Chillin' out till it needs to be funded
China’s sovereign Fund was working at increasing its presence in US companies and markets of choice this fortnight. While news was busy covering the overrun on debt and Volcker’s single defiant stand in front of the Senate Committee, Toyota and Amazon were recovering from market and competitive actions, and Banks were in the ‘quiet period’, China’s sovereign wealth fund CIC was looking for blocks to purchase in Coke, Apple and Goodyear. The investments , a total of $9.4 billion, are imprtant as China’s forex reserves have other wise dipped with the current account surplus down 35% to $285 billion.
CIC, one of the world’s biggest investment funds, was launched in September 2007 with $200 billion in capital to earn a better return on Beijing’s reserves. One-third of its capital was earmarked for investment abroad, and the fund has bought minority stakes in mining, oil and financial companies.
The biggest holding in CIC’s disclosure is $3.5 billion in Canadian mining company Teck Resources Inc., an investment that was previously announced.
CIC has expanded cautiously abroad, trying to avoid a repeat of the political uproar in Washington that followed state-owned CNOOC’s 2005 bid to buy U.S. oil and gas producer Unocal Corp. CNOOC Ltd. withdrew its bid after some U.S. lawmakers complained the sale might jeopardize national security. Investing/Business Week
CIC investments include $360 million in VISA, $6 million in Apple and $9 million in Coke, minority stakes as a planned passive investment in growth. CIC had a bad run in its investments in 2008 when it had holdings in Morgan Stanley and Blackstone in the run up to the crisis.
The CIC subsidiary China Huijin owns more than 30% in each of the Big 4 banks in China including ICBC, Bank of China and China Construction Bank
Coke reported its fourth quarter today, and sales continued to dip in North Americas, down 1% in the nearly $2 billion US Markets. Coke reported Sales of $7.51 billion, with full year profit growing 17% to $6.82 billion or $2.93 per share on marginally lower sales of $31 billion.
Coca Cola Zero reported double digit growth in North America in unit case volume despite six fewer days in Sales in the period. Coke China jumped 29%, India grew 20%, while Brazil and France grew 8% and 12% in unit case volume.
Coca Cola reports its juices and teas in the Still Beverages which also grew 9% in unit Case volume.
Apple had earlier reported double digit growth and new sales of iPad can easily be expected to add $1.2 billion in the next quarter’s sales adding 15 million units for the year.