Sovereign wealth fund stung by markets

08:57, June 10, 2010      

Email | Print | Subscribe | Comments | Forum 

China's massive sovereign wealth fund announced Tuesday a 10 pecent mark-to-market loss and said it was waiting for fresh money from the government, the Wall Street Journal reported.

"In May and June, because of the volatility of the US and European markets, we had about 10 percent mark-to-market losses," Jesse Wang, executive vice president and chief risk officer of China Investment Corporation, said at an event in San Francisco.

China Investment Corporation (CIC), also known as China's sovereign wealth fund, manages nearly $300 billion in foreign exchanges.

According to its annual report, the fund gained 11 percent in 2009. "But this year will be tough," Wang said. "CIC plans to turn to the central government for more monetary injections."

Local media said the 10 percent plunge is equivalent to $1 billion. CIC was not immediately available for comment.

CIC, one of the world's largest sovereign wealth funds, was established in 2007 with ap-proximately $200 billion in assets. At the end of 2008, CIC's assets totaled $298 billion.

CIC was launched in 2007, when 1.55 trillion yuan ($227 billion) in special treasury bonds were issued to create the capital it needed. According to Lou Jiwei, CIC chairman, the fund "needs to make a profit of 300 million yuan ($43.92 million) every day just to pay the interest on the bonds and operation costs."

In July 2007, State-owned Central Huijin Investment Corporation was merged into the new company as a wholly-owned subsidiary company holding stakes in domestic banks.

CIC's portfolio is about 25 percent stocks, 18 percent fixed income and 8.8 percent "anti-inflation" securities. It also allocates about 9.4 percent of its funds to a hedge fund, 7 percent to private equity, 8.6 percent to cash and 18.9 percent to "special situations," or, as Wang put it, "hunting," according to Reuters.

Source: Global Times


  • Do you have anything to say?


Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Giant red lantern lights up in Tiananmen Square to celebrate the coming National Day on Oct. 1. (Xinhua/Li Xin)
  • A ceremony is held in Taipei, southeast China's Taiwan, on Sept. 28, 2011, to commemorate the 2,562nd birthday of Confucius (551-479 BC), a Chinese thinker, educationist and philosopher. (Xinhua/Wu Ching-teng)
  • The world's first Boeing 787 Dreamliner for delivery arrives at Haneda airport in Tokyo, capital of Japan, on Sept. 28, 2011. The Boeing 787 Dreamliner, whose buyer is All Nippon Airways (ANA), will implement a flight of ANA on Oct. 26 from Tokyo's Narita Airport to Hong Kong in south China. (Xinhua/Ji Chunpeng)
  • A Libyan National Transitional Council (NTC) fighter shows what is believed to be human jawbone found inside a mass grave near Abu Salim prison in Tripoli, Libya, Spet. 27, 2011. The NTC on Sunday said they had found a mass grave containing the bodies of 1,270 people killed by Gaddafi's security forces in a 1996 massacre at Abu Salim prison in southern Tripoli. (Xinhua/Li Muzi)
  • Rescue workers and local residents search for survivors after a building collapsed in old Delhi, India, Sept. 27, 2011. At least 10 people were killed and 35 injured when an old three-storey building collapsed. More than a dozen people are still feared trapped under the debris, police said. (Xinhua/Partha Sarkar)
  • A visitor has flying experience in the windmill castle of Jinshitan National Holiday resort in Dalian, northeast China's Liaoning Province, Sept. 27, 2011. The castle is a 23-meter-high building with 21 meters in diameter. The castle uses wind tunnel to make objects floating in the air. It is the first indoor stadium in China, which enables people to have flying experience. (Xinhua/Zhang Chunlei)
Hot Forum Discussion