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Press Release: New Companies added to the Sovereign Wealth Fund Strategic Index for H1Y2011

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The SWFI Index Committee and Park Alpha has determined which constituents will be added or deleted for the first half of 2011.  None of the constituents were removed from the index.  Four companies were added to the index, bringing the total # of constituents to: 41 from 37.  This will take effect on 1/3/2011.

New Companies added to the Sovereign Wealth Fund Strategic Index

  1. Hochtief AG
  2. AIA Group Ltd
  3. Agricultural Bank of China
  4. Areva

About the SWF Strategic Index

This market capitalization-weighted index gauges strategic sovereign wealth fund investment in public equity markets around the world. Currently, the index includes 41 publicly traded equity securities, from the original 30 selected in 2008. This index can be used as a benchmark to track aggregated SWF publicly traded strategic investor performance. In addition, it is a proxy to illustrate where strategic government cross-border equity investment flows. Governmental funds can use the index as a policy benchmark to compare their direct equity investment performance. We contribute to the investment process by delivering performance benchmarks and useful research tools, and as the basis for various investment vehicles.

This index is maintained by the SWFI Index Committee. It is a team comprised of analysts from both Park Alpha and the Sovereign Wealth Fund Institute (SWFI). The purpose of the Index Committee is to ensure the index remains a primary indicator of aggregated SWF publicly traded strategic performance. The Index Committee determines constituents on a semi-annual basis. The Index Committee constantly monitors events and makes sure index turnover is kept low.

Petrobras to Spend $320 Million to Hedge Portion of Oil Production

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Revealed on March 22, 2019, Petroleo Brasileiro SA (Petrobras) spent US$ 320 million on put options as a hedge. Brazil’s state-owned oil company bought the options to hedge part of its crude production for 2019. This is at an equivalent of US$ 60 per Brent oil barrel. The options will expire by the end of 2019.

The put options enable Petrobras to deliver oil at US$ 60 per barrel, but not the obligation to do so.

In a securities filing, Petrobras said, “The strategy is to hedge the export operations expected for the year, that way partially protecting the company’s operational cash flow.”

To compare to 2018, Petrobras is spending less on options in 2019. Petrobras had put options at US$ 65 a barrel, covering 128 million barrels.

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Storebrand Generates Steady Returns for 2017 and 2018

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Norway’s largest private asset manager, Storebrand, had a 13.7% return on equity in 2018. Storebrand now has total assets under management of US$ 82.6 billion. The staggering results topped 2017’s returns of 11.3%. Odd Arild Grefstad, CEO, was keen to point out that “2018 was a good year,” in Storebrand’s annual report. Grefstad also reflected on the peculiarities that were overcome during the year: “Our financial solidity was strengthened and there was an increase in the dividends distributed to shareholders. At the same time, the financial markets experienced turbulence at the end of the year, in a somewhat uncertain macroeconomic situation.”

Last year, new initiatives were implemented to bolster sustainable investments. The fund is also pushing to improve water management. Another investment coming this year will address deforestation. That will include tackling soy and palm oil farming, and cattle ranching. Grefstad addressed Storebrand’s “green” priorities: “The financial industry is an important contributor in the efforts to limit global warming, and we have a clear strategy . . . we have strict environmental, climate, and sustainability criteria for all our investments.”

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Biogen and Eisai Battered by Markets Over Alzheimer’s Trial Fail

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Cambridge, Massachusetts-based Biogen Inc. (BIIB) took a tumble of 28% in the morning of March 21st after it announced that it would cease its Phase 3 trials of Aducanumab. The therapy was intended to slow cognitive decline in patients with early onset Alzheimer’s. Biogen continued falling on March 22, 2019. Biogen and its Japanese development partner Eisai Co., Ltd. (ESALY) shared that the decision was based on results from an analysis conducted by an independent committee. The analysis determined that the trials were not going to demonstrate that Aducanumab could slow cognitive impairment. Eisai also fell 28% on the day, though it staged a relatively modest recovery on March 22nd. Some large institutional holders of Biogen include APG Asset Management (manager of Stichting Pensioenfonds ABP), Norges Bank Investment Management (manager of Norway Government Pension Fund Global), and Swiss National Bank.

The last time a treatment for Alzheimer’s made it to market was in 2003. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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