CIC to invest US$66.7 bln in overseas equity markets

Sep. 1, 2008 (China Knowledge) - China Investment Corp (CIC), China's US$200 billion sovereign fund, plans to embark US$66.7 billion or one third of its total assets for investment in offshore equity markets, with Japan as its first target, sources reported.

According to the sources, CIC expects to invest in Japanese equity market by March, and is now in talks with Japanese banks on yen-backed transaction accounts. CIC is looking to buy minority stakes, particularly in resource-related companies and firms with strong environment protection technologies.

CIC is investing in diverse companies and financial institutions as China seeks to improve returns on its massive foreign-exchange reserves.

In July, media reported that CIC was in talks with HSBC Holdings Plc<5><HBC> on buying the latter's shares on the open market.

To date, the company has conducted four major investments, including US$3 billion in U.S. private equity company Blackstone's IPO, 9% stakes in Morgan Stanley, US$200 million in Visa IPO, and US$100 million in China Railway Group's<601390><390> Hong Kong IPO. The former two transactions have bought big losses to CIC as the U.S. credit crisis had triggered a slump in Wall Street, while the latter two helped CIC gain handsome profit.