MSCI Decision Tabled for June 2018 on EM Inclusion
MSCI issued a status update on the possible reclassification of the MSCI Saudi Arabia Index to emerging market status. A decision is expected to be released in June 2018, which is part of the company’s MSCI 2018 Market Classification Review. MSCI believes the size of the Saudi Arabian listed equity market will increase with the Saudi Aramco initial public offering.
Saudi PIF Keeps Leverage Options Open
Saudi Arabia’s Public Investment Fund (PIF) is analyzing options on whether to use leverage in its activities by possibly raising US$ 5 billion in 2018 from banks.
Swiss National Bank Expects Large Profit for 2017
The Swiss National Bank (SNB) is expecting a profit of 54 billion CHF (US$ 55 billion) for the 2017 calendar year. SNB has stepped up its investment in listed equities in recent years. However, most of SNB’s profit is due to currency movements – which amounted to 49 billion CHF in 2017. The central bank holds nearly all of its assets in foreign currencies.
PineBridge Investments Hires Former SSgA EMEA Executive
PineBridge Investments scooped up Michael Karpik to be the firm’s chief operating officer. He replaces Julian Sluyters who exited PineBridge Investments.
Karpik was CEO of EMEA at State Street Global Advisors (SSgA). Additionally, Karpik served in Chairman and CEO roles across their UK, France, and Ireland entities and has significant investment, fund product, and governance experience. He also held roles in Europe as Head of Investments; Chief Operating Officer; Head of UK, Ireland, and Middle East; Global Head of Cash Investments; and EMEA Head of Cash Investments. Before his role at State Street, Karpik worked at Sallie Mae as a senior funding manager in Washington, DC.
He will report to PineBridge CEO Gregory Ehret and be based in New York.
Bank Indonesia Issues Warnings on Cryptocurrencies
Bank Indonesia issued another warning about cryptocurrencies viewing them as high risk, not a legal medium of exchange in Indonesia and prone to speculation. Many central banks have issued concerns that cryptocurrencies could be used to facilitate money laundering and fund terrorism. Others argue that physical cash already does facilitate money laundering and fund terrorism.
Institutional investor Caisse de dépôt et placement du Québec (CDPQ), which works primarily on behalf of pension funds and insurance plans, is opening a new fund dedicated to Québec businesses that specialize in AI, or artificial intelligence. Available funds are slated at US$ 250 million for the enterprise. The commercialization of AI seems to be a natural fit for CDPQ, “Since Montréal is emerging as a global beacon of excellence in artificial intelligence, we need to enhance our offering and ramp up the financial and development support we provide AI businesses through the various stages of their growth,” according to Executive Vice President of Quebec and Global Strategy, Charles Émond. Émond aspires to see AI spread throughout “all sectors of our economy.” The AI fund will be run by CDPQ’s Venture Capital and Technology team. They will look for companies that are already doing well in the sector.
Another program is targeting early stage organizations. Mila Quebec AI Institute, a research and development organization founded by three universities, is building a new complex to help facilitate CDPQ’s goals. The new complex will house early-stage AI companies. CDPQ is especially interested in companies that can accelerate their growth and enter markets quickly, providing speedy returns. There is a social component, whereby companies will be required to contribute to Mila. Michael Sabia, President and Chief Executive Officer of CDPQ, noted, “With this partnership, la Caisse is pursuing its commitment to helping Québec businesses in this new economy thrive and expand.”
Keywords: Caisse de depot et placement du Quebec
The Russian Direct Investment Fund (RDIF) and Glasgow-based Aggreko plc, a listed company that provides power, heating and cooling, signed a deal to cooperate on the development of microgrids. The parties plan to invest in the construction of facilities that will provide uninterrupted power supply and temperature control to industrial enterprises and utilities in the Russian regions. Aggreko operates one of its 6 global hubs in Tyumen, Western Siberia, through an entity called Aggreko Evraziya, OOO. In 2017, Aggreko plc acquired Younicos, a company specialized in the development of modular batteries and Microgrids control solutions.
The worst fears of the Federal Reserve may be coming true. The barbarous relic is once again offering some resistance to Fed policy as it maintains its uptrend from mid-November, and is being snapped up from central banks worldwide. Former Fed chairman Paul Volcker shared the central bank view that “Gold was the enemy.” If so, the enemy is gaining ground. China’s gold reserves quietly grew from December 2018 to February 2019. The People’s Bank of China disclosed in February 2019 that it increased its gold reserves by 10 tonnes that month, following purchases of 11.8 tonnes in January 2019, and 9.95 tonnes in December 2018. Goldman Sachs has listed central bank purchasing as the reason for the uptrend. Goldman Sachs expects to see gold at US$ 1,400 over the next six months, which would lift it well above its long-held resistance at US$ 1,350. China’s gold holdings are now US$ 79.5 billion. China, which is emphasizing diversification from the U.S. dollar, has been a fan of precious metals for years, and it has been encouraging its citizens to purchase gold and silver for a decade, when previous controls on precious metals were done away with. Now anyone in China can trade gold internationally with the swipe of a card.
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