c2, i have news for all of us, and we might as well consider today to be revelation day
businessweek.com
Bloomberg
China Becomes Oil ETF’s No. 4 Holder, Buys SPDR Gold Trust
February 08, 2010, 11:45 PM EST More From Businessweek
By Christian Schmollinger and Kyoungwha Kim
Feb. 9 (Bloomberg) -- China Investment Corp., the nation’s sovereign wealth fund, joined Goldman Sachs Group and Morgan Stanley & Co. in investing in the U.S. Oil Fund, an exchange- traded crude-futures fund.
China Investment became the fourth-largest holder in the Oil Fund by buying 2 million shares, equal to 3.48 percent of the outstanding units, with a value of $78.6 million, according to a Securities and Exchange Commission 13-F filing posted on Feb. 5. It also took a 1.45 million share stake, or 0.4 percent of the total, in the SPDR Gold Trust worth $155.6 million.
Chinese miners and oil companies have bought up zinc mines in Australia, oil reserves in Nigeria, and gold deposits in the Philippines to feed the country’s demand for raw materials to fuel its economic growth. The $300 billion sovereign wealth fund pumped about $10 billion into commodity-related concerns in the second half of 2009.
“It looks like they are aware of their market power in commodity markets and want to hedge against the impact their buying has on commodity prices,” said Timothy Condon, chief Asian economist with ING Groep NV in Singapore. “I think the reserves, via the CIC, will be used to hedge the risk of a cutoff of key raw material supplies by buying stakes in commodity producers.”
CIC is considering new investments in resource-related companies this year. They held “early” talks for direct investments in Brazil, the world’s second-biggest iron-ore exporter, and Mexico, the No. 2 silver producer, Chairman Lou Jiwei said at the Asian Financial Forum in Hong Kong on Jan. 20.
Canada to Kazakhstan
In July, CIC bought 17.2 percent of Teck Resources Ltd., Canada’s largest base-metals producer, for C$1.74 billion ($1.6 billion). It acquired an 11 percent stake in a unit of Kazakhstan’s state-run energy company in late September, two weeks before purchasing 45 percent of Nobel Oil Group of Russia.
In November, it announced investments in U.S. power producer AES Corp. and GCL-Poly Energy Holdings Ltd., China’s biggest polysilicon producer.
Institutional investor Paulson & Co. holds the largest number of shares in the SPDR Gold Trust with 8.68 percent, or 31.5 million. Goldman Sachs has the biggest stake in the U.S. Oil Fund with 5.3 percent, or 3.045 million units.
--Editors: Clyde Russell, John Viljoen.
To contact the reporters on this story: Christian Schmollinger in Singapore at +65-6212-1898 or christian.s@bloomberg.net; Kyoungwha Kim in Singapore at +65-6212-1895 or Kkim19@bloomberg.net
To contact the editors responsible for this story: Clyde Russell at +65-6311-2423 or crussell7@bloomberg.net; James Poole at +65-6212-1551 or jpoole4@bloomberg.net |
