China Investment Corp. (CIC), the country's state-owned foreign
exchange investment firm, has no plans to buy a stake in the
US-based Citigroup, insiders with the firm said.
"Reports about CIC's possible purchase of Citigroup shares are
just a conjecture," Tuesday's China Securities Journal
quoted the insiders as saying. "Many have come to CIC hoping to get
our investment."
Experts suggested CIC select its investment targets cautiously,
especially since US financial institutions have been hit hard by
the sub-prime mortgage crisis.
Tan Yalin, a researcher with the global financial market
department under the Bank of China, said domestic investors must
remain alert to the US financial market and US-dollar assets as
foreign investors do.
Some experts, however, considered it a good opportunity for CIC
to invest at reasonable prices in overseas markets as international
finance institutions, affected by the sub-prime crisis, were in
dire need of capital to fill up their fund gaps and to expand
business.
CIC planned to invest US$70 billion in overseas markets, and
there was still about US$60 billion left to use.
In December, CIC reached an agreement with Morgan Stanley to
purchase US$5 billion in equity units convertible into common
shares of the second largest US investment bank.
It also invested US$3 billion in the US private equity firm
Blackstone Group, as well as US$100 million into the initial public
offering of the China Railway Group in Hong Kong.
CIC was set up in September with initial capital of US$200
billion from the country's massive foreign exchange reserve.
(Xinhua News Agency January 16, 2008)
