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China and Saudi Arabia Prep for Higher Oil Prices

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As the global price of oil increases, Saudi Arabia and China are making their moves. The U.S. sanctions on Iran are crippling the currency and economy of Iran. The U.S. has become an oil producing powerhouse, while Saudi Arabia is gearing for more action. Many believe Saudi oil production is approaching an all-time high. Saudi Arabia granted Saudi Aramco, the kingdom’s state-owned oil company, a 40-year exclusive concession in regard to extracting hydrocarbon reserves in the country. The concession includes an option for an extension of 20 more years. This new pact replaces some legal language dating back from 1933.

Sinopec in Canada

China’s Sinopec Shanghai Petrochemical Company (SHI) is forming a consortium with intentions to build and operate an oil refinery in Western Canada’s Alberta province. The proposed refinery will open broader markets for Canada’s crude. The new trio, consisting of Sinopec, China State Construction Engineering Corporation, and Alberta’s management company, Teedrum, are seeking to create a refinery large enough to process as many as 167,000 barrels of bitumen a day, transferring it into gasoline and other oil-based products. The new venture will be named SinoCan Global.

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BlackRock Experiences Outflows Among Institutional Investors

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Is BlackRock at peak earnings? BlackRock disclosed its third quarter 2018 results showing a growth of assets under management at US$ 6.4441 trillion at the end of September 2018 versus US$ 5.976892 trillion at September 2017. However, a large portion of the AUM growth has been in the ETF business, iShares, which tends to be very low in fees. The iShares business saw an inflow of US$ 33.7 billion for the quarter.

For the third quarter, BlackRock experienced US$ 24.8 billion in institutional investor outflows, with US$ 23.6 billion being on the index side, while US$ 1.2 billion being on the active side. Institutional investors such as pensions, insurers, and hedge funds withdrew from passive equity strategies. BlackRock saw US$ 4.745 billion in outflows in active equity on the institutional side, but seeing inflows of US$ 2.471 billion in multi-asset institutional and inflows of US$ 1.468 billion in alternatives institutional.

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GIC Buys Large Stake in Nordic Aviation Capital

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Singapore’s GIC Private Limited, a yield-hungry sovereign investor, invested in Denmark-based Nordic Aviation Capital A/S, becoming a significant minority shareholder. Other shareholders in Nordic Aviation Capital include EQT VI Limited fund, KIRKBI Invest (wealth origins tied to Legos), and Martin Møller, the founder of Nordic Aviation Capital. EQT VI will remain the largest shareholder of Nordic Aviation Capital. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Trump Wants Pharma Companies to Disclose Drug Prices in Advertisements

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U.S. President Trump is progressing on plans to mandate pharmaceutical companies to reveal their prices in drug advertisements. “The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay,” Health and Human Services Secretary Alex Azar said in a statement. “So while the pharmaceutical industry’s action today is a small step in the right direction, we will go further.”

The U.S. Health and Human Services Department would require pharmaceutical companies to include drugs’ sticker prices in their video advertisements. This would be similar to how drug companies disclose the laundry list of side effects.

Increasingly, sovereign funds like Temasek Holdings have backed mid-stage pharmaceutical companies and other therapies, while market investors like Norway’s GPFG have large holdings in listed pharmaceutical companies.

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