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Sovereign Wealth Funds: The New Deep Pockets By Sean Brodrick in New Issue of Money and Markets
Jupiter, Fla. (PRWEB) November 22, 2007 -- Sean Brodrick takes a look at sovereign wealth funds and the potential these funds hold. Mr. Brodrick discusses the reasons why these funds could be worth examining.
Sovereign wealth funds (SWFs) are large investment funds controlled by countries as diverse as Russia, China and the Middle East oil sheikdoms that are being used to plow huge foreign reserves into other areas such as natural resources.
China is sitting on $1.43 trillion of foreign exchange reserves. It's already put about $205 billion of that into an SWF. And now they're casting hungry eyes on companies that supply the natural resources they need. But China isn't even one of the biggest SWF funds. Among the largest sovereign funds are a Norwegian fund with $330 billion and a Saudi Arabian fund with $300 billion. The leading SWF is the United Arab Emirates' fund with $875 billion in assets!
All told, sovereign wealth funds represent a pool of nearly $3 trillion today. Not only is that more than the $1.5 trillion in private equity firms, but the amount of cash and assets in SWFs could rise to $8 trillion within the next five years. Some analysts estimate that by 2010, thanks in part to swelling oil revenues, sovereign wealth funds could have about $17 trillion.
There's no guarantee what exactly sovereign wealth funds will buy, but it looks like natural resources could be front and center. That will create even more competition for big companies, which are looking to expand at a quick pace.
"Natural Resources to pay close attention to:
? Gold: This year, gold mine production actually went down. Next year it's likely to go up but demand from both jewelers and investment funds is red-hot. ETF demand for gold soared 617% in the third quarter. Combined with growing demand for gold jewelry in China, India and the Middle East, this could easily take up all the gold that mines can supply.
? Platinum: Platinum mines have experienced a rash of shutdowns due to safety concerns, and that's not likely to change next year. The world's third-largest producer, Lonmin, has already indicated that production will fall short of this year's targets. End result: Platinum prices could soar.
? Uranium: While production is forecast to rise 18% next year, one uranium miner after another has come forward this quarter to announce disappointing results. Next year should be no different.
? Copper: Although this industrial metal was in short supply in 2007, that's supposed to reverse in 2008. However, big mines in South America are rumored to be shutting down for one reason after another and projects in Africa are dogged by delays.
? Nickel: Nickel was in a 30,000 metric tonne surplus this year, and nickel mining stocks still marched higher. With China's steel production quadrupling in the past four years, nickel demand is only going to become more acute, and some experts expect a 5,000-tonne deficit next year. Nickel stocks could be on the launch pad, " Mr. Brodrick states.
To read this issue online, please visit: http://www.moneyandmarkets.com/Issues.aspx?NewsletterEntryId=1211
About SEAN BRODRICK & MONEY AND MARKETS
Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research's small-caps specialist, especially in natural resources, and is the editor of the company's Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.
Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world's leading publisher of offshore asset protection strategies and global investment opportunities.
Recognized for his expertise on Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada's premiere financial websites, HoweStreet.com. His report, "70 Days to Empty," has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by The Daily Reckoning as "the most important report you're likely to read this year," while his knowledge of uranium has helped investors earn solid gains on the commodity.
Mr. Brodrick holds a B.A. degree from the University of Maine.
Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.
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This press release has been reprinted from PRWEB per the terms and conditions of the copyright notice.
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