That´s What Is Happening When You Outbid A SWF......Hapag-Lloyd Said To Seek As Much As $2.4 Billion In Capital

No problem with overbidding NOL ( Temasek ) but when your consortium is in part backed by the taxpayer ( City Hamburg & HSH Nordbank ) it is getting "annoying"....Especially when the taxpayer had already to bail out HSH Nordbank with well over € 10 billion ( and counting / see States agree €13bn HSH bail-out ).... Will be interesting to see how long the public will tolerate this form of "patriotism" or should i better say "protectionism"....

Maybe some of the officials were blinded with the success in former interventions (Beiersdorf/Procter&Gamble and Norddeutsche Affinerie/A-Tec).... France must be jealous.......... :-)

Grundsätzlich sind Übernahmen die massivst überbezahlt sind nicht weiter verwerflich...... Anders sieht es da aus wenn das Konsortium das den "Mondpreis" bezahlt hat zu nicht unwesentlichen Teilen der öffentlichen Hand ( Stadt Hamburg & HSH Nordbank ) zuzuordnen ist...... Ganz abgesehen davon das die HSH Nordbank bereits mit etlichen Mrd € ( siehe States agree €13bn HSH bail-out ) von den Steuerzahlern gestützt werden mußte....... Hier eine mehr als gelungene extra3 - Chronologie HSH Nordbank GENIAL :-)

Denke das diese Art des Patriotismus und der Standortpolitik ( evtl. sind die Erinnerungen an früher erfolgreich geschlagene "Schlachten" wie Beiersdorf/Procter&Gamble bzw. Norddeutsche Affinierie/A-Tec noch zu gut in Erinnerung) doch gewaltig aus dem Ruder gelaufen ist...... Böse Zungen könnten hier auch von Protektionismus sprechen...... Da könnte sogar Frankreich neidisch werden... :-)

Flashback October 2008

Rückblende Oktober 2008

TUI Sells Hapag-Lloyd Unit in 4.45 Billion-Euro Deal

Oct. 12 (Bloomberg) -- TUI AG, the German owner of Europe's largest travel company, agreed to sell Hapag-Lloyd to a Hamburg- based investor group in a deal that values the shipping company at 4.45 billion euros ($6 billion).

The Hamburg group, led by the city's government and logistics billionaire Klaus-Michael Kuehne, was the sole remaining bidder after Neptune Orient Lines Ltd. ( Temasek Holdings - the investment arm of the Singapore Government - is the largest single shareholder with a 68% holding ) dropped out on Oct. 10. TUI initiated the sale in March, giving in to investor pressure to focus on tourism.

The investor group, called Albert Ballin KG after a famous Hamburg ship owner, bid for the company to secure jobs and an important part of the city's maritime history. The group consists of the city of Hamburg (Hamburg alone has a holding of about 23 percent), Kuehne, private investment bank M.M. Warburg & Co., regional bank HSH Nordbank AG, and insurers Signal Iduna and Hanse Merkur.

Fast forward to today........

Nun zu der heutigen Schlagzeile.......

Hapag-Lloyd Said to Seek Up to $2.4 Billion Capital

July 9 (Bloomberg) -- Hapag-Lloyd AG, Germany’s largest container shipping line, is seeking as much as 1.75 billion euros ($2.4 billion) in capital from lenders and shareholders including TUI AG, two people familiar with the matter said

German banks will be asked to provide a 1 billion-euro loan backed by the federal government, one of the people said. TUI would shoulder 325 million euros and Albert Ballin 425 million euros, the person said. The Hamburg city, part of Albert Ballin, would pay 170 million euros, according to the person.

Doubling down.......Another interesting part is that TUI is still owning over 40 percent and has given Hapag-Lloyd significant credit lines.....The FTD has an estimate of only € 400 Million. According to Manager Magazin & TUI Deal Presentation ( Page 11) it is closer to € 1.4 Billion......

