SOVEREIGN WEALTH FUNDS A great opportunity for the global financial world but a potential threat for both host country and home country By Thierry KAME BABILLA
Sovereign wealth funds are among the most important players in global financial market, because of their increasing size and number. Both the global financial crisis and oil price crisis have confirmed this prominent status due to the resilience of
sovereign wealth funds against these crises. Nevertheless, sovereign wealth funds recently caught the attention of many experts because of the shifting of their features from riskless assets and debts instrument to more risk-return profile assets.
The document discusses the global financial crisis and proposes Islamic finance as a solution. It provides background on the causes of the crisis, including risky mortgage products and loose lending practices. It then outlines several principles of Islamic finance, such as prohibitions on usury and speculation, that could have helped avoid the crisis. The finance minister of Bahrain is quoted saying that adhering to Islamic rules helped the country avoid riskier assets and weather the recession well. The conclusion argues that Islamic finance principles of linking finance to real economic activity could help reduce debt and speculation and promote stability.
1. The document discusses sovereign wealth funds (SWF), their evolution, composition, and impact on workers in the European Union.
2. It provides background on major SWFs such as those from China, United Arab Emirates, Norway, and Singapore. Commodity-based funds tend to come from oil-exporting nations while non-commodity funds come mostly from Asian export surpluses.
3. Recent SWF activity has included investments in the financial sector during the 2008 crisis, as well as real estate and retail sectors according to the example of Singapore SWF activity from 2005 to 2008.
11.islamic banking a study of the relevant operating modes in current financi...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic banking a study of the relevant operating modes in current financial ...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
The document discusses Islamic finance and its potential to support global trade, particularly intra-OIC trade. It outlines trends in global and intra-OIC trade, the importance of trade finance for intra-OIC trade and SMEs, examples of Islamic trade finance solutions, and recommendations to further develop Islamic trade finance including innovating new solutions and providing regulatory incentives for Islamic banks. The author proposes an innovative mechanism using sukuk (Islamic bonds) and trade-based special drawing rights to enhance multilateral payments and intra-OIC trade.
Islamic Project Finance in Saudi Arabiafinancedude
1) The article discusses the $5.8 billion financing for the $9.9 billion Petro-Rabigh project in Saudi Arabia, which included a $600 million Islamic financing tranche. This represented the first use of Islamic financing in a multi-sourced project financing in Saudi Arabia.
2) The Islamic financing structure was based on an Istisna'a (procurement agreement) and Ijara (lease), combining structures used successfully elsewhere in the Gulf. However, there was skepticism that these could work in Saudi Arabia due to legal/regulatory differences.
3) With support from Saudi authorities, a key change was allowing a "special purpose company" to enable the Islamic structure. This case
The document is the October 2015 issue of the Institute of Finance & Management's monthly newsletter. It provides information on upcoming events being held by IFM, including a certified Islamic arbitrator course in November and credit rating workshops in Bahrain and Dubai in December. It also summarizes the launch of the first Takaful report and Islamic Finance encyclopedia and directory in Arabic by ACRIE and its partners to further knowledge and awareness of Islamic finance concepts and products.
The document discusses the global financial crisis and proposes Islamic finance as a solution. It provides background on the causes of the crisis, including risky mortgage products and loose lending practices. It then outlines several principles of Islamic finance, such as prohibitions on usury and speculation, that could have helped avoid the crisis. The finance minister of Bahrain is quoted saying that adhering to Islamic rules helped the country avoid riskier assets and weather the recession well. The conclusion argues that Islamic finance principles of linking finance to real economic activity could help reduce debt and speculation and promote stability.
1. The document discusses sovereign wealth funds (SWF), their evolution, composition, and impact on workers in the European Union.
2. It provides background on major SWFs such as those from China, United Arab Emirates, Norway, and Singapore. Commodity-based funds tend to come from oil-exporting nations while non-commodity funds come mostly from Asian export surpluses.
3. Recent SWF activity has included investments in the financial sector during the 2008 crisis, as well as real estate and retail sectors according to the example of Singapore SWF activity from 2005 to 2008.
11.islamic banking a study of the relevant operating modes in current financi...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
Islamic banking a study of the relevant operating modes in current financial ...Alexander Decker
This document summarizes the history and operating modes of Islamic banking. It discusses:
1) Islamic banking emerged in the 1960s/70s as an alternative to interest-based banking guided by Islamic principles. Currently there are over 300 Islamic banks worldwide.
2) The main operating modes of Islamic banking include profit and loss sharing (mudarabah), equity partnerships (musharakah), and fixed-return contracts like murabaha (cost-plus sale).
3) Murabaha contract allows banks to purchase goods for clients and sell them at a markup, functioning as a financing mechanism while avoiding interest. It has become widely used in practice.
The document discusses Islamic finance and its potential to support global trade, particularly intra-OIC trade. It outlines trends in global and intra-OIC trade, the importance of trade finance for intra-OIC trade and SMEs, examples of Islamic trade finance solutions, and recommendations to further develop Islamic trade finance including innovating new solutions and providing regulatory incentives for Islamic banks. The author proposes an innovative mechanism using sukuk (Islamic bonds) and trade-based special drawing rights to enhance multilateral payments and intra-OIC trade.
Islamic Project Finance in Saudi Arabiafinancedude
1) The article discusses the $5.8 billion financing for the $9.9 billion Petro-Rabigh project in Saudi Arabia, which included a $600 million Islamic financing tranche. This represented the first use of Islamic financing in a multi-sourced project financing in Saudi Arabia.
