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Norway SWF Keeps Eye on Mexican Government Debt over NAFTA

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The United States and Mexico have made progress on revising key parts of the North American Free Trade Agreement (NAFTA), a 24-year old trade agreement. U.S. President Trump called out NAFTA as one of the worst trade pacts in history. A preliminary agreement between the U.S. and Mexico could be coming soon that will be the United States-Mexico Trade Agreement.

On August 27, 2018, U.S. President Trump tweeted, “A big deal looking good with Mexico!”

Outgoing Mexican President Enrique Peña Nieto then tweeted, “He hablado con el Presidente @realDonaldTrump. México y Estados Unidos han alcanzado un entendimiento comercial. Deseamos la reincorporación de Canadá a las pláticas para lograr una exitosa negociación trilateral del TLCAN esta misma semana.”

During the 1992 U.S. presidential campaign, candidate Ross Perot made a popular statement on NAFTA if it were to pass, “We have got to stop sending jobs overseas. It’s pretty simple: If you’re paying $12, $13, $14 an hour for factory workers and you can move your factory South of the border, pay a dollar an hour for labor,…have no health care—that’s the most expensive single element in making a car— have no environmental controls, no pollution controls and no retirement, and you don’t care about anything but making money, there will be a giant sucking sound going south.”

Ross Perot and George Bush lost the 1992 election to former U.S. President Bill Clinton. Clinton supported NAFTA and the trade pact went into effect on January 1, 1994.

Norway’s sovereign wealth fund has gradually lowered its exposure to Mexican government debt, having kept an eye on NAFTA talks, the Mexican presidential election, and ongoing economic and political events within the country.

Period Mexican Government Debt in NOK
Jun 2018 40,223,000,000
Mar 2018 39,958,000,000
Dec 2017 46,036,000,000

On the other hand, Norway’s sovereign wealth fund has gradually increased its exposure to U.S. government debt.

Period U.S. Government Debt in NOK
Jun 2018 665,594,000,000
Mar 2018 608,725,000,000
Dec 2017 607,651,000,000

Yield-Hungry Korean Insurance Capital Backs TSX Broadway

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Mirae Asset Daewoo Co., Ltd., the Seoul-based investment banking firm, has provided a US$ 375 million loan for a redevelopment in New York’s Times Square. It joins L & L Holding Company, Maefield Development, and Fortress Investment Group who are bringing the development known as TSX Broadway to life. The building is at 1568 Broadway in Manhattan. TSX Broadway, a US$ 2.5 billion project when all equity financing is added in, will allow for renovations and expansion of the 46-storey building. An LED screen, which is not an uncommon sight in the Big Apple, will wrap around the corner of the tower. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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OFFICIALS: Saudi Crown Prince Denies Interest in Acquiring Manchester United

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The Saudi Arabian government dispelled rumors that Saudi Crown Prince Mohammed bin Salman will acquire football club Manchester United. However, Saudi Arabia’s Public Investment Fund (PIF) had talks regarding sponsorship with the football club. Manchester United signed a partnership deal with Saudi Arabia’s General Sports Authority in 2017.

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China’s Central Bank Creates Macro-Prudential Management Bureau

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The People’s Bank of China (PBOC) created a new department to oversee and attempt to eliminate financial risks to the system. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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