China to invest foreign reserves in Japan stocks: media report
A Chinese government fund established to manage part of China’s roughly US$1.4 trillion in foreign currency reserves is preparing to invest some of its assets in Japanese stocks, according to a media report Monday.
Entrusted with US$200 billion, China Investment Corp. was launched in late September, becoming one of the world’s richest investment funds. About one-third of its assets is earmarked for investment in global financial markets.
The company “will soon start investing in Japanese shares,” the Nikkei business newspaper quoted an unnamed CIC official as saying. The official, however, did not give the timeline, it said.
The report helped lift Japanese stocks Monday, with the Nikkei 225 average rising 246.44 points, or 1.66 percent, to 15,135.21 points.
The Chinese investment agency has also begun recruiting specialists in Japanese stocks and other investment vehicles through a Web site launched recently, according to the report.
It is hiring 24 specialists in stocks in North America, Japan, Europe and others in emerging economies, products such as bonds, and in areas such as risk management, the Nikkei said.
Investment capital from CIC is expected to provide support to slumping Japanese stock markets, but it will also increase the risk of hostile takeovers and management intervention for Japanese companies.
Beijing created the fund in an effort to earn higher returns on its currency reserves, which have soared amid a boom in export revenues. A large portion of the reserves are invested in safe but low-yielding U.S. Treasuries.
Tags: investment