2) The Islamic financing structure was based on an Istisna'a (procurement agreement) and Ijara (lease), combining structures used successfully elsewhere in the Gulf. However, there was skepticism that these could work in Saudi Arabia due to legal/regulatory differences.
3) With support from Saudi authorities, a key change was allowing a "special purpose company" to enable the Islamic structure. This case
The document is the October 2015 issue of the Institute of Finance & Management's monthly newsletter. It provides information on upcoming events being held by IFM, including a certified Islamic arbitrator course in November and credit rating workshops in Bahrain and Dubai in December. It also summarizes the launch of the first Takaful report and Islamic Finance encyclopedia and directory in Arabic by ACRIE and its partners to further knowledge and awareness of Islamic finance concepts and products.
International financial institutions notesWarui Maina
The document summarizes the establishment and functions of several international financial institutions. It discusses how the International Monetary Fund (IMF) and World Bank were established at Bretton Woods in 1944 to promote global monetary cooperation and economic development after World War II. It also describes the roles of the IMF in managing exchange rates and providing temporary loans to countries, and the World Bank in providing long-term development loans. Additionally, it outlines other institutions like the International Finance Corporation (IFC) and rise of Eurocurrency markets.
Islamic Finance : Research Directions for Young ResearchersMahmoud Sami Nabi
This document summarizes a presentation on future research directions for young researchers in Islamic finance. It provides an overview of the growth of the Islamic financial services industry, particularly in banking assets, sukuk issuances, takaful contributions, and Islamic funds. It then discusses potential areas for future research, including ensuring Islamic finance develops in accordance with its distinguishing principles of risk sharing, ethics, and connection to the real economy. Examples are given of deviations in Islamic bank practices from theoretical models. The role of international institutions and lessons from other countries' experiences are also addressed.
VinaCapital is a leading asset management, investment banking, and real estate consulting firm in Vietnam. It has over $1.8 billion in assets under management across four funds: VinaCapital Vietnam Opportunity Fund, VinaLand Limited, Vietnam Infrastructure Limited, and DFJ VinaCapital LP. VinaCapital strives to identify key trends and opportunities in Vietnam as the country continues to develop, with the goal of producing superior returns for investors.
This document summarizes an Islamic finance presentation on emerging opportunities for Islamic ship financing. It outlines the concepts of Islamic finance, including a prohibition on interest (riba) and a focus on profit and loss sharing. It discusses the progress of Islamic banking, current market size, and recent deals in Islamic ship financing. Structures for Islamic ship financing include existing vessel financing using an ijara (lease) structure and newbuild vessel financing using an istisna'a (procurement contract) structure. Case studies of recent Islamic ship financing deals are also presented.
Islamic Finance and Economic Growth in the Kingdom of Saudi Arabia (KSA): An ...scmsnoida5
This paper examines the relationship between
the development of Islamic finance system and
economic growth in the Kingdom of Saudi
Arabia. The relationship between Islamic
banking and economic growth is done using
econometric analysis. In this analysis, we use
Islamic banks’ financing credited to private
sector through modes of financing as a proxy for
the development of Islamic finance system and
Gross Domestic Product (GDP), Gross Fixed
Capital Formation (GFCF) and Foreign Direct
Investment inflow (FDI) as proxies for real
economic growth. For the analysis, the unit root
test, co-integration test and Granger causality
tests were done. Based on the availability of data,
time series data from 1990 to 2010 is used to
examine the relationship between Islamic banks’
financing and GDP, FDI, and GFCF. Data for
all variables are stationary after first difference.
The co-integration results provide an evidence of
a unique cointegrating vector. In other words, there is a long-term stable relationship between
Islamic banks’ financing and economic growth
in the Kingdom of Saudi Arabia. That means
Islamic banks’ financing and economic growth
relationships are moving together in the longrun.
The results from causality tests show that causality
relation exist from the Islamic banks’ financing
to investment and Foreign Direct Investment
(FDI) of the Kingdom of Saudi Arabia. The
results indicate that Islamic finance is a suitable
environment for attracting FDI and FDI
reinforces economic growth.
The document provides an overview of the global Islamic asset management sector. It finds that while the number of Islamic funds has significantly increased over the past five years, assets under management have grown only marginally and remain a small fraction of total Islamic finance assets. Malaysia, Saudi Arabia, and Luxembourg collectively host 71% of global Islamic funds. Sukuk funds outperformed benchmarks after the 2008 crisis but have struggled more recently. Achieving scale remains a key challenge for the industry.
This document summarizes the development of Islamic finance in the Gulf Cooperation Council (GCC) states. It finds that the GCC collectively accounts for over 40% of global shariah-compliant financial assets, led by Saudi Arabia, Kuwait, UAE, Bahrain, and Qatar. Government policy has generally facilitated Islamic finance's expansion through legislation and regulation, though some GCC states were initially cautious. The banking sector has grown rapidly, offering deposits, financing for trade, real estate, and consumer credit. Sukuk issuance and financial centers have also contributed to the industry's growth, with Bahrain emerging as a major Islamic finance hub. Overall, the GCC states have played a leading role in the global development of Islamic
The document discusses Islamic finance and its growth. It provides details about a conference held by the National Bureau of Asian Research on Islamic finance in Southeast Asia. It summarizes the opening and closing keynote addresses which discussed linking Asia and the Middle East through sukuk markets, building a financial architecture through research, and managing regulatory challenges. The document also provides background on Islamic financial principles and the opportunities it provides through interregional linkages and new investment opportunities.
