National Wealth Funds Go on Buying Spree
Aside from the debacle in the credit markets, one of the major financial news stories of 2007 has been the mammoth acquisitions by investment vehicles controlled by governments in the Middle East and Asia.
Flush with cash from he economic boom in the emerging markets and the sale of petroleum, these sovereign wealth funds have poured an estimated $45 billion into a range of companies and assets around the world this year alone. Recent purchases include a five percent share in Citigroup for $7.5 billion by the emirate of Abu Dhabi and a nine percent stake in Swiss financial giant UBS by the government of Singapore and a group of Middle East Investors for $11.5 billion.
The size of these acquisitions raises concerns about potential manipulation of the financial markets and the impact of foreign ownership of domestic companies. On the other hand, some view these investments as strengthening economies and creating employment. Click here for an overview of this topic from MarketWatch.com.