Posted by AJ on February 2, 2008
Some recent articles of interest:
- Bond crisis: Sovereign funds hold their bets (Fortune)
- US Treasury’s Kimmitt stresses benefit of commercially-based SWFs (CNBC)
- OPEC rebuffs call for increase in output (Financial Times)
- IMF’s proposed sovereign wealth fund code ruffles feathers (Bretton Wood’s Project)
- China Investment-Fund Head Says Focus Is on ‘Portfolios’ (Wall Street Journal)
- State-led globalization (RGE Monitor)
- Libya Sovereign Wealth Fund to Shun U.S. (Bloomberg)
- Market convulsions will lead to the return of the state as a major economic force (The Independent)
- Japan’s Nukaga: No plan for sovereign wealth fund (Reuters)
- Ask the Author: A World Without Islam (Foreign Policy)
- The ‘war on terror’ licenses a new stupidity in geopolitics (Guardian Unlimited)
- A Risk Index for Sovereign Wealth Funds (Breaking Views)
- After Iraq: A report from the new Middle East—and a glimpse of its possible future (The Atlantic)
- If $28 Trillion Comes Knocking, Open the Door (Bloomberg)
- Can Emerging Markets Avert U.S. Chill? (Wall Street Journal)
- (Stephen) Roach Says He’s `Optimistic’ on Asian Growth (Bloomberg)
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Posted in China, Links, Middle East, Oil, Sovereign Wealth Funds, Subprime crisis | Leave a Comment »
Posted by AJ on January 23, 2008
US backlash to recent investments by sovereign wealth funds
Citigroup and Merrill Lynch are viewed more negatively by the American public on the heels of investments each firm accepted from SWFs (Financial Times):
Citigroup and Merrill Lynch’s standing among US citizens has plummeted as a result of multi-billion dollar capital injections by sovereign wealth funds, according to new research that highlights simmering public opposition to investments by foreign governments.
Over half of the 1,000 people polled by the market research group Strategy One said they “trusted Citigroup less” after its recent decision to tap Middle Eastern and Asian sovereign funds to ease its financial constraints.
In Merrill’s case, 45 per cent of the respondents said their trust in the bank had fallen since hearing of investments from foreign state funds, according to the research to be published on Tuesday.
The poll draws attention to the rising protectionist sentiment among the American public, which is in part being stoked by politicians like Hillary Clinton:
The new research – carried out early this month between the two waves of foreign investments in Citigroup and Merrill – also points to an underlying current of protectionism within the US public, which could be exacerbated by the rising threat of a recession.
“The Citigroup figure is staggering,” said Laurence Evans, president of Strategy One, which is owned by the public relations group Edelman.
“There is a xenophobic element to it. The biggest concern is uncertainty: people don’t know how much influence sovereign wealth funds will have.”
Gulf response to US rate cut
Gulf central banks, whose currencies are pegged to the US dollar, have decided to follow the US Federal Reserve’s 75 basis point interest rate cut with reductions of their own (Arabian Business News):
“The Gulf will have to match the Fed cut,” said Marios Maratheftis, regional head of research at Standard Chartered Bank. “This is going to create even more liquidity in the market which means more inflationary pressures.” Inflation in four of the six Gulf Arab oil producers has overtaken official lending rates, encouraging borrowing for investment in assets such as real estate, which is the main driver of the surging cost of living across the region.
Gulf Cooperation Council (GCC) central banks say that they remain committed to the dollar peg for now, but will leave the door open for coordinated currency revaluations in the future, to tackle rising inflation.
China in no hurry to buy credit crunch bargains
China is taking a more cautious approach to making investments on the belief that the worst of the subprime crisis is still yet to come (Reuters):
Beijing’s reluctance to buy into Citigroup coincides with growing expressions of concern by Chinese officials about the seriousness of the credit crisis. “The subprime loan issue has planted a ticking timebomb in the global financial markets. It now seems the impact is much more serious than the market had previously expected. I don’t think it will be over any time soon,” Vice-Finance Minister Li Yong said at a recent forum.
Abu Dhabi announces $15 billion clean energy fund, world’s first carbon neutral city
Abu Dhabi decides to invest in the energy technologies of the future (BBC):
The government of Abu Dhabi has announced a $15bn initiative to develop clean energy technologies. The Gulf state describes the five-year initiative as “the most ambitious sustainability project ever launched by a government:”. Components will include the world’s largest hydrogen power plant. The government has also announced plans for a “sustainable city”, housing about 50,000 people, that will produce no greenhouse gases and contain no cars.
Posted in Abu Dhabi, China, Citigroup, Gulf Cooperation Council, Kuwait, Merrill Lynch, Middle East, Morgan Stanley, News Roundup, Qatar, Saudi Arabia, Sovereign Wealth Funds, Subprime crisis, Temasek, US politics | Comments Off
Posted by AJ on January 20, 2008
Posted in Abu Dhabi, China, Globalization, Gulf Cooperation Council, Iran, Links, Middle East, Oil, Saudi Arabia, Sovereign Wealth Funds, Subprime crisis, US politics | Comments Off
