China - PBOC, CIC, SAFE, NSSF, Central Huijin, NDRC etc.

Re: CIC, SAFE & NSSF

Postby winston » Thu Sep 10, 2009 9:14 pm

So who is smarter here , the Buyer or Seller ? :?

==============================

Stansberry: The worst trade in the history of the U.S.
By Porter Stansberry in the S&A Digest:

Just when you think American finance can't possibly get any more bizarre...

Our government is now proposing to finance large-scale Chinese government purchases of U.S. real estate. No, I'm not making it up.

China Investment Corp. (CIC), China's $300 billion sovereign wealth fund, is considering buying huge swaths of distressed U.S. real estate, via the U.S. government-sponsored Public-Private Investment Program (PPIP).

PPIP, you may recall, was created to rid banks of toxic mortgage assets by luring private investors to buy the assets with financing from the U.S. government. CIC is in talks with BlackRock, Invesco, and Lone Star Funds about buying real estate assets – including commercial mortgage-backed securities. Because most of the equity in these buildings has disappeared, buying the debt and foreclosing is the easiest way to gain control of the real estate.

Just take a minute and think about this... First, for the last 20 years, we've filled China's coffers with our paper receipts (dollars). In exchange for several future generations of savings, we got cheap furniture, children's toys, and electronics we didn't deserve. Now, we're going to finance – with future generations of taxes – China's purchases of our trophy properties.

What can I tell you? I often feel like I'm the only sane man in a world gone mad. My wife tells me I'm the crazy one. But this? How will I possibly explain this to my children and grandchildren?
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
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Re: CIC, SAFE & NSSF

Postby winston » Mon Oct 12, 2009 9:09 am

UPDATE 1-China Huijin to continue buying big banks' shares

* ICBC, Bank of China, CCB say Huijin recently bought shares
* Huijin to buy shares in the three banks over next 12 months
* 236 bln A shares of ICBC to emerge from lock-up on Oct. 27 (Adds details)

By Samuel Shen and Edmund Klamann

SHANGHAI, Oct 12 (Reuters) - Central Huijin, an arm of China's sovereign wealth fund, will continue to buy yuan-denominated A shares in the country's three biggest listed banks over the next 12 months, the lenders said on Monday, offering fresh signs of government support for the stock market.

The agency, which is the parent company of Industrial and Commercial Bank of China (ICBC) (601398.SS) (1398.HK), Bank of China (601988.SS) (3988.HK) and China Construction Bank (CCB) (601939.SS) (0939.HK), also recently bought additional shares in the three on the Shanghai Stock Exchange, the banks said in separate statements.

Last month, the banks said Huijin had completed a year-long share-buying scheme introduced on Sept. 23, 2008 to bolster share prices and stem a stock market slump during the worst of the global financial crisis.

The revival of Huijin's share-purchase programme comes as 236 billion A shares of ICBC will become tradeable on Oct. 27 after a lock-up period expires, exerting pressure on a stock market which is down 16 percent from its August peak due in large part to pressure from new supplies of equity.

Chinese banks have extended record loans this year to support the government's 4 trillion yuan ($586 billion) stimulus plan but have been hit by thinner profit margins due to stiff competition.

Huijin recently bought 30 million ICBC shares, increasing its stake to 35.42 percent from 35.41 percent, ICBC said on Monday.

Huijin has also bought 5.1 million shares in Bank of China, increasing its stake to 67.5 percent, and 16.1 million shares in CCB, increasing its holding to 57.09 percent.

http://www.reuters.com/article/marketsN ... 12?rpc=611
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Re: CIC, SAFE, NSSF & Central Huijin

Postby winston » Wed Oct 28, 2009 7:11 pm

China CIC has invested half of cash, returns 'not bad'

* Ramped up investments from Q2, judging mkts stabilised
* More money into commodities, infrastructure, real estate
* Hedging vs long-term inflation, fall in major currencies

BEIJING - China's sovereign wealth fund has invested about half of its US$110 billion in available funds, mainly in publicly traded assets, and has enjoyed 'not bad' returns so far this year, its chief said on Wednesday.

Lou Jiwei, chairman of China Investment Corp (CIC), said CIC was seeking financial returns, not control over the companies in which it invested.

'There are lots of doubts about us in the outside world, and some say we have a national agenda. Our strategy is to seek long-term risk-adjusted returns. In short, to make money,' he said. 'Now, there's a chance to do that.'

CIC was set up in September 2007 with US$200 billion transferred from the central bank's foreign exchange reserves and by the end of 2008 its assets had increased to US$298 billion.

CIC used a big chunk of its initial capital to buy the state's majority stakes in a trio of big banks. It now had US$110 billion in freely investable funds, Mr Lou said.