Islamic finance has grown rapidly in recent decades and become a significant part of the global financial system, with estimated assets exceeding $1 trillion. There are two main models of Islamic finance - the Arab model which originated in the 1970s focused on asset management, while the Malaysian model emphasized generating financing. Malaysia in particular has been innovative in developing sharia-compliant financial instruments and a dual banking system. For Islamic finance to be economically sustainable, it must continue to interface productively with conventional finance by creating positive synergies rather than assuming competition between the systems.
The global Islamic finance industry has grown rapidly over the past decade and now manages over $1 trillion in assets. Several factors are driving continued growth, including increased capital from Muslim-majority countries, the rise of Islamic multinationals, and growing retail demand. While the industry has potential to tap into the large Muslim population worldwide, it still needs to educate customers and differentiate itself more from conventional finance. Regulatory challenges and a lack of skilled professionals could hamper further expansion.
MENA SUKUK: Untapped Potential - Adnan HalawiAdnan Halawi
Sukuk issuance grew significantly between 2006 and 2012 but plunged in 2013 due to hints from the US Federal Reserve that it may taper its stimulus program. MENA accounted for a declining share of global sukuk issuance over this period. Saudi Arabia has emerged as the second largest global issuer of sukuk in 2013. Factors such as global interest rates, sukuk ratings, and liquidity issues still influence the pricing gap between sukuk and conventional bonds. The sukuk market is expected to see continued growth in issuance to help close the demand-supply gap, which some estimates say may be eliminated by 2018.
This document provides an overview of the growth and current state of Islamic finance. Key points include:
1) Islamic finance has grown significantly in recent decades, fueled by rising oil revenues in Gulf nations that have increased liquidity and investment.
2) Acceptance of Islamic finance is also growing beyond predominantly Muslim regions as its principles of risk-sharing and asset-backed investments appeal to more investors.
3) Countries like Malaysia have been pioneers in developing Islamic finance through regulatory frameworks and educational institutions to establish themselves as hubs for the industry.
This document summarizes the Islamic finance education landscape and developments in 2016. It finds that while the Islamic finance industry is growing, there is a shortage of qualified human resources which poses a risk. In 2016, several developments aimed to address this, including new Islamic finance centers in Pakistan backed by the UK, and a partnership between the BIBF and University of Bolton for an MBA program. Online education is growing, with initiatives launched by organizations like IDB's IRTI on edX and IFSB's new e-learning portal. Looking to 2017, online learning is expected to continue growing, which will benefit Islamic finance education and the industry overall.
The IMF is an intergovernmental organization established in 1945 to promote international monetary cooperation and stability. It aims to foster global economic growth, stability, reduce poverty, and provide financing to countries facing economic difficulties. The IMF gets its money through member country quota subscriptions and arrangements with other governments and banks. It has 189 member countries and works to establish a framework for managing international monetary systems and balance of payment problems.
The document provides an overview of the Islamic finance industry. It discusses the history and origins of Islamic finance, the key players and geographic clusters, major products and deals, and current trends. The global Islamic finance market is growing rapidly at 10-15% annually and has reached $265 billion in assets, though there remains a need for standardization and professional training to further develop the industry.
Trust Fund: A Product Combining Waqf, Zakah and Sadaqah for Socio-Economic A...Islamic_Finance
This paper introduces Waqf, Zakah and Sadaqah, which are currently being mobilised by the non-Financial Institutions (non-FIs) such as charitable organisations and Non-Governmental Organisations (NGOs) as additional components of Islamic finance industry, to complement the efforts of financial intermediaries as a contributor to key socio-economic development. The paper presents various aspects of a case study regarding the use of Trust Fund Instrument by the Islamic Development Bank (IDB) for socio-economic development in its member countries including a project run with the co-operation of Bill & Melinda Gates Foundation (Gates Foundation) for polio eradication in Pakistan as part of the Global Polio Eradication Initiative (GPEI).
This document provides information about the Global Islamic Finance Report 2021 (GIFR 2021), including its production partners, sponsors, editorial team, and table of contents. Specifically, it notes that GIFR 2021 is a joint publication between the Cambridge Institute of Islamic Finance and Ajman University Center for Excellence in Islamic Finance. It also lists the organizations and individuals that contributed to and supported the report. The document concludes by outlining the various chapters that will be included in GIFR 2021, focusing on the role of Islamic finance in a post-COVID world.
This document provides an introduction to bullion trading in India through Harvest Futures Consultants India Pvt Limited. It discusses Harvest's vision, services, regulatory compliance, and offices worldwide. It also covers topics like how the global bullion market works, factors that influence commodity prices, technical analysis techniques, account security, and the steps to start trading forex. Risks are addressed, and qualifications for different levels of traders are outlined.
This SlideShare provides a brief overview of what are Sovereign Wealth Funds, classifications, and top SWFs globally. In recent years SWFs have shown interest in VC-backed deals, with a growing trend in technology and life sciences. SWFs can be a force for positive change: the amount of money in an SWF is usually substantial, allowing them to contribute towards a country’s long-term growth by means of long-term investments in life sciences innovations.
