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NBIM Proposes Major Changes to SWF Bond Portfolio

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Yngve Slyngstad

Norges Bank penned a letter to Norway’s Ministry of Finance, “Letter to the Ministry of Finance, 1 September 2017”.

The letter essentially recommended four major changes to the Norway Government Pension Fund Global’s (GPFG) fixed income portfolio.

Four Recommendations.

1. The Bank recommends that a specific currency list is drawn up for the bond index. The currency list must ensure that the index is liquid and investable for the fund. The currency list should consist of US dollars, euros and British pounds.

2. The Bank’s recommendation is that the benchmark index for bonds should comprise nominal government bonds issued in currencies on a currency list.

3. The maturity of the bond index should be managed. We recommend setting an upper limit for maturity of around ten years for bonds included in the index. A shorter maturity will help reduce uncertainty about the fund’s volatility.

4. A portfolio equal to the current bond index is sufficiently liquid given the fund’s liquidity needs. The Bank’s recommendations in this letter may improve liquidity further, and so we believe that there is no need to amend the management guidelines in this area.

Source: Letter to Ministry of Finance, 1 September 2017.

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Emirates NBD Acquires Turkey’s Denizbank in $3.2 Billion Deal with Sberbank

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In a bid to establish itself as one of the region’s leading providers of financial services, Emirates NBD – Dubai’s largest bank – has entered into a deal to acquire a 99.99% stake in Turkey’s DenizBank A.Ş. for a bargain price of US$ 3.2 billion from Russian state-owned lender Sberbank. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Brazilian President Michel Temer Orders Liquidation of Sovereign Wealth Fund

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Brazilian President Michel Temer signed an executive order to shut down the country’s sovereign wealth fund. The money in the sovereign fund will go toward repayment of foreign debt.

The Sovereign Fund of Brazil, also known as Fundo Soberano do Brasil, was formed in 2008.

The formation of the Fundo Soberano do Brasil was authorized by then Brazilian President Luiz Inacio Lula da Silva.

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CDPQ Boosts Stake in Invenergy Renewables

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Caisse de dépôt et placement du Québec (CDPQ) boosted its ownership stake in Chicago-based Invenergy Renewables LLC. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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