Qatar to list $ 12 bn firm with wealth fund’s assets

Updated 19 February 2013

Qatar to list $ 12 bn firm with wealth fund’s assets

DOHA: Qatar will create a new $ 12 billion investment firm, backed by blue-chip assets from its sovereign wealth fund, and list it on the local stock exchange, its main institutional backer said.
Qatar Holding — the investment arm of the Qatari sovereign fund — said the new firm will invest in assets around the world.
“You name it — shares, bonds, real estate, private equity. We will look at every sector in every country around the world,” Hussain Al-Abdullah, Qatar Holding’s vice-chairman, said at a news conference.
Qatar Holding, believed to have assets in excess of $ 100 billion, has been the most active of the region’s sovereign wealth funds in recent years, deploying the nation’s riches from plentiful natural gas to buy stakes in companies ranging from German sports car maker Porsche to British bank Barclays and Swiss lender Credit Suisse.
“Listing a company of this magnitude will stimulate more wealth distribution down the line. It will give Qataris a chance to be part of the country’s growth and will bring in sophisticated foreign investors once it’s listed,” said R. Seetharaman, chief executive of Doha Bank.
Qatar Holding will transfer $ 3 billion worth of assets into the new firm, with a similar amount raised in an initial public offering on the Qatar Exchange. A senior banker familiar with the matter said a further $ 6 billion will be raised at a later date.
Some bankers expressed doubt over whether the company could be launched as quickly as Qatar hopes.
“The announcement is pretty surprising, and it’s a brave move by Qatar. Most of their investments are either bespoke or in listed entities. There is a risk that it may open up their books significantly,” a senior banking source in Dubai said.
The IPO is open only to Qataris, but foreign investors will be able to buy in later.
Qatar Holding’s investments are widely seen as opportunistic, not following a specific strategy, as it has purchased a wide range of assets globally.
Qatar has also invested in other Arab states partly to boost its political clout.
The sovereign fund had a rate of return of 17 percent last year, Abdullah said.
“This is a global investment company to invest overseas, not in Qatar,” he said, adding it planned to guarantee a 5 percent dividend in its first year.
It was not immediately clear which assets would be transferred to the new firm, called Doha Global Investment Company.

The banker said Qatar Holding would spin off $ 3.5 billion worth of assets into the firm at a discount value of $3 billion.
Abdullah, who is also a board member of the Qatar Investment Authority, said the listing would take place in six to eight weeks on the Qatar Exchange, which seeks to rival Dubai as a financial hub.
“We don’t see an immediate rationale for a move like this, other than maybe sharing the wealth of the nation with citizens, but they have a lot of other companies in petroleum, steel, water treatment which should go (public) first,” the Dubai banking source said.
Credit Suisse, in which the sovereign wealth fund owns a 6.2 percent stake, is advising Qatar Holding.

Merkel seeks united front with China amid Trump trade fears

Updated 22 May 2018

Merkel seeks united front with China amid Trump trade fears

  • Merkel seeks common ground to ward off trade war
  • Plans complicated by US policy moves

Chancellor Angela Merkel visits China on Thursday, seeking to close ranks with the world’s biggest exporting nation as US President Donald Trump shakes up explosive issues from trade to Iran’s nuclear deal.

Finding a common strategy to ward off a trade war and keep markets open will be Merkel’s priority when she meets with President Xi Jinping, as Washington brandishes the threat of imposing punitive tariffs on aluminum and steel imports.

“Both countries are in agreement that open markets and rules-based world trade are necessary. That’s the main focus of this trip,” Merkel’s spokeswoman Martina Fietz said in Berlin on Friday.

But closing ranks with Beijing against Washington risks being complicated by Saturday’s deal between China and the US to hold off tit-for-tat trade measures.

China’s economic health can only benefit Germany as the Asian giant is a big buyer of Made in Germany. But a deal between the US and China effectively leaves Berlin as the main target of Trump’s campaign against foreign imports that he claims harm US national security.

The US leader had already singled Germany out for criticism, saying it had “taken advantage” of the US by spending less than Washington on NATO.

Underlining what is at stake, French Economy Minister Bruno Le Maire warned the US-China deal may come “at the expense of Europe if Europe is not capable of showing a firm hand.”

Nevertheless, Merkel can look to her carefully nurtured relationship with China over her 12 years as chancellor.

No Western leader has visited Beijing as often as Merkel, who will be undertaking her eleventh trip to the country.

In China, she is viewed not only as the main point of contact for Europe, but, crucially, also as a reliable interlocutor — an antithesis of the mercurial Trump.

Devoting her weekly podcast to her visit, Merkel stressed that Beijing and Berlin “are both committed to the rules of the WTO” (World Trade Organization) and want to “strengthen multilateralism.”

But she also underlined that she will press home Germany’s longstanding quest for reciprocity in market access as well as the respect of intellectual property.

Ahead of her visit, Beijing fired off a rare salvo of criticism.

China’s envoy to Germany, Shi Mingde, pointed to a “protectionist trend in Germany,” as he complained about toughened rules protecting German companies from foreign takeovers.

Only 0.3 percent of foreign investors in Germany stem from China while German firms have put in €80 billion in the Asian giant over the last three decades, he told Stuttgarter Nachrichten.

“Economic exchange cannot work as a one-way street,” he warned.

Meanwhile, looming over the battle on the trade front is another equally thorny issue — the historic Iran nuclear deal, which risks falling apart after Trump pulled the US out.

Tehran has demanded that Europe keeps the deal going by continuing economic cooperation, but the US has warned European firms of sanctions if they fail to pull out of Iran.

Merkel “hopes that China can help save the atomic deal that the US has unilaterally ditched,” said Die Welt daily.

“Because only the giant emerging economy can buy enough raw materials from Iran to give the Mullah regime an incentive to at least officially continue to not build a nuclear weapon.”