Wednesday December 3, 07:27 AM
China Investment Corp to avoid new investment in foreign financial cos - UPDATE
HONG KONG (XFN-ASIA) - Sovereign (LSE: SOGP.L - news) wealth fund China Investment Corp (CIC (Paris: FR0005025004
- news) ) will avoid making new investments in foreign financial firms for the time being, the fund's chairman Lou Jiwei said.
'We don't have the guts to make further investments in foreign financial institutions now, as we do not know whether or when they will collapse,' Lou said in Hong Kong.
Developed markets are currently a difficult environment, with governments seeking to rescue creditors while leaving investors on their own, Lou said.
CIC's overseas financial sector investments include Blackstone Group, Morgan Stanley (NYSE: MS - news) and Visa, which are expected to have generated huge unrealized losses for the fund during the late-2008 market collapse.
Lou added CIC will continue to explore overseas investment opportunities, and is looking particularly to diversify into emerging markets.
Referring to calls for to do more to help prop up the global financial system, Lou said China cannot independently take the lead on such initiatives at a time when its investment companies are more cautious about their overseas activities.
(1 usd = 7.8 hkd)
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