China Investment Corp. (CIC), the country's state-owned foreign exchange investment firm, has no plans to buy a stake in the U.S.-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 U.S. 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 U.S. financial market and U.S.-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 70 billion U.S. dollars in overseas markets, and there was still about 60 billion U.S. dollars left to use.
In December, CIC reached an agreement with Morgan Stanley to purchase 5 billion U.S. dollars in equity units convertible into common shares of the second largest U.S. investment bank.
It also invested 3 billion U.S. dollars in the U.S. private equity firm Blackstone Group, as well as 100 million U.S. dollars into the initial public offering of the China Railway Group in Hong Kong.
CIC was set up in September with initial capital of 200 billion U.S. dollars from the country's massive foreign exchange reserve.
Source:Xinhua
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