Page last updated at 06:00 GMT, Tuesday, 22 September 2009 07:00 UK

China takes $850m commodity stake

Lou Jiwei is the Chairman and Chief Executive Officer of CIC.
Lou Jiwei is the head of the Chinese sovereign fund

China's sovereign wealth fund has bought a stake in a Hong Kong-based commodities trading firm.

China Investment Corp, the country's $200bn (£123bn) fund, took a 15% stake in Noble Group in return for $850m.

The deal comes after China recently signed a pact with another commodity trader, Glencore, in an attempt to increase its influence in the sector.

China's rapid economic growth has made it one of the world's largest consumer of raw materials such as oil and steel.

Rising interest

Noble, whose shares are listed in Singapore, is one of the few publicly-listed commodity trading houses.

China's fund bought its shares at an 8% discount to Noble's last traded share price of 2.30 Singapore dollars.

Noble has investments in Australian coal, soybean crushing plants and sugar and ethanol mills in Brazil, among others.

In July, China Investment Corp paid $1.5bn for a 17% stake in Canadian miner Teck Resources Ltd.

"A lot of sovereign wealth funds or state-linked firms are increasingly showing interest in resources, so this is in line with the trend," said OCBC Securities analyst Lee Wen Ching. "Noble provides access to a diversified portfolio."

Sovereign wealth funds are the investment funds established by governments in Asia and the Middle East mainly, who have large surpluses of money which they wish to invest abroad.

Abu Dhabi has the largest fund, at $800bn, while Norway's is $400bn and Singapore has a $330bn sovereign fund.

China's fund was established in September 2007.

Print Sponsor

Can China save the world?
15 Sep 09 |  Business
China in huge Venezuela oil deal
17 Sep 09 |  Americas
Foreign investment in China rises
15 Sep 09 |  Business

The BBC is not responsible for the content of external internet sites

Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit


Sign in

BBC navigation

Copyright © 2017 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific