Cheap oil forces SWFs to retreat as glory days fade
London
THE glory days of some oil-based sovereign wealth funds (SWFs) could be behind them now that cash-strapped governments are raiding the coffers to plug yawning budget gaps, with investment returns too weak to make up the shortfall.
This is forcing some funds to sell assets to find ready cash, raising concerns that if this process accelerates, it could drive down the price of equities and other assets - creating a vicious circle.
Over the past two decades, SWF assets have grown to as much as US$7 trillion, according to Morgan Stanley, including everything from direct stakes in companies to luxury property assets.
But those funds that rely on their governments' oil export revenues for their main source of new…
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
International
Sunak says UK to raise defence spending amid global threats
China’s central bank hints it may add treasury bond trades to policy toolkit
US business activity cools in April; inflation measures mixed
India’s inflation at risk from extreme weather, geopolitical issues: central bank
Thailand to replace military-appointed Senate, reduce its powers
Bankers lose hope of London IPO revival for another year