Monday 20th October 2014
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MONDAY TICKER: OCTOBER 20th 2014: Morgan Stanley’s third quarter earnings beat analysts’ estimates today, with strong equity sales and improved results across its fixed income and commodities trading. The New York-based bank reported a third quarter net income $1.71bn, or 84 cents a share, up from $906m, or 45 cents, a year earlier - China business sentiment slipped for the second consecutive month in October, falling to an eight month low, amid calls for the Chinese authorities to do more to boost growth - The Depository Trust and Clearing Corporation (DTCC) and other market participants have formed an industry steering committee and an industry working group to facilitate the move to shorten the settlement cycle in the US for trades in equities, corporate and municipal bonds, and unit investment trusts (UITs) - Old Mutual’s wealth management operation has reached deal to acquire UK investment manager Quilter Cheviot for £585m - Northern Trust has opened a representative office in Seoul, South Korea, following regulatory approval from the Financial Services Commission (FSC) - KfW IPEX-Bank is supporting a large-scale innovation project in Europe with a loan of €75m. Within the framework of a multi-year investment programme, the international chemical group Borealis is pursuing research and development of plastics raw materials at its facilities in Linz, Porvoo (Finland) und Stenungsund (Sweden) - The Bank of Russia will start providing the market with dollars and euros at weekly foreign-exchange repo auctions in late October to smooth out the ruble rate volatility, the central bank said today. The central bank says it will provide up to $50bn to the banking sector by end-2016 in a move aimed at fulfilling demand for foreign currencies at a time when external borrowing markets are effectively closed to Russian companies and lenders due to Western sanctions. The ruble, recently driven to all-time lows by falling oil prices and domestic demand for hard currency, recovered to around RUB45.9 against the euro-dollar basket from levels of RUB46 seen before the central bank's statement.

Sovereign wealth funds move to real estate investments

Monday, 11 March 2013
Sovereign wealth funds move to real estate investments Sovereign wealth funds around the world are moving to diversify their portfolios, according to TheCityUK’s Sovereign Wealth Funds 2013 report, with deal transaction sizes getting smaller and emerging markets accounting for a growing share of investments.  http://www.ftseglobalmarkets.com/

Sovereign wealth funds around the world are moving to diversify their portfolios, according to TheCityUK’s Sovereign Wealth Funds 2013 report, with deal transaction sizes getting smaller and emerging markets accounting for a growing share of investments. 

The trend towards diversification has resulted in a 30% increase in investment into real estate globally by SWFs over the past twelve months, with information technology and consumer goods also seeing rises in allocation. The allocation increase is largely down to low bond yields in some developed countries and the volatility in equity markets.

The UK, particularly London, has benefited from SWFs’ increased allocation to real estate. Recent transactions include China Investment Corporation’s £245m purchase of Winchester House, the London headquarters of Deutsche Bank.  Gingko Tree Investment, part of China’s State Administration of Foreign Exchange, has also invested more than $1.6bn in at least four deals including water utility, student housing, and office buildings in London and Manchester.



Other funds which have made real-estate investments in London during 2012 include The Korea Investment Corporation, the State Oil Fund of the Republic of Azerbaijan and Norway’s Government Pension Fund Global.

TheCityUK’s report also found that overall direct investments by SWFs dropped to a six-year low of $57bn globally in 2012. This was down more than a third on 2011 and 46% below the peak level of activity three years earlier, as SWFs focused more on their domestic markets. However, investments picked up in the fourth quarter of the year.

Chris Cummings, chief executive of TheCityUK, says the increased investment in property by SWFs is a blessing for London, which is a prime real estate location and seen as a safe haven market for investors.

“The UK is a leading destination for SWF investments, accounting for one sixth of global investments since 2005, second only to the US, and attracting more capital than France, Germany and Spain combined,” explains Cummings. “These investments bring numerous benefits to the UK economy, including new jobs and capital for vital infrastructure projects.

“But the UK is also an important centre for the SWF industry as a clearing house for transactions and a location from where funds are managed. Our strong position stems from the structural strengths associated with the cluster of financial and related professional services firms, broad skills base, open market and pivotal international position of English law.”

TheCityUK’s report revealed that global SWF assets under management increased for the fourth year running in 2012, hitting a record $5.2tn, due to growth in existing assets as well as the launch of a number of new funds during the year. TheCityUK’s projections are for total global SWF assets to grow to $5.6tn by the end of 2013.

There was an additional $7.7tn held in other sovereign investment vehicles, such as pension reserve funds, development funds and state-owned corporations' funds, and $8.4tn in other official foreign exchange reserves.

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