This document discusses the role of sovereign wealth funds (SWFs). It begins by categorizing SWFs into stabilization funds, savings funds, reserve investment corporations, development funds, and pension reserve funds. It then examines the purposes of SWFs, noting they can be used to manage commodity revenue volatility, save for future generations, or pursue higher investment returns. The size and growth of SWFs is also analyzed. Newly established SWFs are mentioned. The document reviews literature on SWFs and responsible investing, national development objectives, and their potential destabilizing effects. It finds evidence SWF investment impacts can differ based on the SWF's objectives and investment timeframe.
International financial institutions notesWarui Maina
The document summarizes the establishment and functions of several international financial institutions. It discusses how the International Monetary Fund (IMF) and World Bank were established at Bretton Woods in 1944 to promote global monetary cooperation and economic development after World War II. It also describes the roles of the IMF in managing exchange rates and providing temporary loans to countries, and the World Bank in providing long-term development loans. Additionally, it outlines other institutions like the International Finance Corporation (IFC) and rise of Eurocurrency markets.
Islamic Finance : Research Directions for Young ResearchersMahmoud Sami Nabi
This document summarizes a presentation on future research directions for young researchers in Islamic finance. It provides an overview of the growth of the Islamic financial services industry, particularly in banking assets, sukuk issuances, takaful contributions, and Islamic funds. It then discusses potential areas for future research, including ensuring Islamic finance develops in accordance with its distinguishing principles of risk sharing, ethics, and connection to the real economy. Examples are given of deviations in Islamic bank practices from theoretical models. The role of international institutions and lessons from other countries' experiences are also addressed.
VinaCapital is a leading asset management, investment banking, and real estate consulting firm in Vietnam. It has over $1.8 billion in assets under management across four funds: VinaCapital Vietnam Opportunity Fund, VinaLand Limited, Vietnam Infrastructure Limited, and DFJ VinaCapital LP. VinaCapital strives to identify key trends and opportunities in Vietnam as the country continues to develop, with the goal of producing superior returns for investors.
This document summarizes an Islamic finance presentation on emerging opportunities for Islamic ship financing. It outlines the concepts of Islamic finance, including a prohibition on interest (riba) and a focus on profit and loss sharing. It discusses the progress of Islamic banking, current market size, and recent deals in Islamic ship financing. Structures for Islamic ship financing include existing vessel financing using an ijara (lease) structure and newbuild vessel financing using an istisna'a (procurement contract) structure. Case studies of recent Islamic ship financing deals are also presented.
Islamic Finance and Economic Growth in the Kingdom of Saudi Arabia (KSA): An ...scmsnoida5
This paper examines the relationship between
the development of Islamic finance system and
economic growth in the Kingdom of Saudi
Arabia. The relationship between Islamic
banking and economic growth is done using
econometric analysis. In this analysis, we use
Islamic banks’ financing credited to private
sector through modes of financing as a proxy for
the development of Islamic finance system and
Gross Domestic Product (GDP), Gross Fixed
Capital Formation (GFCF) and Foreign Direct
Investment inflow (FDI) as proxies for real
economic growth. For the analysis, the unit root
test, co-integration test and Granger causality
tests were done. Based on the availability of data,
time series data from 1990 to 2010 is used to
examine the relationship between Islamic banks’
financing and GDP, FDI, and GFCF. Data for
all variables are stationary after first difference.
The co-integration results provide an evidence of
a unique cointegrating vector. In other words, there is a long-term stable relationship between
Islamic banks’ financing and economic growth
in the Kingdom of Saudi Arabia. That means
Islamic banks’ financing and economic growth
relationships are moving together in the longrun.
The results from causality tests show that causality
relation exist from the Islamic banks’ financing
to investment and Foreign Direct Investment
(FDI) of the Kingdom of Saudi Arabia. The
results indicate that Islamic finance is a suitable
environment for attracting FDI and FDI
reinforces economic growth.
The document provides an overview of the global Islamic asset management sector. It finds that while the number of Islamic funds has significantly increased over the past five years, assets under management have grown only marginally and remain a small fraction of total Islamic finance assets. Malaysia, Saudi Arabia, and Luxembourg collectively host 71% of global Islamic funds. Sukuk funds outperformed benchmarks after the 2008 crisis but have struggled more recently. Achieving scale remains a key challenge for the industry.
This document summarizes the development of Islamic finance in the Gulf Cooperation Council (GCC) states. It finds that the GCC collectively accounts for over 40% of global shariah-compliant financial assets, led by Saudi Arabia, Kuwait, UAE, Bahrain, and Qatar. Government policy has generally facilitated Islamic finance's expansion through legislation and regulation, though some GCC states were initially cautious. The banking sector has grown rapidly, offering deposits, financing for trade, real estate, and consumer credit. Sukuk issuance and financial centers have also contributed to the industry's growth, with Bahrain emerging as a major Islamic finance hub. Overall, the GCC states have played a leading role in the global development of Islamic
The document discusses Islamic finance and its growth. It provides details about a conference held by the National Bureau of Asian Research on Islamic finance in Southeast Asia. It summarizes the opening and closing keynote addresses which discussed linking Asia and the Middle East through sukuk markets, building a financial architecture through research, and managing regulatory challenges. The document also provides background on Islamic financial principles and the opportunities it provides through interregional linkages and new investment opportunities.
