Companies

China's CIC may spin off Huijin unit

(Agencies)
Updated: 2010-07-06 11:13

China Investment Corporation (CIC) may spin off its Huijin unit, which is the majority shareholder in many banks such as Bank of China, the Financial Times reported, citing people familiar with the matter.

The move is being championed by China's Vice Premier Wang Qishan and would allow CIC to invest in the United States, where it is interested in targeting equities, bonds and real estate, the report said.

Related readings:  CIC's North American equities list revealed  CIC sees 10% investment loss in May  CIC appoints new senior execs  Huijin applies for $50b govt injection - report

The newspaper also cited several unnamed Beijing policymakers as saying that they wanted Huijin to come under the management of the State Council, China's cabinet.

Huijin's bank stakes were valued at $70 billion when CIC was established in 2007, and the amount of cash the fund has for investing may nearly double if it is compensated for the spin-off, the newspaper added.

CIC was set up in September 2007 with the goal of seeking higher returns from some of China's stockpile of foreign currency reserves.

Its Huijin unit owns majority stakes in many of China's former State-owned lenders, including 67 percent of Bank of China, and has said it fully supports the recent fundraising activity.