Surely but slowly
With a $5 billion investment in Morgan Stanley, China’s CIC has concluded its first year helping that country to become a net investor, rather then investee. WSJ:
Chinese buyers have spent $29.2 billion acquiring foreign companies so far this year, while investors from the rest of the world have bought $21.5 billion of Chinese companies, according to Thomson Financial. The investment in Morgan Stanley will give state-run China Investment Corp. — a sovereign-wealth fund, essentially the government’s money pile — as much as 9.9% of the Wall Street giant.
It is the latest in a string of bailouts of financial giants by foreign investors as the firms struggle with souring mortgage-related investments. Indeed, yesterday Morgan Stanley reported a $9.4 billion write-down for its fiscal fourth quarter on its U.S. subprime and other mortgage investments.
Citigroup Inc. and UBS AG received sizable help from Middle Eastern and Singaporean investors in recent weeks. Wall Street firm Bear Stearns Cos. agreed in October to swap $1 billion investments with China’s Citic Securities Co…
Only last week, CIC started the selection process for money managers to funnel some of the $67 billion they have allocated from the $200 billion fund for overseas investment into global equity markets. But then, the fund seized the opportunity to make the Morgan Stanley investment, an aggressive move at a time when Wall Street banks look more like distressed assets
CIC continues to surprise. A month ago it looked as though the investment effort was going to revise its focus away from big equity stakes. Now those are back, in a big and high profile transaction. It would appear that Lou Jiwei and Gao Xiqing are not to be underestimated. (And perhaps Wei Sun Christianson too.)