Islamic finance has grown rapidly in recent decades and become a significant part of the global financial system, with estimated assets exceeding $1 trillion. There are two main models of Islamic finance - the Arab model which originated in the 1970s focused on asset management, while the Malaysian model emphasized generating financing. Malaysia in particular has been innovative in developing sharia-compliant financial instruments and a dual banking system. For Islamic finance to be economically sustainable, it must continue to interface productively with conventional finance by creating positive synergies rather than assuming competition between the systems.
The global Islamic finance industry has grown rapidly over the past decade and now manages over $1 trillion in assets. Several factors are driving continued growth, including increased capital from Muslim-majority countries, the rise of Islamic multinationals, and growing retail demand. While the industry has potential to tap into the large Muslim population worldwide, it still needs to educate customers and differentiate itself more from conventional finance. Regulatory challenges and a lack of skilled professionals could hamper further expansion.
MENA SUKUK: Untapped Potential - Adnan HalawiAdnan Halawi
Sukuk issuance grew significantly between 2006 and 2012 but plunged in 2013 due to hints from the US Federal Reserve that it may taper its stimulus program. MENA accounted for a declining share of global sukuk issuance over this period. Saudi Arabia has emerged as the second largest global issuer of sukuk in 2013. Factors such as global interest rates, sukuk ratings, and liquidity issues still influence the pricing gap between sukuk and conventional bonds. The sukuk market is expected to see continued growth in issuance to help close the demand-supply gap, which some estimates say may be eliminated by 2018.
This document provides an overview of the growth and current state of Islamic finance. Key points include:
1) Islamic finance has grown significantly in recent decades, fueled by rising oil revenues in Gulf nations that have increased liquidity and investment.
2) Acceptance of Islamic finance is also growing beyond predominantly Muslim regions as its principles of risk-sharing and asset-backed investments appeal to more investors.
3) Countries like Malaysia have been pioneers in developing Islamic finance through regulatory frameworks and educational institutions to establish themselves as hubs for the industry.
This document summarizes the Islamic finance education landscape and developments in 2016. It finds that while the Islamic finance industry is growing, there is a shortage of qualified human resources which poses a risk. In 2016, several developments aimed to address this, including new Islamic finance centers in Pakistan backed by the UK, and a partnership between the BIBF and University of Bolton for an MBA program. Online education is growing, with initiatives launched by organizations like IDB's IRTI on edX and IFSB's new e-learning portal. Looking to 2017, online learning is expected to continue growing, which will benefit Islamic finance education and the industry overall.
The IMF is an intergovernmental organization established in 1945 to promote international monetary cooperation and stability. It aims to foster global economic growth, stability, reduce poverty, and provide financing to countries facing economic difficulties. The IMF gets its money through member country quota subscriptions and arrangements with other governments and banks. It has 189 member countries and works to establish a framework for managing international monetary systems and balance of payment problems.
The document provides an overview of the Islamic finance industry. It discusses the history and origins of Islamic finance, the key players and geographic clusters, major products and deals, and current trends. The global Islamic finance market is growing rapidly at 10-15% annually and has reached $265 billion in assets, though there remains a need for standardization and professional training to further develop the industry.
Trust Fund: A Product Combining Waqf, Zakah and Sadaqah for Socio-Economic A...Islamic_Finance
This paper introduces Waqf, Zakah and Sadaqah, which are currently being mobilised by the non-Financial Institutions (non-FIs) such as charitable organisations and Non-Governmental Organisations (NGOs) as additional components of Islamic finance industry, to complement the efforts of financial intermediaries as a contributor to key socio-economic development. The paper presents various aspects of a case study regarding the use of Trust Fund Instrument by the Islamic Development Bank (IDB) for socio-economic development in its member countries including a project run with the co-operation of Bill & Melinda Gates Foundation (Gates Foundation) for polio eradication in Pakistan as part of the Global Polio Eradication Initiative (GPEI).
This document provides information about the Global Islamic Finance Report 2021 (GIFR 2021), including its production partners, sponsors, editorial team, and table of contents. Specifically, it notes that GIFR 2021 is a joint publication between the Cambridge Institute of Islamic Finance and Ajman University Center for Excellence in Islamic Finance. It also lists the organizations and individuals that contributed to and supported the report. The document concludes by outlining the various chapters that will be included in GIFR 2021, focusing on the role of Islamic finance in a post-COVID world.
This document provides an introduction to bullion trading in India through Harvest Futures Consultants India Pvt Limited. It discusses Harvest's vision, services, regulatory compliance, and offices worldwide. It also covers topics like how the global bullion market works, factors that influence commodity prices, technical analysis techniques, account security, and the steps to start trading forex. Risks are addressed, and qualifications for different levels of traders are outlined.
Ähnlich wie SOVEREIGN WEALTH FUNDS A great opportunity for the global financial world but a potential threat for both host country and home country By Thierry KAME BABILLA
This SlideShare provides a brief overview of what are Sovereign Wealth Funds, classifications, and top SWFs globally. In recent years SWFs have shown interest in VC-backed deals, with a growing trend in technology and life sciences. SWFs can be a force for positive change: the amount of money in an SWF is usually substantial, allowing them to contribute towards a country’s long-term growth by means of long-term investments in life sciences innovations.
