Chinese funds invest in some top US firms
The Asian country tries to diversify its foreign currency holdings
Martes, 9 de Febrero de 2010
BY DAVID BARBOZA
AND KEITH BRADSHER
The New York Times
SHANGHAI – Flush with cash despite the global economic downturn, China’s sovereign wealth fund quietly snapped up more than $9 billion worth of shares last year in some of the biggest American corporations, including Morgan Stanley, Bank of America and Citigroup.
Although most of the stakes were small, China Investment Corp., the government’s $300 billion investment fund, now owns stock in some of the best-known American brands, including Apple, Coca-Cola, Johnson & Johnson, Motorola and Visa.
The detailed list, which contained holdings totaling $9.6 billion as of Dec. 31, was disclosed Friday in a filing with the U.S. Securities and Exchange Commission; it lists stakes only in companies traded in the United States.
The filing offers a glimpse of how China is trying to diversify its more than $2 trillion in foreign currency holdings with stock, rather than investing almost entirely in U.S. Treasury bonds and other debt securities issued by governments and by government-sponsored enterprises like Fannie Mae.
Prime Minister Wen Jiabao of China and other officials have repeatedly expressed worry about how the country’s holdings of U.S. Treasury securities could be hurt by inflation or by mounting U.S. debt. By buying the securities of international companies, China is trying to spread its fast-growing wealth more widely. It is also seeking to acquire strategic stakes in companies that could feed its hungry economy with a wide range of commodities.
C.I.C., already one of the world’s largest sovereign funds, was formed in 2007 with about $200 billion. It now has assets of nearly $300 billion and, according to state-run news media, is expecting another large injection of funds.
Analysts said the filing showed that the fund had invested only a small portion of its $300 billion in American stocks, and the fund seemed to be following a cautious strategy to diversify globally after initially having put its biggest investments into shoring up the capital of Chinese banks.
“This is still a relatively small amount compared to the total size of the fund,” said Chang Chun, a professor of finance at the China Europe International Business School in Shanghai.
The sovereign wealth fund got off to a rocky start in 2007 and early 2008 by acquiring a $3 billion nonvoting stake in the American private equity firm Blackstone and paying another $5 billion for a 9.9 percent stake in Morgan Stanley. Shares of both companies plummeted in 2008 during the financial crisis, leading to a storm of criticism directed at C.I.C. But analysts say the fund performed well in 2009, particularly because it was buying aggressively as the market recovered.
Exactly when C.I.C. bought the shares of various companies was not disclosed in the filing. And C.I.C.’s acquisition of nonvoting units of Blackstone and its early stake of preferred shares in Morgan Stanley are not listed in the filing. The Blackstone and Morgan Stanley stakes are not listed, apparently because they are not traded equities. The filing indicates that C.I.C. owns about $19 million worth of Bank of America stock, close to $30 million worth of Citigroup shares and about $333 million worth of shares in Visa, as well as holdings in various index funds.
The fund’s largest listed holdings were $1.7 billion worth of shares in Morgan Stanley and nearly $650 million worth of shares in BlackRock, the New York money management fund.
The Morgan Stanley stake was acquired last June, when the investment bank issued about $2.2 billion worth of common shares to help repay the U.S. government under the Troubled Asset Relief Program.
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