Hört sich für mich ganz nach "verbilligen" an......Interessant ist zudem das TUI immer noch über 40% an der Reederei hält und Hapag-Lloyd zudem nach der FDT mit 400 Mio € an Kreditlinien versorgt hat ( siehe auch Hapag-Lloyd braucht Milliardenhilfe ).Gemäß dem Manager Magazin ( siehe Hapag-Lloyd in schwerer See ) und der TUI Deal Präsentation ( Seite 11 ) vom Februar sind es sogar 1,4 Mrd €. Hier mehr vom Handelsblatt Notruf in stürmischer See

Needless to say that TUI is already rated at JUNK...... I´ll bet that they already regret that they haven´t sold to Temasek......

Brauche wohl nicht weiter erwähnen das TUI selbstredend seit Jahren mit JUNK geratet wird....... Bin mir sicher das die es bereits bitter bereuen nicht an Temasek verkauft zu haben.....

Corporate Rating

	Corporate Rating	Ausblick
Standard & Poor´s	B+	negativ
Moody´s	B2	negativ

Here is more on on the outlook for the shipping and container business...........

Hier mehr zum trüben Ausblick für die Containerbranche.........

Trade Update: Container Shipping "A Black Hole of Losses" Naked Capitalism

Cargo ships will carry 27 million fewer containers by year's end than they did in 2008 -- a reduction roughly equivalent to all of the cargo containers handled by the five busiest U.S. seaports in a typical year, according to London-based Drewry Shipping Consultants' Container Forecaster Report.

"There has never been a decline like this before. We have never seen numbers like these," said Neil Dekker, editor of the Drewry report. "The container industry is looking at a $20-billion black hole of losses. We can expect a lot of casualties."...

FT Alphaville

Market imbalances are in our view aggravated by the large newbuilding orderbook across most segments. These vessels will be delivered during difficult market conditions with most having been ordered at high rices. All shipping sectors will likely be affected by the high prices paid for newbuildings in recent years.

By our reckoning, these vessels will, on average, have to earn high freight rates to cover their purchase price and operating costs. With freight rates now very low in some segments, vessel operators look likely to incur substantial losses.

Consequently, we expect that the downturn for shipping will be severe and prolonged. We expect some relief on supply-side pressure, however, to come from widespread newbuilding cancellations or deferrals, and subsequent bankruptcies at weaker shipyards or cancellation of new ‘greenfield’ shipyard projects, primarily in China. We believe this is most likely to affect deliveries in 2011 and 2012

A sudden ratcheting upwards of the risk profile of these portfolios, which is what S&P expects, could mean a quadrupling in demand for regulatory capital under Basel II - quite a significant increase, particularly in these strained times.

The orderbook/current fleet ratio is indeed "stunning"......

Das Verhältnis Orderbuch im Verhältnis zur aktuellen Flotte ist in der Tat "atemberaubend"......



I´ll finish with one HSH Nordbank figure ......

Abschließend eine wenig beruhigende HSH Nordbank Zahl

Shipping lending represents 7.4x HSH Nordbank’s equity at end 2007

There is a good chance that large party of the shipping financing arm will be "outsorced" to a Bad Bank.....

Bin mir sicher das große Teile der Schiffsfinanzierungen demnächst in einer eigens dafür gegründeden Bad Bank landen werden.....

UBS: $14 Billion in Mortgage Write Downs

What a mess. Seems their 8 week old forecast was $ 4 billion too low. Lets hope the $ 12 billion capital injection from Singapour & the Middle East at fire sale prices will be still enough after the next forecast is hitting the tape..... I think the image as a rock solid Swiss banking giant is now gone and it will take a very long time to bring the once almost perfect reputation back. I assume that this debacle will also infect the much more important wealth management division. A break up is more than likely....

Was für ein Debakel. Sieht so aus als wenn die 8 Wochen alte Prognose mal eben um satte 40% oder $ 4 Mrd verfehlt worden ist. Bleibt die vage Hoffnung das die 12 Mrd $ Kapitalspritzen aus Singapur und dem mittleren Osten auch noch nach der nächsten Prognose immer noch ausreichend sind....... Der Ruf als solide schweizer Bankenadresse dürfte auf Jahre hinaus vernichtet worden sein. Ich kann mir kaum vorstellen das dieses Disaster ohne Auswirkungen auf die Vermögensverwaltung ( die mit abstand wichtigste Sparte ) bleiben wird. UBS wird wohl in der jetzigen Form die nächsten Jahre kaum überstehen.