This document discusses the role of sovereign wealth funds (SWFs). It begins by categorizing SWFs into stabilization funds, savings funds, reserve investment corporations, development funds, and pension reserve funds. It then examines the purposes of SWFs, noting they can be used to manage commodity revenue volatility, save for future generations, or pursue higher investment returns. The size and growth of SWFs is also analyzed. Newly established SWFs are mentioned. The document reviews literature on SWFs and responsible investing, national development objectives, and their potential destabilizing effects. It finds evidence SWF investment impacts can differ based on the SWF's objectives and investment timeframe.
The next paper, by Hany H. Makhlouf, provides a useful introduction and overview of sovereign wealth funds. These funds managed by 23 countries, mainly those with significant income from natural resources, for example, oil, have been of increasing interest in recent years and are expected to grow in the future if, as expected the price of crude oil triples in price over the next 20 years. However, the global economic meltdown had a major impact on their success and led many to a re-think of their strategic approach.
Capital Market and Economic Growth in Nigeria 1981 - 2010 Samuel Udeji
This document provides an introduction and background to a study examining the relationship between capital markets and economic growth in Nigeria. It discusses Nigeria's various development plans and the importance of finance and capital markets for economic growth. The author notes there is debate around the impact of capital markets on growth. While some research finds a positive relationship, others find negative or no relationship. The document outlines the specific objectives and hypotheses that will guide the empirical analysis in later chapters. It also provides an overview of the methodology and organization of the upcoming study.
The document discusses private banking in Australia. It provides context on private wealth globally and in the Asia-Pacific region, noting that Australia has the third largest private wealth market in the Asia-Pacific and 11th largest in the world. It then discusses private wealth and high net worth individuals specifically in Australia, including key statistics. Finally, it outlines the private banking industry in Australia, participants such as banks and financial planners, family offices, and the regulatory environment.
This document analyzes the asset allocations of sovereign wealth funds in 2013. It determines confidence intervals for the proportions of alternative assets, fixed income, cash, and public equities based on statistical analysis of 11-13 observed portfolios. The research objectives are to determine the current proportions of each asset class in sovereign wealth fund portfolios and the reliability of these proportions. The document reviews literature on sovereign wealth funds and their strategic asset allocations.
The Indian mutual fund industry has grown significantly since its inception in 1963. It has evolved through various phases from the establishment of UTI as the sole player to increased competition and regulation. Today there are over 100 funds with over $250 billion in assets. Going forward, factors such as financial inclusion, international players, and new product offerings are expected to drive further growth. However, challenges remain around fees, returns, and market penetration in rural areas.
This document provides an overview of financial institutions and markets. It begins with definitions of key terms like financial markets, debt/interest rates, stock markets, and foreign exchange markets. It then discusses causes of financial crises like banking crises, asset bubbles, international crises, and regulatory failures. The document concludes that financial markets have significant impacts on individuals, businesses, and the overall economy, so it is important to understand these systems and how monetary policy works.
BlackRock is the largest asset management firm globally, managing over $4.77 trillion in assets. It offers a wide range of products including mutual funds, ETFs, and advisory services. BlackRock has a history of acquisitions that have expanded its capabilities. It faces competition from other large asset managers but maintains strength in its brand, scale, and risk management platform called Aladdin. Both opportunities in emerging markets and threats from regulation and economic downturns could impact BlackRock's future performance.
WORKING PAPER (ESADEgeo): More Layers than an Onion: Looking For a Definition...ESADE
ABSTRACT
We analyze definitions used by researchers about a single concept: Sovereign Wealth Funds (SWF). It is still a matter of recent controversy and debate. We place these definitions into one of eleven categories. The results show full agreement (what we have called ‘the core’) for just two characteristics: SWFs are owned by governments and they are investment funds. Beyond the core, there are three layers commanding general consensus.
AUTHORS
Javier Capapé: PhD Candidate, ESADE Business School Researcher, ESADEgeo - Center for Global Economy and Geopolitics, ESADE Business School Research Affiliate, SovereigNET, The Fletcher School (Tufts University)
Tomás Guerrero Blanco: PhD Candidate, University Carlos III Madrid Researcher, ESADEgeo - Center for Global Economy and Geopolitics, ESADE Business School Research Affiliate, SovereigNET, The Fletcher School (Tufts University)
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SOVEREIGN WEALTH FUNDS A great opportunity for the global financial world but a potential threat for both host country and home country By Thierry KAME BABILLA
1. 1
SOVEREIGN WEALTH FUNDS
A great opportunity for global financial world but a potential threat for both
host country and home country
By
Thierry KAME BABILLA
September 4th 2016
Sovereign wealth funds are among the most important players in global financial
market, because of their increasing size and number. Both the global financial crisis
and oil price crisis have confirmed this prominent status due to the resilience of
sovereign wealth funds against these crises. Nevertheless, sovereign wealth funds
recently caught the attention of many experts because of the shifting of their features
from riskless assets and debts instrument to more risk-return profile assets.
Sovereign wealth funds, in fact, are large pools of capital created by governments to
hold foreign assets in order to achieve long-term investments via a broad array of
vehicles such a private equity funds, infrastructure, real estate, hedge funds and direct
equity investments.
