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IN THIS ISSUE

• Key Highlights and Trends
• News by Region
  • Asia/Pacific
  • GCC
  • Europe
• Spotlight on The Russian Direct Investment Fund

NEWS BY REGION

Asia/Pacific:

• Malaysia’s SWF and Singapore’s Temasek jointly developing luxury residential and commercial projectsin Singapore with US$3.18bn gross development value

• CIC closes deal to buy West London office developmentfor about £800m (US$1.27bn)

• Temasek’s Pavilion Energy acquires 20% stake in Tanzanian natural gas developments for US$1.3bn

• World Bank issues US$160 million in Indian rupee-linked bonds under its US$1bn program designed to deepen India’s capital markets

• Russia’s central bank warns consumer lending is showing signs of overheating

GCC:

• U.S. judge rejects Citigroup’s effort to block Abu Dhabi Investment Authority (ADIA) from seeking second arbitration over SWF’s 2007 investment in the bank

• ADIA and Singapore’s GIC acquire Time Warner’s NYC HQ for US$1.3bn in latest large property deal by foreign investors in NY

• Kuwait Fund for Arab Economic Development to give US$1bn to African countries

• QIA-owned Qatar National Bank gives Tunisia US$500 million deposit to support foreign currency reserves amid pressure on Tunisia to trim its budget deficit

Europe:

• S&P cuts France and the Netherlands credit ratings and raises Cyprus rating and Spain outlook

• Ireland becomes first Eurozone country to exit EU/IMF bailout program

• Belgium’s SWF, Federal Holding Company, sets up fund with India’s Infrastructure Leasing and Financial Services, to invest in infrastructure projects

• Italy’s government will sell up to €12bn in assets to cut its debt – the largest in EU after Greece at 130% of GDP

• Norway’s SWF, and Singapore’s Temasek join other investors in buying about US$1.1bn of HK IPO of China debt manager, Cinda Asset Management Corp.

• Poland’s government approves draft law to overhaul private pension plans and cancel privately managed sovereign bonds

• US$769bn Norwegian SWF returns 5% or about US$37bn in 3Q 2013

KEY HIGHLIGHTS AND TRENDS

OECD SEES GROWTH PICKING UP IN EURO ZONE, CHINA AND UK, WHILE REMAINING SLUGGISH IN INDIA, BRAZIL, AND RUSSIA

CENTRAL BANKS WORLD OVER MANIPULATING RATES TO FIGHT DEFLATION OR INFLATION

• Those lowering rates include: the ECB which halved its benchmark rate to a record-low 0.25%; Peru which cut its rate to 4%; and Thailand which cut its rate to the lowest in three years to 2.25%
• Those raising rates include: Brazil which raised its benchmark rate to 10% for the sixth time in a row; India which raised its key lending rate for a second time to 7.75%; and Indonesia which raised its rate to 7.5%

PETERSON INSTITUTE SAYS ECB NEEDS TO SAY IT WILL DO WHATEVER IT TAKES TO BRING INFLATION HIGHER AND INTERVENE IN CREDIT MARKETS TO GET DIFFERENTIALS IN BORROWING COSTS DOWN

CENTRAL BANKERS DIVERSIFYING AWAY FROM USD AND EURO, TO KOREAN WON, AND AUSTRALIAN, NEW ZEALAND AND CANADIAN DOLLARS, AMID ECONOMIC UNCERTAINTY AND US FED’S INTENTION TO BEGIN WINDING DOWN ITS STIMULUS

EUROPE’S SOVEREIGN DEBT NEXUS GROWS AS LARGEST BANKS INCREASE SOVEREIGN DEBT INVESTMENT BY 26% IN PAST TWO YEARS, WHILE REDUCING CORPORATE LENDING BY 9%

• Fitch Ratings says incoming Basel III capital rules are at least partly to blame, as 4.7% average regulatory capital charge on corporates is about 10 times higher than 0.4% charge for sovereign risk

OECD SAYS RAISING RETIREMENT AGES AND PROMOTING PRIVATE PENSIONS NOT ENOUGH –  GOVERNMENTS NEED TO CONSIDER LONG-TERM IMPACT ON SOCIAL COHESION, INEQUALITY AND POVERTY

IMF SAYS ‘SWFS SHOULD ROPE IN INDEPENDENT EXPERTS FOR RISK, ASSETS ALLOCATION’

SWFS CAN LEAD DRIVE TO VALUE NATURE IN THEIR INVESTMENT POLICIES

ASIAN SWFS LEAD IN HEDGE FUND INVESTMENT WITH 44% ALLOCATION