CIC profit slips on lower overseas gains, forex losses
BEIJING: China’s sovereign wealth fund China Investment Corp (CIC) reported a 17 per cent decline in net profit last year, its lowest profit since 2011, hit by negative returns on overseas investments and huge foreign exchange losses, it said yesterday.
Net profit was US$73.9 billion (RM300 billion) last year, down from US$89.1 billion a year earlier, the fund said in its annual report.
CIC’s return on overseas investments declined to a negative 2.96 per cent last year, compared with a positive 5.47 per cent return in 2014.
CIC also reported a record foreign exchange loss of US$3.77 billion last year.
A sluggish global economic recovery, severe fluctuations in global financial markets and fierce competition in the investment industry made last year a challenging year for the fund, said CIC chairman Ding Xuedong.
CIC’s net cumulative annualised return was down 4.58 per cent at the end of last year, from 5.66 per cent a year earlier, the fund said.
CIC was founded in 2007 as a state-owned company to help China earn a higher return on its massive foreign exchange reserves, which were at US$3.21 trillion in June.
The fund invests overseas through two subsidiaries, CIC International Co and a direct investment vehicle CIC Capital Corp.
At its annual earnings briefing, CIC spokesman Liu Fangyu said that the fund’s worst performance in four years was caused mainly by falling commodity prices, low investment returns on stocks and bonds in a low interest rate environment, and major foreign exchange losses. Reuters Samsung says investing in BYD will
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