'We've now invested almost half, and for now the return is not bad,' he told the Tsinghua Management Global Forum. 'But I daren't say that it will still be good at the end of the year.'

CIC held most of its funds in cash last year as global markets slumped, but Mr Lou said the fund concluded by the second quarter of this year that the markets had stabilised.

Judging that the downward risks were very small when set against potential returns, CIC duly ramped up its investments.

Mr Lou said CIC was investing mainly in publicly traded assets via external fund managers. But as CIC gained experience, it might manage more of this part of its portfolio in house.

CIC had put more money into commodities, real estate and infrastructure to hedge against the risks of medium- and long-term inflation and of a fall in major currencies, he added.

Turning to CIC's direct investments in sectors such as mining, energy and real estate, Mr Lou said: 'At present, the returns are fairly good. But who knows about the future.'

Underlining again that CIC seeks to maximise its investment returns and not to secure commodities as part of a national agenda, he said, 'I don't care how many tonnes of oil we can ship back, but I care whether the shares are valuable.'

Source: REUTERS
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Re: CIC, SAFE, NSSF & Central Huijin

Postby winston » Thu Dec 17, 2009 12:36 pm

DJ China Pension Fund To Raise Foreign Investment To 20% Of Assets

SHANGHAI (Dow Jones)--China's national pension fund plans to increase the proportion of overseas investments in its total assets to 20%, the maximum allowed by the government, from 7%, said National Social Security Fund Chairman Dai Xianglong.

Dai said the plan is part of an adjustment of the fund's asset allocation, but didn't give a time frame. He made the comments in a speech at a pension fund forum in Bangkok in November, a transcript of which was posted on the fund's Web site Dec. 10.

The fund plans to moderately reduce holdings in fixed-income products, maintain the proportion of its equity investments, and broaden the range of its investments in unlisted foreign companies and in private equity, Dai said.

As of the end of September, the fund had CNY678 billion ($99.3 billion) worth of assets under management, of which fixed-income investments accounted for 45%, domestic and foreign stocks 30%, private-equity investments 20%, and cash 5%, Dai said.

The fund's investment income totaled CNY55.6 billion in the January-September period, a return of 9.84%, he added.

Source: Joy C. Shaw and Patricia Ho, Dow Jones Newswires
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Re: CIC, SAFE, NSSF & Central Huijin

Postby millionairemind » Mon Feb 08, 2010 2:28 pm

CIC reveals US equity holdings
(China Daily/Agencies)
Updated: 2010-02-08 09:52

CIC reveals US equity holdings

Lou Jiwei, chairman of China Investment Corp, attending the Asian Financial Forum in Hong Kong last month. The sovereign wealth fund, based in Beijing, has reportedly begun stockpiling cash in US money-market funds. [Agencies]

Sovereign wealth fund owned stocks valued at more than $9 billion according to latest disclosure

China Investment Corp (CIC), a $300 billion sovereign wealth fund based in Beijing, filed its first quarterly disclosure on US equity holdings, reporting that it owned stocks valued at $9.63 billion as of Dec 31.


The fund last Friday filed what's known as a Form 13F, which the US Securities and Exchange Commission requires from all institutional investment managers with more than $100 million of US equities. Other sovereign wealth funds have begun filing such reports amid calls for more disclosure.

CIC, created in September 2007 through a $200 billion allocation of China's reserves, began stockpiling cash in US money-market funds after initial investments in companies such as Morgan Stanley and BlackRock Inc declined in value. The filing last Friday shows that CIC has resumed investing in US equities, primarily through index funds rather than individual stocks.

"China is diversifying among different US dollar-denominated assets," said Rachel Ziemba, a senior analyst at Roubini Global Economics LLC in New York, which researches sovereign wealth funds. "What we are seeing is a way to quickly gain exposure to these markets rather than doing a lot of due diligence" on individual companies.

China, the biggest foreign holder of US government debt, trimmed its holdings of Treasuries by $9.3 billion to about $789.6 billion during November, the largest cut in five months. CIC invested about $10 billion in commodity producers worldwide during the second half of last year, according to data compiled by Bloomberg.

The SEC requires managers to report all holdings in stocks that trade on US exchanges, as well as options and convertible debt. The reports must be filed within 45 days of the end of each quarter.

According to CIC's report, three previously disclosed investments now comprise about 63 percent of its US holdings. These include a $1.77 billion stake in Morgan Stanley, the New York-based securities firm; a $3.54 billion interest in Teck Resources Ltd, Canada's largest diversified mining company; and $714 million of stock in BlackRock, a New York firm that is the world's largest money manager.

The filing shows that CIC has been buying exchange-traded funds that track stock indexes, economic sectors and commodity prices, such as the SPDR Gold Trust. Its ETF holdings, including about 4.1 million shares in each of the iShares S&P Global Materials Index Fund and the Energy Select Sector SPDR Fund, had a market value of $2.4 billion on Dec 31, according to the filing. That equaled about 25 percent of assets reported in the Form 13F.

