Sovereign Wealth Fund Institute

According to the Emirates News Agency, “Due to the controversy at the legislative authorities in the US, around the public debt of the US Government, we have received some questions from local and foreign media entities, said the Central Bank of the UAE in a statement.

It added that the Central Bank of the UAE currently possesses no U.S. treasury bonds or any other financial instruments issued by the U.S. government due to the very low return on holding these instruments.

“We believe that the debate on the U.S. public debt ceiling issue will end with a compromise solution before the deadline date”, the statement added.

It indicated that “We do not believe that it is necessary to imagine that the U.S. government may default on its debts given its enormous potential, and we had seen in the past under President Clinton, the U.S. economy’s ability to reduce its public debt.”

The statement noted that no fear on the U.S. dollar, although it is exposed to price fluctuations as it happens with all the major currencies. Despite the fact that the Central Bank foreign reserves are mostly denominated in U.S. dollars, they are invested mostly in non-US assets. Eventually these investments are not obligations on the U.S. government.

It added that there is no direct link between the dollar-denominated assets and the U.S. Government debt. The peg of the Dirham to the U.S. dollar is steady and consistent.”

Read more: Emirates News Agency

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According to the press release, “Abu Dhabi –Mubadala Development Company (Mubadala) today announced that the Advanced Technology Investment Company (ATIC) has become a wholly owned business of Mubadala. “With common executive leadership and the Government of Abu Dhabi as shareholder of both organizations, ATIC’s integration into Mubadala will further drive the creation of innovative industries for the benefit of Abu Dhabi and the UAE,” said Waleed al Muhairi, COO of Mubadala.

“The development of an advanced technology ecosystem in Abu Dhabi, anchored by the semiconductor sector, is a critical aspect of the Abu Dhabi Economic Vision 2030 framework that guides the Emirate’s development.”

Mubadala played a key role in launching ATIC in 2008 as an element of Abu Dhabi’s long-term strategy to diversify its economy through investments in high-technology sectors. In less than three years, ATIC has transformed the competitive landscape of the semiconductor manufacturing industry through the creation of GLOBALFOUNDRIES, which has emerged as one of the top three semiconductor manufacturers in the world.”

Read more: Mubadala Press Release

Abu Dhabi’s Mubadala Development Company (“Mubadala”) has today signed two collaboration agreements on a strategic partnership with 1Malaysia Development Berhad (“1MDB”) that could lead to significant increases in FDI in Malaysia.

The agreements have been signed with Mubadala Real Estate & Hospitality (MREH) and Mubadala Industry (MI). MI has agreed to assess the viability of an investment of up to seven billion United States dollars (USD 7,000,000,000) for the development of a major initiative in the aluminium sector based on hydro power in the Sarawak Corridor of Renewable Energy (SCORE).

The two state-owned companies are starting preliminary assessment work on the project, which will create more than 10,000 jobs during construction and another 2,000 specialist jobs.

MREH has agreed to collaborate with 1MDB to explore the potential joint development of key strategic projects within the Kuala Lumpur International Financial District (“KLIFD”), the 34.4 hectare development in Kuala Lumpur that is being led by 1MDB. The full scope of MREH’s participation in projects to be located within the KLIFD will be finalized in 2011 following completion by 1MDB of the KLIFD master plan.

Read more: 1MDB Press Release

Near the bottom of the press release it states, “Mubadala’s Total Comprehensive Income (TCI) for the period was a negative AED 4.5 billion. This result reflects an unrealized loss of AED 4.4 billion from Mubadala’s public markets investments due to the decline in the local and global markets during the first half of this year. These investments are important components of Mubadala’s long term strategy, and the company recognizes that share price fluctuations will have a positive or negative effect on its periodical reporting of financial performance.

Mubadala’s total assets under management stood at AED 86.1 billion at the end of the first half of 2010. Total equity decreased 4.7% to AED 46.6 billion in the first half of 2010 from AED 48.9 billion in December 2009. Recently, Mubadala’s Board of Directors approved increasing Mubadala’s share capital from AED 5.5 billion to AED 15 billion through the conversion of certain shareholder rights.  The share capital increase is currently in the process of being formalized.”

Read more: Mubadala

According to the press release, “Abu Dhabi Aircraft Technologies (ADAT) and Sikorsky Aerospace Services today announced the launch of a joint venture to provide world class military aviation Maintenance, Repair and Overhaul (MRO) services to the United Arab Emirates (UAE) Armed Forces and other military operators internationally, including in the wider Middle East and North Africa region.

ADAT is wholly owned by Mubadala Development Company, the strategic investment arm of the Abu Dhabi Government, in the United Arab Emirates. Sikorsky Aerospace Services is the aftermarket business of Sikorsky Aircraft Corp., a subsidiary of United Technologies Corp. (NYSE: UTX).

The joint venture, known as AMMROC (Advanced Military Maintenance, Repair and Overhaul Center), brings together ADAT’s military track record of high quality and reliable maintenance services, and Sikorsky Aerospace Services’ Original Equipment Manufacturer (OEM) expertise.

With the combined strength of the joint venture parties and an aggregate investment that exceeds US$800 million, AMMROC will draw on decades of experience and expertise in aerospace engineering, material support, logistics, maintenance, component repair, overhaul and training to deliver a fully integrated MRO support program by a single provider. This will enable AMMROC to provide innovative platform solutions for all fixed and rotary wing aircraft, to ensure guaranteed aircraft readiness, deployability, improved safety and self reliance.

Read more: Press Release

According to Reuters, “The Abu Dhabi Investment Authority (ADIA) is not planning to cut its exposure to debt-ridden Europe, saying a stable regulatory, legal and tax framework make it an attractive place to invest.

“No, (we) maintain a stable view,” Jean-Paul Villain, strategy unit head at ADIA, told Reuters when asked whether the fund was looking to reduce its exposure in the face of Europe’s debt crisis. “These markets are efficient,” he said.

Sovereign funds, which together manage around $3 trillion of assets, are turning aggressive after cutting back their holdings in 2008 at the height of the credit crisis when they lost billions on banks such as UBS and Citigroup.  Speaking to Reuters on the sidelines of the Europlace Financial Forum in Paris, Villain said developed markets still offered attractions.

“The legal framework and tax framework is very stable. If you buy an infrastructure asset in the UK (for example), you have a clear … structure of regulation,” the former BNP Paribas executive said.

ADIA has assets of between $500 billion and $700 billion with investments ranging from Citigroup bonds to a stake in Britain’s Gatwick Airport.  State-owned ADIA invests funds generated by the United Arab Emirates, the world’s third-largest oil exporter, into overseas stocks and bonds as a means of diversifying away from the hydrocarbons sector.”

Read more: Reuters

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