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Singapore’s GIC Keen on Royal Mail

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Royal_MailReports are being issued that one of the major institutional investors interested in the initial public offering of Britain’s Royal Mail is the Government of Singapore Investment Corporation (GIC) now known as GIC Private Limited. Other keen sovereign wealth fund investors include the Kuwait Investment Authority (through the Kuwait Investment Office) and the Abu Dhabi Investment Authority.

The UK government still plans to hold around a 30% – 49.9% stake in the national mail carrier and also plans on issuing a 10% stake to its over 150,000 employees.

Offers are currently being made to institutional and retail investors. The UK government expects roughly 70% of allocations will be made to institutional investors including public pensions and sovereign wealth funds.

Royal Mail has enjoyed a successful turnaround story under the leadership of CEO Moya Greene. According to reports, the 497-year-old postal service doubled its operating profit to £430 million this past year versus the year prior.

Additionally, it appears an attractive purchase by yield-hungry investors as the UK government has posted a possible dividend yield of between 6.1% and 7.7%.

The purchase, if carried out, would represent a continuance in the trend among the GIC in investing in listed UK equities. The Sovereign Wealth Fund Transaction Database has recorded a significant number of transactions by the GIC in UK equity.

Cryptocurrencies Creep into the Middle East

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Banking behemoth J.P. Morgan Chase disclosed its own digital currency called JPM Coin. The digital token will be used to settle payments between clients. JPM Coin will be backed by physical U.S. dollars and be based off Quorum. Quorum is J.P. Morgan’s private Ethereum-based chain. JPM Coin plans to compete with Ripple, which created XRP, another digital currency that is used for settlements. Ripple’s main target market is cross-border payments and remittances.

The Central Bank of the United Arab Emirates and the Saudi Arabian Monetary Authority have unveiled their plans for Aber, an interbank digital currency. Both banks have indicated that Aber will be limited to financial settlements using distributed ledger technologies. It will be rolled out on a probational basis, and used by select banks within the two countries. A date for rollout has not yet been declared. A joint statement hinted at a broader application of the currency in the days ahead. If “no technical obstacles are encountered, economic and legal requirements for future uses will be considered.”‏ Blockchains and Distributed Ledgers technologies will be employed. The plan is for ‘Proof-of-Concept’ testing, which involves studying and fully comprehending the ways modern technologies can achieve practical applications. The digital currency has the potential to become a reserve system for central payments.

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CPPIB Inks Partnership Vehicle with La Française and its Shareholder CMNE

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La Française and Canada Pension Plan Investment Board (CPPIB) formed a strategic partnership for the launch of a real estate investment and development vehicle: Société Foncière et Immobilière du Grand Paris. The joint venture between CPPIB (80%) and Caisse Fédérale du Crédit Mutuel Nord Europe (CMNE) (20%), La Française’s shareholder, will invest in major real estate projects linked to the Grand Paris infrastructure in the Greater Paris area. The parties will initially allocate €387.5 million in equity to the venture. The partnership will target regeneration and infrastructure-led investments.[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Norges Bank Governor Voices Opinion on Relaxing SWF Withdrawals over Specific Uses

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Øystein Olsen, the Governor of Norges Bank, which oversees the Norway Government Pension Fund Global (GPFG), voiced his opinion on the Norwegian government’s plans to alter the rules that regulates the country’s SWF withdrawal rules in certain circumstances. The coalition government led by Norwegian Prime Minister Erna Solberg wants to relax the limits on SWF withdrawals in specific cases. Norway’s government seeks to raid the fund to pay for the replacement of four major state buildings impacted by a terrorist attack and a crashed Royal Norwegian Navy frigate (KNM Helge Ingstad).

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