The Chinese fund disclosed that it made investments valued at $31 million or less in banks including San Francisco-based Wells Fargo & Co, Citigroup Inc in New York and Bank of America Corp, based in Charlotte, North Carolina. The wealth fund also owned $11 million of equity units issued by New York-based insurer American International Group Inc in July 2007.

CIC in December 2007 agreed to buy $5.6 billion of Morgan Stanley equity units that are currently convertible into 116 million common shares, according to the bank's most recent quarterly report.

The wealth fund, which has yet to convert the equity units, bought 45.3 million Morgan Stanley common shares last June, the quarterly report said.

According to December regulatory filings, CIC had put cash in money-market funds run by Legg Mason Inc, Goldman Sachs Group Inc and Invesco Aim Advisors Inc.
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Re: CIC, SAFE, NSSF & Central Huijin

Postby millionairemind » Tue Feb 09, 2010 2:10 pm

China Becomes Oil ETF’s No. 4 Holder, Buys SPDR Gold Trust
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By Christian Schmollinger and Kyoungwha Kim

Feb. 9 (Bloomberg) -- China Investment Corp., the nation’s sovereign wealth fund, joined Goldman Sachs Group and Morgan Stanley & Co. in investing in the U.S. Oil Fund, an exchange- traded crude-futures fund.

China Investment became the fourth-largest holder in the Oil Fund by buying 2 million shares, equal to 3.48 percent of the outstanding units, with a value of $78.6 million, according to a Securities and Exchange Commission 13-F filing posted on Feb. 5. It also took a 1.45 million share stake, or 0.4 percent of the total, in the SPDR Gold Trust worth $155.6 million.
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Re: CIC, SAFE, NSSF & Central Huijin

Postby millionairemind » Wed Jul 07, 2010 7:57 am

Jul 7, 2010
China may strip SWF



BEIJING - CHINA is considering stripping the country's US$300 billion (S$418 billion) sovereign wealth fund (SWF) of banking stakes to help it get around some United States investment restrictions, a report said yesterday.

The proposal would mean China Investment Corp (CIC) would no longer be responsible for holding the state's majority stakes in China's largest banks, the Financial Times reported, citing unnamed sources.

It would end CIC's status as a bank holding company in the eyes of the US Federal Reserve and free the Chinese wealth fund of certain restrictions when making investments, the report said.

CIC is believed to be targeting equities, bonds and real estate deals in the US market, it said.

The wealth fund currently holds shares in China's major lenders, securities firms and insurers through its domestic investment arm Central Huijin, which was set up in 2003 and transferred to CIC upon its creation in 2007.

CIC was established to invest some of China's massive foreign exchange reserves - which stood at US$2.447 trillion at the end of March - overseas, partly to gain better returns. -- AGENCE FRANCE-PRESSE, REUTER
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Re: CIC, SAFE, NSSF & Central Huijin

Postby millionairemind » Wed Aug 18, 2010 8:56 am

China Doubles Korea Bond Holdings as Asia Switches From Dollar
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By Frances Yoon

Aug. 18 (Bloomberg) -- China more than doubled South Korean debt holdings this year, spurring the notes’ longest rally in more than three years, as policy makers shifted part of the world’s largest foreign-exchange reserves out of dollars.

Korean Treasury bonds held by Chinese investors rose 111 percent to 3.99 trillion won ($3.4 billion) in the first half of the year, according to data from the Seoul-based Financial Supervisory Service. China should diversify into Asian assets to “stabilize returns and reduce risks,” said Ding Zhijie, a former adviser to China’s sovereign wealth fund.

“It’s the right direction for China to allocate some of its reserves to financial assets in major Asian economies,” Ding, dean of finance at Beijing’s University of International Business and Economics, said in an Aug. 16 interview. “The significance of both the dollar and euro has declined because of the global financial crisis and the European debt crisis, while the role of some emerging-market currencies rose.”

The purchases accounted for 19 percent of foreign inflows, up from 10 percent last year, and Societe Generale SA predicts they will spur further bond-market gains. China’s holdings of South Korean notes account for little more than 0.1 percent of its $2.45 trillion reserves the increase in the first six months compares with $20.1 billion pumped into Japanese debt.

“At this rate China may buy about 4 trillion won of KTBs by year-end, and that’s a big deal,” said Christian Carrillo, the Tokyo-based head of fixed-income strategy at SocGen, France’s second-biggest bank. “That will be bullish for the market. It’ll create a severe demand-supply imbalance in the KTBs, pushing yields to fall even more aggressively.”