FT Alphaville UBS, Europe’s largest bank by assets, reported a record loss after about $14bn of writedowns on assets infected by subprime mortgages in the US, reports Bloomberg on Wednesday.The fourth-quarter net loss of 12.5bn Swiss francs ($11.4bn) will result in a full-year loss of about CHF4.4bn, the Zurich-based bank said in a statement on Wednesday.

UBS posted its first annual loss since the company was created through a merger a decade ago, and the Q4 loss was bigger than the record declines reported earlier this month by Citigroup and Merrill Lynch. The collapse of the US subprime mortgage market has led to more than $130bn of losses and markdowns at securities firms and banks since June, notes Bloomberg.

UBS reported about $12bn of losses directly linked to the subprime market and an additional $2bn for positions related to the US residential market. The company said its Tier 1 capital ratio, a measure of financial strength, was 8.8 per cent as of December 31, reported Bloomberg.

Multiple Fire Sales At UBS After $ 10 Billion Write Down

Looks like the UBS comment from just a few weeks ago in UBS Write Down Estimates "Best Case $ 6 Billion, Worst Case.... that the write down´won´t be big was quite an understatement..... Will be fun to watch how long the term "maximum clarity" will be up to date this time ;-) . I´m pretty sure that the same survey about bonuses for the UBS will bring less "euphoric" results..... It´s about time to learn the new version of the Investment banking lexicon: The post-credit squeeze edition. HILARIOUS!

Sieht ganz so aus als wenn der Kommentar der UBS in UBS Write Down Estimates "Best Case $ 6 Billion, Worst Case.... das die Abschreibungen nicht "wesentlich" sein werden ein wenig untertrieben gewesen ist. Welch Überraschung..... Wird spannend zu sehen sein wie lange die Haltwertzeit der "maximum clarity" in diesem Falle vorhalten wird ;-) . Ich bin mir ziemlich sicher das die gleiche Umfrage zu Bonuszahlungen" für die UBS weniger "euphorische" Vorhersagen hergeben würde..... Höchste Zeit die für die neueste Version des Investment Banking Lexicon: The post-credit squeeze edition. Köstlich!

UBS to Sell Stakes After $10 Billion in Subprime Writedowns
UBS AG, Europe's largest bank by assets, said it will write down U.S. subprime investments by $10 billion and raise 13 billion francs ($11.5 billion) by selling stakes to investors in Singapore and the Middle East.

UBS expects a loss in the fourth quarter, and may have a loss for 2007, the Zurich-based company said in an e-mailed statement today.

Securities firms and banks had announced about $66 billion of losses and markdowns linked to the collapse of the U.S. subprime mortgage market this year. UBS reported its first loss in almost five years in the third quarter after the subprime contagion led to about $4.66 billion in markdowns on fixed-income securities and leveraged loans.

Besten Dank an Zeitenwende

UBS Press Release & Deutsche Version
UBS strengthens capital base and adjusts valuations
UBS has introduced measures to substantially strengthen its capital position, adding CHF 19.4 billion of BIS Tier 1 capital. These include an issue of CHF 13 billion of new capital. This has been placed with two strategic investors: Government of Singapore Investment Corporation Pte. Ltd. (GIC) ( see GIC Website) with CHF 11 billion, and an undisclosed strategic investor in the Middle East with CHF 2 billion.


> To be honest i´m surprised that Singapore has two vehicles and that GIC has assets over $ 300 billion. I´ve heard so for only from Temasek HoldingsUnocal) in relation with Singapore. It´s very impressive that such a small country with an estimated GDP of $ 140 billion, a population under 5 million and especially without a resource base has managed to accumulate close to $ 500 billion in Assets Singapore/Wikipedia. Chapeau!