Specifically, sovereign wealth funds can be classified into five groups.1
First group represents the stabilization sovereign wealth fund. Stabilization funds’
role is to protect domestic economy against commodities prices swings and external
shocks. Stabilization funds are Kiribati Revenue Equalization Reserve Fund (1956),
Nauru Phosphate Royalties Trust (1968), Botswana Revenue Stabilization Fund
(1972), Tuvalu Trust Fund (1987), Colombia Oil Stabilization Fund (1995),
Venezuela Stabilization Fund (1998), Azerbaijan State Oil Fund (1999), Iran Oil
Stabilization Fund (1999), Peru Fiscal Stabilization Fund (1999), Algerian Revenue
Regulation Fund (2000), Mexico Oil Stabilization Fund (2000), Sudan Oil Revenue
Stabilization Account (2002), Russia Oil Stabilization Fund (2004), Timor Leste
Petroleum Fund (2005), Mauritania National Fund for Hydrocarbon Reserve (2006),
Chilean Economic and Social Stabilization Fund (2007), Trinidad and Tobago
Heritage and Stabilization Fund (2007), Chad Revenue Management Plan (2008),
Turkmenistan Stabilization Fund (2008) and Mongolia Fiscal Stability Fund (2011).
Second group stands for the savings sovereign wealth fund. Savings funds are
designed for natural resources’ income redistribution from current to future
generation. Effective savings funds are Kuwait Investment Authority (1953), New
Mexico State Investment Council (1958), Permanent Wyoming Mineral Trust Fund
(1974), Singapore Temasek Holdings (1974), Abu Dhabi’s Investment Corporation
(1976), USA Alaska Permanent Fund (1976), Canada Alberta’s Heritage Fund (1976),
Brunei Investment Authority (1983), Government Investment Corporation of
Singapore (1991), Botswana Pula Fund (1993), Malaysia Khazanah Nasional Berhad
(1993), Gabon Sovereign Fund (1998), Fund for Future Generation of Equatorial
1 The number into bracketis the creation date of the specific sovereign wealth funds.
2. 2
Guinea (2002), Qatar Investment Authority (2005), Bahrain Future Generations
Reserve Fund (2006), Libya Investment Authority (2007), Ghana Petroleum Fund
(2011) and Panama Sovereign Wealth Fund (2012).2
Third group outlooks for reserve investment sovereign wealth funds. Reserve
investment funds aim at managing foreign exchange reserves by allocating assets in
higher yields investments, such as, equities and alternative instruments. Operational
reserve investment funds are Kuweit General Reserve Fund (1960), Oman State
General Reserve Fund (1980), Government of Singapore Investment Corporation
(1981), International Petroleum Investment Company (1984), United States Alabama
Trust Fund (1985), Mubadala Investment Company (2002), Korea Investment
Corporation (2005), Ras Al Khaimah Investment Authority (2005), Investment
Corporation of Dubai (2006), Oman Investment Fund (2006), Indonesia Government
Investment Unit (2006), China Investment Corporation (2007), Emirates Investment
Authority (2007), Abu Dhabi Investment Council (2007), France Strategic Investment
Fund (2008), Russia Reserve Fund (2008), Italy Strategic Fund (2011), North Dakota
Legacy Fund (2011), Kazakhstan National Investment Corporation of National Bank
(2012) and Western Australian Future Fund (2012).
Fourth group denotes development sovereign wealth funds. Development funds are
organized to achieve various domestic or foreign socioeconomic objectives namely
infrastructures. Among development funds are Louisiana Education Quality Trust
Fund (1986), Kazakhstan National Oil Fund (2000), Iraq Development Fund (2003),
Vietnam State Capital Investment Corporation (2005), China-Africa Development
Fund (2007), Saudi Arabia Public Investment Fund (2008), Iran National
Development Fund (2011), Nigeria Sovereign Investment Authority (2011), Papua
New Guinea Sovereign Wealth Fund (2011), Russian Direct Investment Fund (2011)
and Fund Soberanu de Angola (2012).
Last Group concerns contingent pension reserve sovereign wealth funds. Pension
reserve funds objective is to cover upcoming pensions cost or to finance government
pension funds. Pension reserve funds include Korea National Pension Service (1988),
Norway Government Pension Fund (1990), China National Social Security Fund
(2000), Ireland Oil Stabilization Fund (2001), New Zealand Superannuation Fund
(2003), Australian Future Fund (2006), Chilean Pension Reservation Fund (2006),
Japan Government Pension Investment Fund (2006), Kazakhstan Samruk-Kazyna
JSC (2008) and Russia Welfare Fund (2008).
Sovereign Wealth Funds, even if resources’ rich countries mostly own them, provide
significant benefits in advanced economies, emerging market economies, as well as in
developing economies.
In the United States, their principal host country, sovereign wealth funds have helped
keep long-term interest rates low, for so long, and improve access to capital for
corporations, by their huge acquisition of United States treasury bonds. With a share
of more than 90% invested, sovereign wealth funds remain the largest single investors
2 Kuwait Investment Authority was one of the first sovereign wealth funds created in 1953.
3. 3
in its financial institutions. United States economy benefited thus for more efficient
risks diversification and resources allocation by the investments of sovereign wealth
funds in their capital markets. Investments in banks, private equities and housing also
help as sources of large inflow of liquidity in the economy. Consequently, during the
global financial crisis, sovereign funds demonstrate their lead role in mitigating the
adverse effects of a liquidity or credit crisis, by strengthening the vulnerable balance
sheets of some of the world’s largest financial institutions, and appearing as
countercyclical providers of capital in the United States. Moreover, the real estate
industry and the technology industry are respectively, the second and third most
targeted investment sectors in the investments portfolios of sovereign wealth funds
with sound macroeconomic outcomes. By investing in the United States real estate
industries and technology sector, sovereign wealth funds help in creating and
preserving employment, but also in enhancing economic growth.
