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Friday SWFI News Roundup, December 30, 2016

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BIG DEAL: RBI Approves Fairfax Financial’s Bid to Buy Domestic Indian Bank

The Reserve Bank of India (RBI) approved Canadian billionaire Prem Watsa’s Fairfax Financial Holdings Ltd. ‘s bid to acquire a 51% ownership stake in Thrissur, Kerala-based Catholic Syrian Bank Ltd. This is a milestone deal because this is the first time the RBI allowed an overseas investor to acquire a majority stake in a domestic bank. Catholic Syrian Bank was founded in November 1920. At the end of March 2016, Catholic Syrian Bank had 156.5 billion INR in assets.

Hans Tietmeyer Dies at Age of 85

Hans Tietmeyer was the head of Germany’s Bundesbank from October 1993 to 1999, known as the “high priest of the D-Mark”. He was the last president of the central bank presiding under the Deutsche Mark before the move to the euro currency. Tietmeyer had joined Bundesbank in 1990. Tietmeyer passed at the age of 85 on December 27, 2016.

Malaysian Technology Development Corporation Invests in New Shares of Green & Smart Holdings

On December 20, 2016, Green & Smart Holdings plc, a renewable energy company generating power from biogas captured through the treatment of Palm Oil Mill Effluent (POME) in Malaysia, has raised about 6 million MYR (£1.14 million) through the issue of new ordinary shares, totaling 10,761,367 shares, to Malaysian Technology Development Corporation Sdn Bhd. Malaysian Technology Development Corporation is a sovereign wealth enterprise (SWE) of Khazanah Nasional and is in charge of promoting the adoption of technologies by local companies via commercialization of research & development or acquisition of foreign technologies. The new shares were issued at an effective price per share equivalent to approximately 10.62 pence. Following admission, Malaysian Technology Development Corporation will hold 19,476,367 shares in Green & Smart Holdings, amounting to 6.78% of the enlarged issued share capital of Green & Smart Holdings.

Qatar Airways Bags 10% Stake in LATAM Airlines Group

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Cryptocurrencies Creep into the Middle East

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Banking behemoth J.P. Morgan Chase disclosed its own digital currency called JPM Coin. The digital token will be used to settle payments between clients. JPM Coin will be backed by physical U.S. dollars and be based off Quorum. Quorum is J.P. Morgan’s private Ethereum-based chain. JPM Coin plans to compete with Ripple, which created XRP, another digital currency that is used for settlements. Ripple’s main target market is cross-border payments and remittances.

The Central Bank of the United Arab Emirates and the Saudi Arabian Monetary Authority have unveiled their plans for Aber, an interbank digital currency. Both banks have indicated that Aber will be limited to financial settlements using distributed ledger technologies. It will be rolled out on a probational basis, and used by select banks within the two countries. A date for rollout has not yet been declared. A joint statement hinted at a broader application of the currency in the days ahead. If “no technical obstacles are encountered, economic and legal requirements for future uses will be considered.”‏ Blockchains and Distributed Ledgers technologies will be employed. The plan is for ‘Proof-of-Concept’ testing, which involves studying and fully comprehending the ways modern technologies can achieve practical applications. The digital currency has the potential to become a reserve system for central payments.

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CPPIB Inks Partnership Vehicle with La Française and its Shareholder CMNE

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La Française and Canada Pension Plan Investment Board (CPPIB) formed a strategic partnership for the launch of a real estate investment and development vehicle: Société Foncière et Immobilière du Grand Paris. The joint venture between CPPIB (80%) and Caisse Fédérale du Crédit Mutuel Nord Europe (CMNE) (20%), La Française’s shareholder, will invest in major real estate projects linked to the Grand Paris infrastructure in the Greater Paris area. The parties will initially allocate €387.5 million in equity to the venture. The partnership will target regeneration and infrastructure-led investments.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norges Bank Governor Voices Opinion on Relaxing SWF Withdrawals over Specific Uses

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Øystein Olsen, the Governor of Norges Bank, which oversees the Norway Government Pension Fund Global (GPFG), voiced his opinion on the Norwegian government’s plans to alter the rules that regulates the country’s SWF withdrawal rules in certain circumstances. The coalition government led by Norwegian Prime Minister Erna Solberg wants to relax the limits on SWF withdrawals in specific cases. Norway’s government seeks to raid the fund to pay for the replacement of four major state buildings impacted by a terrorist attack and a crashed Royal Norwegian Navy frigate (KNM Helge Ingstad).

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