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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. ]

Mergermarket Gets Ready to be Sold

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Private equity firm BC Partners hired Goldman Sachs Group Inc. and JPMorgan Chase & Co. to advise on the sales of Acuris. Acuris is a collection of financial news and data sites, which includes Mergermarket, Dealreporter, and Debtwire. In 2017, BC Partners sold around a 30% stake in GIC Private Limited.

Before the rebranding to Acuris, Mergermarket was part of The Financial Times Group until 2013 when it was sold off to BC Partners.

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Why Japan Post Sees Promise in Aflac

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Aflac Inc. is an American insurance company founded in 1955. The company is the biggest provider of supplemental insurance in the United States. Aflac also has major operations in Japan.

In December 2018, Japan Post Holdings (JPHLF) signaled it was spending US$ 2.64 billion for a 7-8 % stake in Aflac. The goal is that, in four years time, Aflac will become an affiliate of Japan Post. Japan Post hopes to accomplish this by becoming the largest voting shareholder of the company. The world’s 13th largest company, with 400,000 employees, Japan Post needs to expand to chase further growth, mainly because Japan Post expects the postal business to decline. Diversification is seen as the optimal route to long term stability for the holding company. Japan’s economy is worrying. Japan’s aging population means that many insurance companies are facing a shrinking customer base, Japan Post settled on a plan to expand overseas.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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RDIF and Development Agency of Serbia Agree to Explore Joint Investments

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The Russian Direct Investment Fund (RDIF) and the Development Agency of Serbia, also known as Razvojna agencija Srbije, reached an agreement to work together to identify attractive investment projects to strengthen bilateral economic ties and increase investment flows between Russia and Serbia. Russian capital and businesses are keen on investing in Serbia.

In addition, the two countries signed an agreement to cooperate on civil nuclear energy, according to state-owned Russian reactor builder Rosatom (Rosatom State Nuclear Energy Corporation). Rosatom continues to expand it business of nuclear cooperation deals in a wide number of countries.

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