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FAP Could Get Bigger With New Law

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Panama’s National Assembly approved Law 51 of 2018, which modifies Law 38 of June 5, 2018. The law impacts how Fondo de Ahorro de Panama (FAP) accumulates wealth. FAP management estimates the law change could increase the fund’s contributions up by US$ 150 million over a 3-year period.

According to a press release, the main changes of the law include:

“1. Strengthens the Fund with the contributions from the Panama Canal Authority (“PCA”) under the following conditions: a) for 2018 and 2019, when the total contributions of the PCA to the National Treasury exceeds 2.5% of nominal Gross Domestic Product (GDP), and b) for 2020 and beyond, when the total contributions of the PCA to the National Treasury exceeds 2.25% of GDP.

2. Allow the capitalization (reinvestment) of future returns until the Fund’s patrimony exceeds 5% of the nominal GDP of the previous year.”

FAP was formed by by Law 38 of June 5, 2012 and is charged with creating a long-term savings mechanism for the Panamanian State, while forming a stabilization mechanism in case of a state of emergency (declared by the Cabinet’s Council) and economic slowdowns.

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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Kazatomprom Treads Closer to IPO

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Kazatomprom is the world’s biggest uranium producer, accounting for around 20% of production market share. The company is moving forward on floating up to a 25% company stake for its planned initial public offering in London and Astana, Kazakhstan. Kazatomprom’s IPO plans are subject to market conditions. The global market price of uranium generated significant price gains year-to-date through almost three quarters. So far, during 2018, the uranium spot price has moved from US$ 20 per pound to US$ 27 per pound.

Kazatomprom’s sole shareholder is Samruk-Kazyna. Samruk-Kazyna would retain at least a 75% stake in the company.

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Credit Suisse and JPMorgan are joint global coordinators and joint bookrunners for the share offering. China International Capital Corporation, Halyk Finance, and Mizuho International plc were joint bookrunners.

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