> Ich bin ehrlich erstaunt das Singapur zwei staatlich kontrollierte Fonds zur Verfügung hat und das GIC mit über 300 Mrd $ so groß ist. Ich habe bisher im Zusammenhang mit Singapur immer nur den Namen Temasek Holdings gehört. Es ist beeindruckend wie es ein kleines Land mit unter 5 Mio Einwohnern, einen BSP von knappen 140 Mrd $ und vor allem ohne Rohstoffbasis schafft fast 500 Mrd $ in Staatsfonds zu pumpen Singapur/Wikipedia . Chapeau!

At the same time, UBS has revised key input parameters of the models that are used to estimate lifetime default and resulting losses for sub-prime mortgage pools. As a result of these revisions, UBS will write down its US sub-prime holdings by approximately a further USD 10 billion.

After these actions, UBS projects a strong BIS Tier 1 ratio of above 12%. ...

In response to continued deterioration in the US sub-prime mortgage securities market, partly driven by increased homeowner delinquencies but mainly fuelled by worsening market expectations of future developments, UBS has revised the assumptions and inputs used to value US sub-prime mortgage related positions. This will result in further writedowns of around USD 10 billion, primarily on CDO and "super senior"1 holdings. In light of continued deterioration in the sub-prime market, valuations of UBS's remaining sub-prime positions reflect the extreme loss projections implied by the prices achieved in the very limited number of observable market transactions in US sub-prime related securities and indices up to the end of November.

As the basis for its wealth and asset management business, UBS wishes to maintain a very strong capital base under all circumstances. Growth in net new money continues, with inflows in Global Wealth Management & Business Banking totalling about CHF 30 billion in October and November. It will therefore strengthen its capital position by issuing new capital in transactions with strategic investors, by selling treasury shares, and by replacing its 2007 cash dividend with a stock dividend.

> Must hurt to sell shares at fire sale prices that they have bought back for a better use of their capital. In Q2 the stock price was in a range of 70-80 Swiss Francs, today close to 50 Swiss Francs. And in total they are selling 36.4 million shares......... Well done!

> Muß sehr schmerzen die teuer zurückgekauften Aktien jetzt zu Schleuderpreisen zu verscherbeln. Ironischerweise sollten die Rückkäufe seinerzeit ja die effektivere Nutzung des Kapitals ermöglichen. Im 2. Quartal lag der Preis zwischen 70 und 80 Schweizer Franken, heute nahe 50...... Und insgesamt werden knapp über 36 Mio zuvor erworbene Aktien nahe Tiefstkursen vertickert...... Gut gemacht!

Strategic investors subscribe to issue of CHF 13 billion of new capital
UBS has reached agreements with two strategic investors – GIC and one other – to subscribe to an issue of CHF 13 billion of mandatory convertible notes. This is subject to the approval of UBS shareholders at an extraordinary general meeting (EGM) which will take place in mid-February 2008. GIC has committed to subscribe to CHF 11 billion and the other investor to CHF 2 billion. The notes will pay a coupon of 9% until conversion into ordinary shares, which must take place on or before a date approximately two years after issuance. The proceeds of the issue will count as Tier 1 capital for BIS capital adequacy purposes after EGM approval.

Sale of treasury shares
The Board of Directors of UBS has further approved the re-sale of 36.4 million treasury shares previously intended to be cancelled. UBS has received indications of interest in a share issue, is considering these and will place these shares over time. This will increase BIS Tier 1 capital by approximately CHF 2 billion.

Proposed replacement of 2007 cash dividend by stock dividend
The Board of Directors proposes to replace the 2007 cash dividend with a stock dividend, i.e. a bonus issue of new shares. This will boost Tier 1 capital by CHF 4.4 billion, of which approximately CHF 3.3 billion is a reversal of accrued dividend for the first nine months of the year and the balance is dividend that will now not accrue. This is subject to EGM approval.

In total, these three actions, when completed and approved, will strengthen UBS's regulatory Tier 1 capital by approximately CHF 19.4 billion. After completion, and taking into account the expected fourth quarter loss, the firm's BIS Tier 1 capital ratio will improve to above 12% from 10.6% at 30 September 2007.

