The Endless Bid

The bid in the market for the past few months seems to be insatiable. Today, we received news that the Chinese have finally fully invested their $300 billion sovereign wealth fund. They have been trying to invest this money for years but were making very slow progress. I was quite shocked to read that they were now done. This might explain some of the recent action as its difficult to invest that type of money without effecting markets. From the Wall Street Journal:
China Investment Corp., the country's $300 billion sovereign-wealth fund, has requested more investment from the central government as it has already used up its current pool of money, a senior CIC official said Saturday.
"There's no more money for new investment," Wang Jianxi, executive vice president of the CIC, said on the sidelines of a forum in Beijing.

4 comments:

Tsachy Mishal said...

I was able to deduce from a Bloomberg article I read the amount invested this year by the Chinese sovereign wealth fund was at least $100 billion.

The Bloomberg article said the fund was 2/3 cash in 2009 but in 2009 the fund had $200 billion. If one takes the 2/3 number against the $200 billion than they invested $170 billion this year.

http://www.bloomberg.com/news/2011-01-15/china-s-cic-seeks-funding-after-fairly-good-returns-in-2010.html

nicasurfer said...

So is this where all a good amount of the demand has came from?

Tsachy Mishal said...

It might have been part of it. A good part was the crowd moving from bearish to bullish.

Tsachy Mishal said...

meant 1/3 cash but the calculation is still correct