Bond Returns

KTBs have handed investors a 5.6 percent return this year in dollar terms, delivering a profit every month, according to an index compiled by HSBC Holdings Plc. The advance marks the best winning streak since March 2007. U.S. Treasuries have gained 7.9 percent, according to the Bank of America Merrill Lynch U.S. Treasury Master Index.


Diversification should be the “basic principle” of reserve management, Yu Yongding, a former adviser to the People’s Bank of China, said in an interview this month. China’s holdings of Treasuries fell 6 percent in the first half to $843.7 billion, Department of Treasury data released this week show.

Asian central banks holding about 60 percent of the world’s foreign-exchange reserves are cutting their U.S. dollar assets. South Korea, Malaysia and India reduced their holdings of Treasuries, the data show. Allocations to dollars in official reserves fell in the first three months of the year, to 61.5 percent from 62.2 percent in the final quarter of 2009, the International Monetary Fund said June 30.

‘Safe Haven’

The value of KTBs owned by China totaled 1.87 trillion won on Dec. 31, up from 79.6 billion at the end of 2008, FSS data show. Foreigners’ total holdings increased by 18.6 trillion won in 2009 and climbed 11.3 trillion won to 67.8 trillion won in the first half. That’s equivalent to 6.3 percent of South Korea’s outstanding government debt.

“The number of long-term investors who view Korean bonds as a new safe haven has increased,” Kim Jung Kwan, director of the Ministry of Strategy and Finance’s government bond policy division, said in an interview last month. “Korean bonds are attractive in yields and liquidity, as well as for diversification purposes.”

South Korea’s benchmark three-year bonds yielded 3.75 percent yesterday, the lowest in two months, while the rate on similar-maturity U.S. debt was 0.78 percent. Dollar-denominated returns may be boosted by gains in the won, which will strengthen 3 percent to 1,140 versus the greenback by the end of the year, according to the median estimate of 20 analysts surveyed by Bloomberg.

“Higher yields offered by KTBs and potential won appreciation would offer an attractive alternative to U.S. Treasuries for China,” said Matthew Huang, a Singapore-based fixed-income analyst at Barclays Capital Plc. “Their total holdings are a drop in the pond relative to their total reserves.”
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Re: CIC, SAFE, NSSF & Central Huijin

Postby millionairemind » Wed Aug 25, 2010 8:33 am

Published August 25, 2010

Strong demand for Huijin's 7-year bond sale

The result would bode well for other planned issuances by Huijin


(SHANGHAI) Central Huijin Investment Co auctioned seven-year bonds in China's interbank market yesterday at a coupon well below forecasts, reflecting strong demand for the issuer's high credit standing amid ample liquidity.

The result would bode well for other planned issuances by Huijin, the largest shareholder of China's state-controlled banks and is also the domestic investment unit of China's US$300 billion sovereign wealth fund.

Yesterday's auction is part of a series of 187.5 billion yuan (S$37.5 billion) of bonds to be sold in the next few months, with the funds raised to replenish capital of the country's big banks.

Huijin auctioned 20 billion yuan of the bonds at a coupon of 3.16 per cent, below market forecasts that had centred around 3.27 per cent and that ranged from 3.2 to 3.4 per cent.

The bid-to-cover ratio was 3.16 times, higher than other bond sales by the finance ministry so far this year.

The result was 11 basis points below Monday's indicative secondary market yield of 3.2720 per cent bid for seven-year financial bonds issued by policy banks, according to Reuters Reference Rates.

Traders said demand was strong partly because of persistent doubts on the global economic recovery that may result in loose monetary policy in the foreseeable future, keeping money market liquidity ample.

'The big four major banks all showed surprisingly strong support at today's auction,' said a trader at a domestic bank in Beijing.

Huijin also auctioned 20 billion yuan of 20-year bonds yesterday at a coupon of 4.05 per cent, near the low end of market forecasts that had centred around 4.12 per cent and ranged from 4 and 4.2 per cent.

The bid-to-cover ratio was a strong 2.71 times.

Other traders said Huijin had also pressured some banks, some of which are partly owned by Huijin, to support the auction.

That may mean the strong result was not entirely market-driven and that if liquidity becomes tighter down the road, it may not be able to attract such strong demand.

The bonds have been classified as risk-free, but traders had initially expected Huijin to pay slightly more on its bonds than policy banks to compensate for its poorer liquidity given its relatively smaller supply.

The inaugural issue can be increased if demand proves strong via a greenshoe option of six billion yuan for the seven-year issue and eight billion for the 20-year portion.

It was not immediately known if the options were exercised. -- Reuters
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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Re: CIC, SAFE, NSSF & Central Huijin

Postby LenaHuat » Mon Feb 14, 2011 9:32 pm

CIC opens its first foreign office in Toronto today. China is targeting more Canadian resources, so soon after acquiring stakes in oil sands :!:
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