China wealth fund gets Us$30bil boost

Sovereign wealth fund received new funding in 2011 UK rules cut HSBC value by 17%

China’s Us$410bil sovereign wealth fund, China Investment Corp, received Us$30bil in new funding last year, a top executive said.

BEIJING: China’s Us$410bil sovereign wealth fund China Investment Corp (CIC) received Us$30bil in new funding last year, a top executive said, declining to say if the additional money would pay for asset purchases in crisis- hit Europe.

Jesse Wang, an executive vice president at CIC, said the fund considered risk and rewards when buying assets and this modus operandi applied to Europe.

Sources told Reuters in December that CIC could get as much as Us$50bil in new money to help it move quickly in overseas purchases.

“Where there are financial assets with low valuations and reasonable returns, all risks considered, we will buy,” Wang said yesterday on the sidelines of a meeting preceding China’s annual parliament session starting yesterday.

“Just because Europe has its problems does not mean we will change our method of assessment.” Cash-rich China with its US$3.2 trillion foreign exchange reserves, the world’s largest, has been a port of call for fiscally troubled European nations looking for new investment in their government bonds.

But like other nations, China has not publicly stumped up more money in Europe’s anti-crisis bailout fund due to a belief that the euro bloc must put up more of its own cash before it seeks help from others. — Reuters LONDON: HSBC Holdings Plc is “permanently undervalued” by as much as Us$28bil.

This was due to UK financial regulations introduced after the debt crisis, its chief executive officer Stuart Gulliver told the Sunday Telegraph.

The UK banking levy and the treasury’s demand that banks set aside capital to absorb a loss of as much as 20% of their balance sheets will cost HSBC Us$700mil and Us$2.1bil, respectively, in 2012, the newspaper quoted the CEO as saying.

At a price- earnings ratio of 10, that would shave about 17% off the bank’s market capitalization, Gulliver told the newspaper.

Gulliver has asked the treasury to make the banking levy a windfall tax, which would make it tax-deductible and protect HSBC’S dividend, the Sunday Telegraph reported. — Bloomberg

Newwealth: Tourists looking at high-rise buildings in in Shanghai, China. Cashrich China with its US$3.2 trillion foreign exchange reserves, the world’s largest, has been a port of call for fiscally troubled European nations looking for new investment...