Marcel Rohner, Group Chief Executive Officer, UBS, said: "Conditions in the US mortgage and housing markets have continued to deteriorate, and we have updated our loss assumptions to the levels implied by the current distressed market for mortgage securities. In the last several months, continued speculation about the ultimate value of our sub-prime holdings – which remains unknowable – has been distracting. In our judgement these writedowns will create maximum clarity on this issue and will have the effect of substantially eliminating speculation. Together with the strengthening of our capital base this will allow us to concentrate on sustaining and developing our client businesses.

Information on GIC
GIC is a global investment management company established in 1981 to manage Singapore's foreign reserves. With a network of eight offices in key financial capitals around the world, GIC manages a broad diversified portfolio across countries and asset classes that includes equities, fixed income, foreign exchange, commodities, money markets, alternative investments, private equity, real estate and infrastructure investments.

More insights via FT Alphaville UBS boggles - $10bn of writedowns, $17bn in emergency capital

"Club Deals" from Sovereign Wealth Funds

This is to my knowledge one of the first so called "club deals" in which two or more state owned or controlled entities are teaming up for a takeover or merger. This is a very significant event which if it succeeds should be very positive for equity markets overall.

It will be interesting to see how ABN and the Dutch public will react to this Barclay's/Temasek/China Development Bank offer. I think it is very difficult "politically" speaking for SVF to make bigger takeovers without a "strategic" partner like in this case Barclay's. But this "indirect" approach could be a way to dampen the "fear" that the "Chinese", "Emirates" or "Russians" are buying brand names or "national icons".

We in Europe have this discussion right now with the tendency to create a "golden share" that gives the countries a veto. The rule today is only in place for defence related companies but the trend is to open the gates and include utilities etc......

This would be the exact opposite what the EU was praying for the past decade.....excluding France...:-) . This deal could give us a first hint

Das ist meinem Kenntnisstand nach einer der ersten gößeren Deals in dem sich zwei staatlich kontrollierte Unternehmungen zusammenschließen um eine Übernahme zu stemmen. Das könnte der Anfang eines Trends sein der die Aktienmärkte bei Erfolg wohl nachhaltig unterstützen dürfte.

Ich bin besonders auf die Reaktion von ABN und der holländicshen Öffentlichkeit gespannt. Ich denke das es "politisch" immer noch sehr schwer für die SVF ist größere Übernahmen von "Brand Names" in Eigenregie durchzuführen. Der jetzt eingeschlagenen Weg den Anfang mit einem strategischen Partner wie in diesem Falle Barclay´s zu machen könnte die Furcht vor den Chinesen, Russen, oder Arabern evtl. etwas lindern.

Das ganze wird umso brisanter als wir in Europa ja gerade die Diskussion um die mit einem Vetorecht ausgestattete "goldene Aktie" führen. Bisher greift diese Regelung nur bei Aktien die mit dem Verteidigungssektor zu tun haben. Die aktuelle Diskussion läßt erahnen das eine Ausweitung auf andere Sektoren ( Versorger) durchaus im Bereich des möglichen liegt.

Das wäre das genaue Gegenteil von dem was die EU seit Jahren predigt....... mit Ausnahme von Frankreich :-). Dieser Deals könnte einen ersten Aufschluß geben wie die Stimmungslage ist.

Barclays Raises ABN Offer on China, Singapore Funding

July 23 (Bloomberg) -- Barclays Plc, vying to buy ABN Amro Holding NV in the biggest banking takeover, raised its offer to 67.5 billion euros ($93.4 billion) after securing investments from the governments of China and Singapore.

China Development Bank will invest 2.2 billion euros in Barclays, and a further 7.6 billion euros if the bid for ABN Amro succeeds. Singapore's Temasek Holdings Pte, the city-state's investment arm, will invest 1.4 billion euros initially, and an additional 2.2 billion euros upon the purchase of ABN Amro.

A merger of ABN Amro and Barclays would create a bank with a market capitalization of more than $160 billion. The Royal Bank- led group's offer, which will end Oct. 5, is 93 percent in cash.

