerly known as Central Huijin Investment.”

FIN Alternatives reports that, “[California Public Employees Retirement System (CalPERS), the] nation’s biggest public pension fund has made commitments to a few private equity and hedge funds, while redeeming from a few others. CalPERS has committed US$234 million to Candover 2008 Fund, which will make control investments primarily in European mid- to large-cap companies, according to an internal memo.”