CIC denies buying a stake in ANZ Group - ResearchInChina

Date:2007-12-26liaoyan  Text Size:
CHINA Investment Corp, the US$200 billion fund that last week invested US$5 billion in Morgan Stanley, has denied it bought a stake in the Australia & New Zealand Banking Group, Bloomberg News reported today.

"We didn't buy any stake," Lou Jiwei, chairman of Beijing-based China Investment, said at a press event without elaborating. He also denied buying a stake in China Petroleum & Chemical Corp.

The central government is loosening restrictions on overseas investment to counter inflows from a record trade surplus that has driven up local stock and property prices. Investing more money abroad will help cool the world's fastest-growing major economy and diversify risk for China's more than US$1.4 trillion of foreign-exchange reserves, the world's largest.

Lou said on November 29 that CIC "wants to be a stabilizing force in the international capital markets." He cited a "recent example" in which a similar fund invested in a financial firm that had subprime losses, without elaborating.

Abu Dhabi Investment Authority agreed in November to buy a US$7.5-billion stake in Citigroup Inc, helping the biggest United States-based bank by assets to bolster capital eroded by credit-market losses. China Investment, which began operations in September, was set up to help improve returns on the nation's reserves and to oversee bailouts of the nation's own lenders.

Chen Yuan, president of state-owned China Development Bank, today urged Chinese financial companies to increase investments abroad. He spoke at the same event as China Investment's Lou.

State-run investment funds will grow to a combined US$7.9 trillion from US$1.9 trillion as currency reserves accumulate in countries including China and Russia, Merrill Lynch economists wrote in an October 12 report. Abu Dhabi's investment followed purchases by U.A.E. fund Dubai International Capital LLC in companies including London-based HSBC Holdings Plc, Europe's biggest bank by market value.
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