No no. Sentiment will turn against today’s saviours
From the Financial Times:
Turmoil in the global markets leaves a gaping financial hole. A sovereign wealth fund piles in at short notice to fill the gap, ending up with a 10 per cent stake in one of the world’s biggest companies. Sound familiar?
Of course it does. But this is not a description of the US mortgage meltdown forcing UBS to sell a 9 per cent stake to the Singapore Government to replenish its Tier 1 capital. Nor is it Abu Dhabi’s $7.5bn investment in Citigroup.
Rather, it refers to the Kuwait Investment Office – which snapped up 10 per cent of British Petroleum when the UK government spectacularly mistimed its share sale to coincide with the 1987 stock market crash. And it gives a hint of the political risks in store for today’s sovereign funds as they deploy their enormous fire-power.
As through which we have been: We all seem to have forgotten the furore over P&O’s buying-out by Dubai Ports World, and our discovery that we’d rather push around foreign companies in foreign countries than just look after our own damn ports. No reason why this will be different (except, possibly, for Abu Dhabi – there was an interesting story in yesterday’s Wall Street Journal about their State debt, but I can’t find it now).
The article is quite good. It’s also a reminder that I should probably consider giving up teaching and try being paid just to have opinions and write them down.