Ministry of Finance allows NWF to invest half its portfolio in domestic funds.
Until the end of October, Russia's National Wealth Fund was invested solely in high-grade foreign government debt instruments. On Oct. 21, the Ministry of Finance released new guidelines on how the $76.4 billion fund should be invested, and allowed the NWF to invest up to half of its portfolio in domestic shares and investment funds.
New management. The changes signify a fundamental shift in the fund's investment strategy
and underscore the priority the Kremlin places on bolstering domestic
share prices, which have fallen by over 75% since May. While it is
still unclear what the exact portfolio allocation of the NWF will be,
investments into Russian securities have already begun:
-At the end of October, the NWF invested some $730 million into Russian equities.
--A further $180 million were invested in Russian corporate debt securities.
--The investments were made via state-controlled Vneshekombank (VEB), which currently acts as the NWF's agent in its domestic investments.
--It has not yet been revealed which companies the NWF invested in.
VEB representatives have also announced that the NWF has a further $5.5 billion on hand to invest in Russian shares. This corresponds to some 5% of the total market capitalization of the Russian equity market, meaning the NWF is in a position to significantly affect Russian share prices.
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