D
Dubaiya Bush
Guest
Governments Get Bolder in Buying Equity Stakes
http://online.wsj.com/article/SB118523825903875664.html?mod=home_whats_news_us
Foreign governments, flush with cash and no longer content with
the meager returns to be had on safe but low-yielding investments
like Treasurys, are becoming increasingly aggressive players on the equity front.
As a result, governments are treating these reserves less like
rainy-day funds and more like pools of investment capital.
Sameer Al Ansari, executive chairman and chief executive officer of
state-back investment firm Dubai International Capital, says he is
scouring the world's 500 largest publicly traded companies looking for
a place to invest as much as $10 billion. His next target:
a U.S. company that he has already identified but will
only describe as "a household name."
Mr. Ansari says Dubai International, which has $6 billion under
management, is hoping to announce the U.S deal in September.
His company bought a major stake in London-based HSBC Holdings PLC
earlier this year, and this month bought 3% of Airbus maker
European Aeronautic Defence & Space Co. and 3% of India's ICICI Bank Ltd.
The new wave of investment carries numerous risks. Most obvious is
the potential for political backlash. Political pressure to block or
restrict these investments appears to be mounting.
In the U.S., a Dubai company's deal last year to buy a British
ports operator that operated several American ports ran into
political obstacles, as did a 2005 attempt by Chinese oil company
Cnooc Ltd. to buy U.S. oil producer Unocal Corp. Dubai Ports World
ultimately agreed to sell off the U.S. holdings, and Cnooc pulled
out of the Unocal bidding.
Others have been more outspoken. Ms. Merkel's powerful conservative
colleague Roland Koch, governor of the German state of Hesse,
has warned in stark terms about encroachment by industrial groups
such as Russia's OAO Gazprom, as well as financial investors
controlled by China and other emerging economies. "We haven't only
recently gone through the trouble of privatizing companies like
[Deutsche] Telekom and Deutsche Post so that the Russians can
nationalize them again," he told German media.
Even the idea of such sales could inflame nationalist passions,
as occurred last year when there were riots in Thailand following
Temasek's attempt to buy Thai telecommunications provider Shin Co
http://online.wsj.com/article/SB118523825903875664.html?mod=home_whats_news_us
Foreign governments, flush with cash and no longer content with
the meager returns to be had on safe but low-yielding investments
like Treasurys, are becoming increasingly aggressive players on the equity front.
As a result, governments are treating these reserves less like
rainy-day funds and more like pools of investment capital.
Sameer Al Ansari, executive chairman and chief executive officer of
state-back investment firm Dubai International Capital, says he is
scouring the world's 500 largest publicly traded companies looking for
a place to invest as much as $10 billion. His next target:
a U.S. company that he has already identified but will
only describe as "a household name."
Mr. Ansari says Dubai International, which has $6 billion under
management, is hoping to announce the U.S deal in September.
His company bought a major stake in London-based HSBC Holdings PLC
earlier this year, and this month bought 3% of Airbus maker
European Aeronautic Defence & Space Co. and 3% of India's ICICI Bank Ltd.
The new wave of investment carries numerous risks. Most obvious is
the potential for political backlash. Political pressure to block or
restrict these investments appears to be mounting.
In the U.S., a Dubai company's deal last year to buy a British
ports operator that operated several American ports ran into
political obstacles, as did a 2005 attempt by Chinese oil company
Cnooc Ltd. to buy U.S. oil producer Unocal Corp. Dubai Ports World
ultimately agreed to sell off the U.S. holdings, and Cnooc pulled
out of the Unocal bidding.
Others have been more outspoken. Ms. Merkel's powerful conservative
colleague Roland Koch, governor of the German state of Hesse,
has warned in stark terms about encroachment by industrial groups
such as Russia's OAO Gazprom, as well as financial investors
controlled by China and other emerging economies. "We haven't only
recently gone through the trouble of privatizing companies like
[Deutsche] Telekom and Deutsche Post so that the Russians can
nationalize them again," he told German media.
Even the idea of such sales could inflame nationalist passions,
as occurred last year when there were riots in Thailand following
Temasek's attempt to buy Thai telecommunications provider Shin Co