Adia's wealth to surge by $30bn this year: IIF

World's largest sovereign wealth fund's coffers are projected to swell as asset value increases.

Post-crisis recovery of international markets boosted the assets of the Abu Dhabi Investment Authority (Adia) by nearly $50 billion (Dh183bn) in 2009 and the wealth is projected to swell further by $30bn this year, according to a key Western financial organisation.

The rebound in the assets of Adia, ranked the world's largest sovereign wealth fund, follows a loss of about $45bn during 2008 because of the global fiscal distress in September that year, the Institute of International Finance (IIF) said.

From about $310bn at the end of 2008, Adia's wealth surged to about $360bn at the end of 2009 and is forecast to climb to $390bn at the end of 2010. The assets are projected to continue their ascent to reach an all time high of $430bn at the end of 2011.

Adia's assets, based mostly in equity, bonds and other investments in the West, had steadily climbed during the last oil boom of 2002-2008 before they tumbled at the end of 2008 because of market losses.

Its assets stood at about $355bn at the end of 2007, nearly double their level of $185.7bn at the end of 2004, showed the report by the Washington-based IIF.

The IIF's estimates are below those by the United States Council on Foreign Relations (CFR), which put Adia financial resources at about $453bn at the end of 2007 and $328bn at the end of 2008.

CFR put Adia's market losses at about $183bn through 2008, but estimated net cash inflow at $509bn, mostly from the country's hydrocarbon exports that hit a record high of more than $90bn in 2008 because of a sharp increase in crude prices and output.

IIF gave no reason for the increase last year and the expected rise in 2010-2011, but noted that the improvement in oil prices would sharply boost the country's hydrocarbon revenues this year and in 2011.

The financial organisation estimated those earnings at nearly $58.1bn in 2009 and projected them to soar to $72.9bn in 2010 and about $78.1bn in 2011.

The IIF report assumed oil prices at an average $75.5 a barrel this year and $80 in 2011 compared with $61.8 in 2009.

It also expected the UAE's oil production to rebound to around 2.34 million barrels per day this year and 2.41 million barrels per day in 2011 compared with an average 2.28 million barrels per day in 2009.

The slump in oil prices in 2009 from their peak of $95 per barrel allied with lower crude production by the UAE to depress its fiscal surplus to only Dh3bn last year from a record Dh197bn in 2008, IIF said.

It put total revenue in the UAE's consolidated financial account (CFA), which covers the federal budget and spending by each emirate, at around Dh292bn and expenditure at Dh289bn in 2009.

 

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