More SWF ODI

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We recently had Chinese ODI digging into the mining giant Rio Tinto , and France’s Total. Now it is the UK’s oil company, BP, that is receiving investment from China (in the form of a sovereign wealth fund), as Forbes reports:

    “China has quietly accumulated nearly a 1% stake in BP to help secure its oil supply to fuel rapid economic growth.

    …A Chinese sovereign wealth fund has purchased about 1 billion pounds ($2 billion) worth of BP (nyse: BP – news – people ) over a period of time, accounting for just less than 1% of the U.K.’s biggest enterprise.

    …Xinhua Financial Network News in Beijing said Tuesday that the buyer is actually SAFE Investment Co., a Hong Kong-registered investment vehicle of the State Administration of Foreign Exchange, which had already bought a 1.6% stake, worth around 1.8 billion euros ($2.9 billion), in France’s Total (nyse: TOT – news – people ), the third-largest oil company in Europe. “

With foreign exchange reserves now at some US$1.68 billion, and pressure on resources, might we see more such investments? BusinessWeek suggests Chinese ODI from the state funds will certainly be active:

    “China’s three sovereign wealth funds—China Investment Corporation (CIC), National Social Security Fund (NSSF) and China-Africa Development Fund (CAD)—are likely to outsource a combined $320 billion to foreign asset managers over the course of the next three years, according to a report by Z-Ben Advisors.

    By the end of 2010, the three funds will manage an asset pool of $729 billion, and over the next three years they will test the water with global asset managers. After that, the pace of outsourcing will pick up even further.

    CIC will contribute the most to the growth in assets, growing from $200 billion currently to $625 billion by 2010. The Z-Ben report predicts that over 70% of these assets will be assigned to external managers by that time.”

See news sources:

    China Becomes A BP Shareholder
    Forbes – NY,USA
    China has quietly accumulated nearly a 1% stake in BP to help secure its oil supply to fuel rapid economic growth. The silent investment from China has come …
    HONG KONG –

    China’s Sovereign Wealth Funds to Outsource $320 Billion
    BusinessWeek – USA
    by Liz Mak China’s three sovereign wealth funds—China Investment Corporation (CIC), National Social Security Fund (NSSF) and China-Africa Development Fund …

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