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Norway’s sovereign fund sees sustained volatility

Martin Skancke

According to the Guardian, “Investors face years of market volatility as governments consolidate their mountains of debt taken on both before and in response to the financial crisis, says the head of Norway’s sovereign wealth fund.

Martin Skancke, director general of the Norwegian Ministry of Finance Asset Management Department and responsible for the country’s sovereign wealth fund, said uncertainty may dominate but the fund’s long-term time horizon gives it the ability to ride out the gut-churning drops and equally fast rises.

“It will take a long time for governments in both Europe and the U.S. to consolidate their balance sheets. I think there will be probably uncertainty about that consolidation process which will give in to market volatility. That is something we are prepared for and can live with,” he said in a recent interview. “It could last a long time,” he added, referring to how governments will handle the aftershock effects of the financial crisis and how that has affected their accumulation of government debt.

On June 7, European Union finance ministers reached an agreement on the details for a 750 billion euro financial safety net for bloc members struggling to convince markets they can deal with high budget deficits and debt. Skancke said the three to five year time frame governments are giving themselves to cleaning up their balances sheets is a signal for continued uncertainty.”

Read more: Guardian

UNICEF and NBIM to Host Meetings on Children’s Human Rights

The United Nations Children’s Fund (UNICEF), a United Nations programme headquartered in New York City, has partnered with Norges Bank Investment Management (NBIM) to facilitate a series of meetings between companies to discuss issues surrounding children’s human rights.

According to the news release, “the network will facilitate dialogue between leading brands and retailers in the garment and footwear industry to strengthen children’s rights.”

NBIM is invested in many listed companies and have invited them to join a network to tackle these issues. Over the next two years, the organizations plan to hold three workshops as well as quarterly meetings surrounding these issues.

“Over time, we hope and expect that the network will contribute to improved market practices among companies and greater respect for children’s rights,” says Carine Smith Ihenacho, Global Head of Ownership Strategies, in a NBIM press release.

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SouthGobi’s CEO Arrested, CIC Struggles with Investment

The China Investment Corporation (CIC) has long struggled with its investments in coal assets, specifically in globally-listed coal miner SouthGobi Resources Ltd, which operates its flagship coal mine in Mongolia. In November 2009, CIC and SouthGobi Resources inked a convertible debenture deal. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Qatar Central Bank Deals with MSCI

MSCI, a stock index company whose benchmarks influence investor behavior, has tremendous indirect power impacting the stock markets of smaller economies. In 1988, MSCI released its emerging markets index, a now-widely-used benchmark for many institutional investors wanting access to growth markets. China and South Korea make up the majority of the benchmark, but smaller economies such as Poland, Chile and even Qatar make up other pieces of it.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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