``China and Singapore, especially through Temasek, have always had a long-term ambition within the global markets,'' said Lok Yim, head of fixed income and equity for Deutsche Bank AG's private wealth management group, based in Hong Kong. ``As the renaissance of Asia comes into full fruition, it is only natural that foreign exchange reserves are deployed differently.'' ....

> taken from Temasek Holdings

China Development Bank is one of the nation's so-called ``policy banks,'' which support the government's development and political agenda by lending for public works and to targeted industries. The government is planning to reorganize all three into commercial, profit-oriented banks.

Temasek's investment in banks, including stakes in Bank of China Ltd. and China Construction Bank, helped bolster its earnings. Its full-year profit surged 71 percent to a record S$12.8 billion ($8.2 billion) in the year ended March 31, 2006, according to its annual report. Investments overseas account for 56 percent of the $85 billion of assets Temasek manages, the report said.

Sovereign Wealth Funds

Time for an update.....Please click on the label at the bottom of the post to read more about the big impact of these players.

The right table shows the foreign direct investments in Germany. The spike in 2000 is related to the biggest unfriendly takeover in history so far from Mannesmann / Vodafone.

Mal wieder Zeit für ein Update....Klickt bitte auf das Label um mehr zu diesen immer wichtigen Spielern am Finanzmarkt zu lesen. Die Zahl im Jahr 2000 muß mit dem Vodafone/mannesmann Deals zusammenhängen.

Sovereign-wealth funds / Economist

besides the indirect effect that they are fueling the bond market leading to lower yields and extreme risk taking the state owned investment vehicles are more and more directly impacting the equity market....great news for global stock markets and definitly better than buying us treasuries.......as i´ve written before i think that the us market will benefit the least from this move (action in congress, diversification out of the $, unocal and ports deal etc......)

neben dem indirekten effekt das sie den bondmarkt überfluten und damit die renditen drücken und damit u.a. die z.zt. waghalsigen übernahmen mitermöglichen greifen die staatlichen investmentfonds immer mehr dirkt in das geschehen an den aktienmärkten ein. fantasticshe news für die weltweiten aktienmärkte...und immer noch besser als us staatsanleihen zu kaufen....und wie ich bereits vorher geschrieben habe glaube ich das die us am wenigsten von dieser entwicklung profitieren werden (man beachte nur das geschehen im us congress, diversifikation aus dem $, die geplatzten unocal und hafendeal usw.....)


China's investment in Blackstone shows how government investors are flourishing at the heart of the financial system

WITH $1.2 trillion in foreign-exchange reserves and the pool growing by more than $1 billion every day, China casts a giant's shadow over the global financial markets, even if it has mostly used the money to pile up American Treasury bonds. The announcement on May 21st that it would invest $3 billion of its reserves in Blackstone, a New York-based private-equity firm soon to issue shares, shows that it is prepared to barge into murky private markets as well as liquid public ones. It is not the only inscrutable country to be cosying up to the inscrutable private-equity industry. Around the world, a secretive society is emerging of governments flush with foreign assets, some of them petrodollars, that are increasingly calling the shots in international finance. The Blackstone deal is likely to stir others to invest their money even farther away from prying eyes than they do already.

Like China, whose proposed Blackstone stake is part of $300 billion that the government plans to set aside this year for investment purposes, dozens of countries have set up what are now commonly referred to as sovereign-wealth funds. They manage money drawn from reserves, natural-resource payments and the like. China is chiefly concerned to diversify its foreign reserves, but other sovereign-wealth funds own national, as well as international, assets.

The top 12 each have anything from $20 billion to hundreds of billions of dollars to invest (see table). Recently, Japan, Russia and India have reportedly been considering setting up funds along similar lines. Some estimates put the size of the funds at $2.5 trillion by the end of this year (in contrast, hedge funds are thought to have a mere $1.6 trillion), with another $450 billion in transfers from reserves being added annually. Including capital appreciation, the amount could swell to $12 trillion by 2015.




