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Soveriegn Wealth Funds

Written by A Forex View From Afar on Tuesday, January 01, 2008

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Morgan Stanley became the third top bank in a month to raise capital from a sovereign wealth fund after announcing higher-than-expected writedowns of $9.4bn because of subprime losses.
John Mack, chief executive, said that the $5bn capital injection from China Investment Corporation would bolster its balance sheet and strengthen its deep ties in China. It is the second Wall Street bank to find a big Chinese investor, following in the footsteps of Bear Stearns.
China’s newly formed sovereign wealth fund, which earlier this year paid $3bn for 10 per cent of Blackstone, the US private equity group, will get a stake of up to 9.9 per cent in Morgan Stanley.
Morgan Stanley does not foresee any political or regulatory concerns about the investment. The deal underlines the growing importance of sovereign wealth funds in the Middle East and Asia, and their increasingly bold moves to take advantage of the need for capital among western financial institutions.

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Fundies and Trading
There is a constant question from some traders as to why anybody would ever need to consider the ‘F’ word when trading. Fundamentals: what is so damaging at looking at both Technical charts and having a Fundamental filter to gauge how many Lots to put on? Why is it that accepting that Technicals give us price points to trade, but Fundamentals determine the direction that we travel is so difficult for some traders to accept? Without a Fundamental Filter very few pure Technical traders would have seen this Dollar move coming today.

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