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Currency Wars, Boon for Sovereign Fund Asset Growth

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Japanese Prime Minister Shinzo Abe desires the central bank to ease monetary policy to counter deflation and encourage export-led growth. Trillions of yen are to be pumped into the Japanese economy from asset purchases. Tokyo’s foreign-exchange policy could be a catalyst for a future Asian currency war. The Bank of Japan (BOJ) announced an open-ended easing plan and a 2 percent inflation target to stimulate growth. Many economists are worried about the Bank of Japan losing independence and caving to executive political pressure.

The government of Japan is adamant that the reason for this is to combat deflation and revive growth.

At the 2013 World Economic Forum in Davos, Bader Al-Sa’ad, the managing director of the Kuwait Investment Authority (KIA) informed news sources that, “the only fear is the decline of the yen. The decline of the yen could trigger a currency war in the countries of Southeast Asia; this is the only fear we have at the moment.”

Japanese public officials quickly countered that far and few complaints regarding trade advantages were brought up when U.S. and European economies embarked on quantitative easing policies. There is possible political consequences with China, a weakened yen might provide fuel for China to slow down renminbi appreciation. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Kuala Lumpur to Singapore Highway Delayed

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The Malaysian government under Prime Minister Mahathir bin Mohamad has been reprioritizing its large-scale infrastructure developments. The highly anticipated railway from Kuala Lumpur to Singapore has been delayed by another five years. The governments of Malaysia and Singapore signed a formal agreement on September 5, 2018. The previous ruling party in Malaysia had set the railway in motion, but the current administration is seeking time for further review. A joint statement suggested that the railway was still a certainty.

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Former FSDEA Chairman Arrested in Angola

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Jose Filomeno de Sousa dos Santos, the son of Angola’s former president and former chairman of the country’s sovereign wealth fund, has been placed under arrest, according to the state prosecutor’s office. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Keppel Land China Acquires Stake in Nanjing Jinsheng Real Estate Development

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On September 20, 2018, Keppel Land China, a subsidiary of Singapore-based Keppel Corporation, purchased a 40% stake in Nanjing Jinsheng Real Estate Development Co, a subsidiary of Gemdale Corporation. Keppel Land China did the deal through an entity called Eternal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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