In emerging market economies, the global financial crisis offered an opportunity to
sovereign wealth funds to raise their participation and invest more in these economies.
In the second half of 2010, more than half of publicly reported direct investments by
sovereign wealth funds occurred in the Asia Pacific region, Brazil, Russia and India.
Furthermore, as several new wealth funds have emerged in these regions, domestic
investments have constituted increasing portions of their portfolios, leading to
increased total investment. The key benefit of sovereign wealth funds in emerging
market economies is thus the increasing reduction of infrastructures gap. The match
between sovereign wealth funds’ long-term investment horizons and the long-term
nature of infrastructure investments supports their substantial investment in
infrastructures projects in these regions. In this regards, some sovereign wealth funds
are now considering development of domestic infrastructures as part of their core
mandate.
In developing economies, sovereign wealth funds’ benefits are three-fold. Primarily,
sovereign wealth funds enable developing economies, most of which heavily relied on
commodities exports, to diversify their income sources. Diversification allows the
minimization of risk and does not leave developing economies completely exposed to
the volatilities of commodities prices. As shown recently, when sovereign wealth
funds offset the adverse effects of the collapse of international commodities prices in
many developing economies. Secondly, the fundamental benefit of sovereign wealth
funds in developing economies is the resolution of Dutch Diseases syndrome.
Basically, sharp surge in prices of commodities exported tend to result in a boom in
aggregate demand and a sudden upward swings in wealth, which induce a large
inflow of foreign currency and thus a real exchange rate appreciation. The real
appreciation via the spending effect weakens the competitiveness of non-commodity
sectors in international markets. In addition, the resource movement effect leads to a
shift of capital and labor in commodity sector experiencing an increase in demand.
Sovereign wealth funds help thus developing economies experiencing boom in the
commodity sector to maintain external stability over the long-term, by augmenting
their net external asset position in a way consistent with their economy features. In
addition, sovereign wealth funds dampen the loss of competiveness of non-
commodity sectors and mitigate the macroeconomic risk associated with the real
exchange rate appreciation, by accumulating more foreign assets proportionately to
4. 4
changes in commodity exports. Thirdly, by investing in foreign advanced economies
like the United States, sovereign wealth funds give developing economies the
opportunity to access new skills, knowledge, and technology transfer to supplement
their developments needs. That explained why, even sub-Saharan Africa markets that
have historically struggled to manage natural resources’ wealth are seeing the creation
of various sovereign wealth funds.
Notwithstanding theses numerous benefits of sovereign wealth funds across the
globe, they can potentially be made into threats both in host states and owned states.
In the host countries, namely, United States, many concerns are arising regarding the
growing nature of sovereign wealth funds and the rebalancing of their structures of
investments. In fact, sovereign wealth funds are deemed for opaqueness and limited
disclosure in its key aspects including, objectives, holdings, governance and
performance. Importantly, non-democratic resources’ rich countries mostly own them.
Hence it becomes obvious that, threats can be either political or related to security. In
the political point of view, owned states with political ambitions such as accessing
military technology, controlling strategic markets, or influencing public opinion, may
direct their sovereign wealth funds toward protected and strategic stakes in some
sectors within the host country, such as, military corporations, natural resource
industries, or other politically sensitive sectors. In the security point of view,
sovereign wealth funds with multiple investment objectives may take investment
decisions in a fashion involving national security concerns.
In the owned countries, such as, resource rich-countries, sovereign wealth funds face
many challenges. Mismanagement of sovereign wealth funds yields may sometimes
lead to problems of severe economic distortions, endemic corruption, and rampant
embezzlement. In some cases, large sudden payments into a domestic economy may
trigger corruption and expropriation of wealth in countries with less developed legal
and economic systems. Because of lacks in transparency on natural resource wealth
that is unexpected, political interests may create internal pressures on sovereign
wealth funds and may tend to crowd out spending from national interest into personal
interests, and reduce the incentives to create employment and economic growth. The
worst outcome of sovereign wealth funds threat may be that a select few elite in
power, spends the country’s wealth bouncily, disregarding future generations. These
potential adverse effects of sovereign wealth funds can explain the impediments to the
development of many African resources’ rich nations.
To overcome these sovereign wealth fund threats, regulations for greatest operations
of sovereign wealth funds have been developed. The International Monetary Fund has
convened the International Forum of Sovereign Wealth Funds and its predecessor, the
International Working Group of Sovereign Wealth Funds. The IMF thus unveiled the
Santiago Principles designed to safeguard independence, transparency, accountability,
and enhance governance of sovereign wealth funds. However, the Santiago Principles
face some intrinsic inadequacies on their ability in fostering sovereign wealth funds.
The good news above all is that sovereign wealth funds still have a significant role in
global financial stability and macroeconomic prospects throughout the world. To
preserve and expand its benefits this thought brought four key recommendations.
5. 5
First, permanent and close collaboration between the IMF, the host countries and the
owned countries are compulsory in the governance of sovereign wealth funds.
Second, strengthen regulations of sovereign wealth funds by enforcing the Santiago
Principles and adding mandatory rules. Third, a coordination of sovereign wealth
funds objectives and economic interests of host countries is needed. Fourth, sovereign
wealth funds should operate in each host country, consistently with their national laws
and national securities strategies.