World’s biggest sovereign fund enters Asian property market

Norway’s sovereign wealth fund paid ¥92.75 billion (SR3.09 billion) for a 70 percent stake in five commercial buildings in Tokyo. Above, the Tokyo skyline. (AFP)
Updated 07 December 2017
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World’s biggest sovereign fund enters Asian property market

OSLO, Norway: Norway’s sovereign wealth fund, the world’s biggest at more than $1 trillion (SR3.75 trillion), has made its first investment in the Asian real estate market, the Norwegian central bank said on Thursday.
The fund, which has already invested in property in Europe and North America, paid ¥92.75 billion (SR3.09 billion) for a 70 percent stake in five commercial buildings in Tokyo.
“This is the fund’s first real estate investment in Asia and is in line with our strategy to build a high-quality, global portfolio,” Karsten Kallevig, the head of the fund’s real estate management, said in a statement.
The remaining 30 percent were acquired by Tokyu Land Corporation.
Real estate accounts for 2.5 percent of the fund’s overall investments.
Intended to finance Norway’s welfare state when the country’s oil wells one day run dry, the fund mainly invests in stocks (65.9 percent of the portfolio) and bonds (31.6 percent).


Japan exports to US fall, business mood sours amid fears of trade war

Updated 19 July 2018
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Japan exports to US fall, business mood sours amid fears of trade war

  • Exports to the US dipped 0.9 percent in June from the same period a year ago on waning shipments of cars and semiconductor manufacturing equipment
  • The batch of data highlighted concerns among Japanese policymakers who worry Trump may resort to tariffs or other protectionist measures to fix trade imbalances with Japan

TOKYO: Japan’s exports to the US fell for the first time in 17 months and Japanese business sentiment soured amid worries about US President Donald Trump’s protectionist trade policies.
Exports to the US dipped 0.9 percent in June from the same period a year ago on waning shipments of cars and semiconductor manufacturing equipment, two of Japan’s most important export products.
Thursday’s trade data came on the heels of the Reuters Tankan, which showed business sentiment slipped in July, reflecting companies’ fears about an intensifying trade dispute between the US and China.
The batch of data highlighted concerns among Japanese policymakers who worry Trump may resort to tariffs or other protectionist measures to fix trade imbalances with Japan under his “America first” policy.
With American imports down 2.1 percent, Japan’s trade surplus with the US widened 0.5 percent year-on-year to ¥590.3 billion ($5.24 billion). That could make it a potential target for Trump’s protectionist policies.
Japan’s global exports rose 6.7 percent in June, while imports gained 2.5 percent.
“Overall exports remain healthy for now, but we are not sure how things are going to turn out on the trade policy front,” said Shuji Tonouchi, senior market economist at Mitsubishi UFJ Morgan Stanley Securities. “It’ possible talk of tariffs and trade friction could reduce corporate investment.”
The Reuters Tankan, which tracks the Bank of Japan’s closely watched quarterly tankan survey, found manufacturers’ sentiment index stood at 25 in July, down one point from June, and the service sector’s mood fell to 34 from 35 in the prior month.
The index subtracts the percentage of companies that feel negative about the economy from those who are optimistic, so a positive number means more businesses are upbeat.
Concerns about protectionism were widely cited in the Reuters poll of 483 large- and mid-sized companies, of which 268 responded between July 2-13, particularly among exporters of cars, precision machinery and metal products.
The US this month imposed 25 percent tariffs on $34 billion of Chinese goods to lower the US trade deficit, and China quickly retaliated with an increase in tariffs on US goods.
“Our clients are increasingly taking a wait-and-see stance on capital expenditure in the face of uncertainty over trade friction between the US and China and the EU,” a manager of a machinery maker wrote in the survey.
“Uncertainty is rising over capital spending plans at our client firms due to the expansion of protectionist policies and geopolitical risks,” said another machinery maker.
The manufacturers’ index is seen rising to 29 in October, while the service-sector index is expected to hold steady, after July’s decline led by real estate/construction firms.
The BOJ’s tankan showed earlier this month that big manufacturers’ mood soured for a second straight quarter in the three months to June, hurt by rising input costs and as US trade protectionism clouds the outlook for Japan’s export-dependent economy.
Still, the mood among non-manufacturers improved slightly and big firms’ solid capital spending plans offered some relief.