Date post: | 08-Aug-2015 |
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• SWF Role
• Geographic Allocation
• Global Ranking
• Political Risks
• Risk Assessment
SWF Role
• SWF role to restore of economic stability and investor confidence this trend driven by global growth of energy,commodity.
• the important role of diversification to lessen oil market volatility,achieve socioeconomic development,and foster political dominance.
• The rise of state capitalism to deepen the role of governemnts in financial monetary policy and its implications over SWF as a contributors in global rebalancing.
• SWF involved the rescue of global financial crises, For example, Singapore's Temasek Holdings bought a $5 billion stake in Merrill Lynch
SWF Allocation
• SWF assets are projected to surpass global foreign exchange reserves from SWF assets range from $12 trillion to $20 trillion by 2020.
• GCC owns around 1.8 Trillion equals %34 of global assets.
• The long-term investment horizon of SWFs makes them ideal of large infrastructure projects in Asia $8 trillion over the next ten years for infrastructure along with Africa and Latin America, has been a key destination for sovereign funds in recent years.
• Significant increase in equity investment %47 for long-term ROI advantage
SWF-GCC Global Ranking
Political Risks
• Confiscation:seizing of company assets
• Exproriation:partial seize of company assets from government
• Domestication:when host country transfer asset ownershipthrough series of government decrees
Risk Assessment
• GAPP organization purpose is to provide transparent governance structure through:
• Adequate operational controls, risk management and accountability.
• Ensures compliance with applicable regulatory requirements in the countries in which SWFs invest.
• Help maintain sustainable global financial system, free flow of capital and investment.
• Political risk can be measured by the Gov relationship with Foreign investor,its influence in decision making process and,the ability to transfer capital when required.