China’s sovereign wealth fund has taken a stake in Visa according to a media report on Tuesday, moving back into the market as Beijing agonizes over whether to be more aggressive in its overseas investments.
China’s sovereign wealth fund has taken a stake in Visaaccording to a media report on Tuesday, moving back into the market as Beijing agonizes overwhether to be more aggressive in its overseas investments.
Scarred by big paper losses thatChina Investment Corp (CIC), the wealth fund, and China Development Bank havesuffered on investments they made last year, some policy makers are counselingcaution, saying Chinastill lacks expertise.
CIC, which separately manages $200billion, invested more than $100 million in Visa’s initial public offering lastweek, Caijing magazine reported onits Web site.
But others scent that a meltdownin U.S.financial stocks and the depressed sale of investment bank Bear Stearns affordsgovernment and state-owned banks and firms opportunities to bargain shop.
“Because of the subprimecrisis, the value of financial assets in the United States has fallen to a more reasonable range, whichcreates a fairly good opportunity for Chinato invest,” said Li Ruogu, president of Export-Import Bank of China in aReuters story.
In an article to be published inthe International Economic Review, aBeijing academic journal, Li said China urgently needed to invest abroad todiversify its huge foreign exchange reserves, which exceeded $1.6 trillion atthe end of February.