To the extent governments have traditionally held investment assets, it was to protect domestic currencies and banks from crisis. Since the funds were for emergencies, they were of a type that could be liquidated easily—initially the holdings were in precious metals, lately they have been in dollars. The idea of building up an endowment to replace shrinking natural resources did not exist.

That process may have started inadvertently in 1956 when the British administration of the Gilbert Islands in Micronesia put a levy on the export of phosphates—bird manure—used in fertiliser. The manure has long since been depleted. However, a once-tiny set-aside of money has become the Kiribati Revenue Equalisation Reserve Fund, a $520m investment portfolio that has grown to about nine times the tiny atoll's GDP.

A similar approach is now common among oil-producing countries, which, it is estimated, account for two-thirds of the assets in these sovereign-wealth funds, and are keen to diversify their national revenues, aware that their wealth is being pumped away. They have typically invested along similar lines to central banks, holding bonds, dollars and bank deposits. Temasek, (details http://www.temasekholdings.com.sg/ a Singaporean entity created in 1974 to pool state-owned investments, started to change the mindset. It subsequently evolved into an even more complex investment vehicle. The heady combination of state-control, success and secrecy, entranced other governments.


Recently, central bankers have also begun wondering whether they have a fiduciary duty to make higher returns from the public wealth under their supervision, which could mean placing at least some part of foreign-exchange reserves in high-yielding, if less liquid, investments. In Asia this question has become increasingly pertinent in the past two years, as reserves have mushroomed.

The result has been a torrent of money into a finite pool of assets. There is no precedent for such fortunes suddenly to find their way into global financial markets, and they help explain the waterfall of liquidity that has driven up the value of risky (and less risky) assets of all descriptions around the world. The world's entire supply of shares is $55 trillion, and bonds account for a similar amount. Sovereign-wealth funds could soon become the most important buyers of such assets, and many others besides. If so, the world will witness the intriguing spectacle of its largest private companies being owned by governments whose belief in capitalism is often partial.

The last time governments were this involved in sinking money into private assets, the process tended to be called nationalisation. Now the funds are invested both abroad and domestically. A new term will have to be coined: internationalisation, perhaps.

Northern light
Of the biggest sovereign funds, only Norway's provides anything close to transparency. Each year it discloses its investment portfolios and returns. ... here are the details http://tinyurl.com/3yexnp

Andrew Rozanov, of State Street Bank, argues that the lack of well-defined obligations and the ability to retain funds indefinitely while not having to reveal results is an investment advantage. The funds can harvest the benefits of volatility and illiquidity unavailable to the risk averse. It would not be surprising if some did particularly well. On the other hand, the same factors that could lead to higher returns could also lead to corruption and untoward political intervention.

But the kind of assets the funds invest in—big ones—can generate frictions even when run properly. Temasek has been embroiled in controversy in Thailand after it bought Shin Corp, one of the country's telecoms companies, from Thaksin Shinawatra, the country's deposed prime minister. China is no stranger to such tensions. In an event that still rankles, CNOOC, the state-controlled oil company, was blocked in America, supposedly on national-security grounds from acquiring Unocal, an oil company.

It is quite possible that by purchasing a non-voting interest in Blackstone, China will be able to bypass the restrictions that might prevent it doing Unocal-style deals in Europe and America......

China still has vast holdings of state assets, and its embryonic stockmarket is bubbling over—if anything it needs more publicly traded companies. Like other countries with sovereign-wealth funds, it would appear to need more expertise in selling companies that it owns, rather than learning how to buy the ones it does not

>just the news from yesterday involving state investment vehicles....
>hier ein paar beispielmeldungen vom montag in sachen staatliche investments...

Singapore Air, Temasek May Buy 24% of China Eastern http://tinyurl.com/2fkdgx
OMX Shares Advance on Report Dubai May Outbid Nasdaq http://tinyurl.com/2z8v43
Norsk Hydro preparing $30 bln bid for Alcan http://tinyurl.com/ytvxlg Pogo sells Northrock to Abu Dhabi Energy http://tinyurl.com/22d926

and this were news from a bank holiday....
und das waren die meldungen vom pfingsmontag....