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How Timor-Leste May Prove Naysayers Wrong

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timor1Emerging from past conflict, the post-colonial nation of Timor-Leste is ushering in a new era to nurture economic vitality. During the nation’s infancy, the country had very little infrastructure and money. On May 20, 2002, independence was restored, as the administration of the United Nations handed over the keys. Nearly a decade later, on December 31, 2012, the United Nations peacekeeping mission in Timor-Leste concluded operations. With a population above one million, the country has been able to grow fast by exporting oil, gas and coffee. Timor-Leste coffee growers can thank Starbucks for being a big buyer of their coffee beans. Excluding petroleum and gas exports, coffee accounts for 90% of the nation’s merchandise exports.

Since 2007, Timor-Leste had an average growth rate of 11.9%. Coupled with low tax rates and abundant natural resources, the young country is on an ambitious path to transform their home from an agriculture-centric to an industrial one by 2030.

The Timor-Leste Petroleum Fund, their oil-based sovereign fund, had a slow start and by 2007 accumulated US$ 1.8 billion. Managed by the Banco Central de Timor-Leste, the fund’s investments are conservative compared to other sovereign funds like the Abu Dhabi Investment Authority or the Kuwait Investment Authority. The 2011 amended Petroleum Fund Law states that the objective of the investment policy is to maximize the risk-adjusted return.

A maximum of 50% of the sovereign fund can be invested in equities.

Fast forward in time with the advances in storage technology and massive investments in energy transportation, the sovereign fund has mushroomed to US$ 13.6 billion – surpassing Botswana’s Pula Fund and Chile’s Pension Reserve Fund. According to the Timor-Leste government, since January 2013, the sovereign fund has increased on average US$ 324 million each month. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Does the Hong Kong Dollar Have a Future?

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Despite the Hong Kong dollar straddling within the upper echelons of being a highly-traded currency, its existence could be in doubt in the future. The Hong Kong dollar is the official currency of Hong Kong and the governmental currency board is the Hong Kong Monetary Authority (HKMA). The HKMA is tasked to oversee the stability of the local currency with its massive pool of government reserves. Before the Hong Kong colonial government named the silver dollar as legal tender in 1863, the global trading post utilized the British sterling, Indian rupees, Spanish silver coins, and Chinese cash coins. There were decades of set exchange rates with the British pound. Fast forward years, eventually in 1983, the Hong Kong dollar was pegged to the U.S. dollar. In 1997, Hong Kong moved from English rule to Chinese control.

Could the Hong Kong Dollar End?

The Hong Kong dollar will soon go into the dustbin of history, according to local and international experts. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Mubadala Invests in Series B in Primer

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San Francisco-based Primer raised US$ 40 million in a Series B round that was led by Lux Capital. Other investors in the round include Mubadala Investment Company and Section 32. Return backers include Amplify Ventures, DCVC (Data Collective, and In-Q-Tel, an investment form supported by the Central Intelligence Agency (CIA). Primer is an artificial intelligence platform that analyzes large datasets, competing with firms like Peter Thiel’s Palantir Technologies Inc. Primer raised US4 14.7 million in its Series A round from In-Q-Tel, Lux Capital, Amplify Partners, and Data Collective.

Primer was founded by New Zealander Sean Gourley, the co-founder & CTO of Quid, an augmented-intelligence company.

Palantir

This is in the midst of the financial backers of Palantir who are trying to value their stake in the company. Morgan Stanley’s mutual funds owns shares in Palantir and have lowered their valuation in the company. Morgan Stanley believes Palantir is worth around US$ 4.4 billion as of September 30, 2018. Palantir attempted to buyback all of the stock held by Morgan Stanley’s mutual funds, which amounts to just around US$ 3 million as of the middle of 2018.

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HSBC and CIC Hold Talks on Bilateral Investment Fund

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Taking a page from the Goldman Sachs cooperative fund deal, banking giant HSBC and the China Investment Corporation (CIC) are in talks to form a £1 billion fund to invest in U.K. companies that have linkages to the Chinese economy. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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