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Bank of China and Temasek Sign Strategic Investment Agreement

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According to the press release, “Bank of China Limited (“Bank of China”) and Temasek Holdings (Private) Limited (“Temasek”) jointly announced today that, following negotiations and discussions by the two entities, Temasek will, through its wholly-owned subsidiary Asia Financial Holdings (‘AFH’), acquire a 10% interest in Bank of China for US$3.1 billion. Temasek has also undertaken to subscribe for an additional US$500 million worth of shares during Bank of China’s initial public offering. This transaction is pending government and other relevant regulatory approvals.

With this agreement, Bank of China has introduced another strategic investor following the signing of the strategic investment agreement with Royal Bank of Scotland on August 18, 2005.

Subject to mutual agreement, Temasek will assist Bank of China in improving corporate governance, including the right to nominate suitable candidates for election to Bank of China’s board of directors. Other areas of collaboration and support are under discussions.

In addition to a strong focus on corporate governance, Temasek will facilitate linkages to other players in the Asian financial sector to support the development of Bank of China’s talent pool and technology base. As major financial institutions in Asia, both entities also agreed to strengthen their cooperation and contribute to the financial sector modernization in Asia.

Bank of China said,”Temasek is a major investor in Asia, with a strong reputation and matured operating mechanism in the area of corporate governance. Bank of China is a banking group with nearly a hundred years of history, and has established a prudent business style and a broad customer network. The cooperation of these two strong financial institutions with complementary strengths will result in enhanced competitiveness. The strategic investment by Temasek will support the deepening of the overall reform for Bank of China. The transaction will help Bank of China further strengthen its capital base, improve its shareholder structure and enhance its corporate governance.”

Temasek said, “We are delighted that an agreement has been reached with Bank of China. This is our largest direct investment in China, and is also a long term investment for us. It underlines our confidence in the long-term growth of China’s economy. More importantly, this investment represents our belief that Bank of China has transformed itself into a strong financial institution with extensive networks in China and overseas. We share the bank’s belief in its tremendous potential and are privileged to be an investor.””

Read more: Press Release

US Becomes the Largest Crude Oil Producer in the World

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With the onset of fracking technology and a flood of capital entering the Texas energy market over the past decade, the United States is now the largest producer of crude oil. According to the U.S. Energy Information Administration, on September 12th, they revealed, “The United States likely surpassed Russia and Saudi Arabia to become the world’s largest crude oil producer earlier this year, based on preliminary estimates in EIA’s Short-Term Energy Outlook (STEO). In February, U.S. crude oil production exceeded that of Saudi Arabia for the first time in more than two decades. In June and August, the United States surpassed Russia in crude oil production for the first time since February 1999.”

Light sweet crude oil grades have rapidly expanded since 2011.

With two months remaining before U.S. sanctions go into effect against Iran, Iran’s crude exports are falling fast. European oil companies are exiting Tehran fearful of the repercussions of sanction violations, coupled with the country’s currency crisis. Iran’s influence over global oil prices have dwindled.

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Trump Goes Across the Political Aisle to Nominate Nellie Liang to Federal Reserve Board

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U.S. President Trump nominated Nellie Liang to the Federal Reserve Board of Governors. She is a long-time staff member of the Federal Reserve, joining in 1986 as a research economist. Liang must still be confirmed by the U.S. Senate pending the job post. She is a graduate of University of Notre Dame in 1979 and received her doctorate from the University of Maryland in 1986.

Ms. Liang is a registered Democrat.

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Ivanhoé Cambridge to Acquire Callahan Capital Properties

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Ivanhoé Cambridge, a unit of Caisse de dépôt et placement du Québec (CDPQ), signed a deal to acquire Callahan Capital Properties (CCP). Eastdil Secured advised on the transaction. CCP is Ivanhoé Cambridge’s investment partner of six years.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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