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The President of China Investment Corp, Gao Xiqing, has made his way to the U.S. with Wei Christianson, CEO and Managing Director of Morgan Stanley China, sparking rumours that the Chinese sovereign wealth fund may buy up to 49% of the beleaguered investment bank. Gao has been scheduled to meet Morgan Stanley executives in San Francisco after the New York-based company plunged 42% after Lehman Brothers filed for bankruptcy and Merrill Lynch sold itself to Bank of America.
AFP reports that the Chinese are pragmatic about their prospects:
When asked by China's state-run Xinhua news agency, an unnamed CIC official did not rule out the prospect of buying a stake in Morgan Stanley but pointed to political hurdles in the United States over such a deal.Even if the CIC intended to buy a stake, it could be very hard now as the purchase of a stake, even one smaller than 10 per cent, could be subject to the US government foreign investment review,' the official said.
Meanwhile, conflicting reports are swirling around on CITIC's interest in Morgan Stanley. Reuters reports that after CITIC's near miss on Bear Stearns earlier this year, Beijing began Beijing began tightening approvals of investments by Chinese financial institutions overseas and any foreign investment worth “a considerable amount of money” will now require approval from the government before a legally binding agreement can be confirmed.
In a related development, the Government of Singapore Investment Corp, another of the world's largest sovereign funds, has taken a more high-handed approach by suggesting it will explore an investment in Morgan Stanley if it is approached.
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--"Reuters reports that after CITIC's near miss on Bear Stearns earlier this year, ... any foreign investment worth “a considerable amount of money” will now require approval from the government"?
Reuters is wrong. The approval from the Chinese government became a must much earlier when CNOOC's $18 billion bid for Unocal failed in 2005 because of US anti-trust and national security concerns. The approval tightened even further when Huawei’s $2 billion bidding to takeover 3Com failed again because of a political uproar in USA in 2007, since the rednecks thought the deal would allow commie to bug on their pillow-talk, exactly like their dear leader Bush did to them.
I still remember vividly how mad American public and especially the lawmakers's reaction were then, calling the deals as “commie’s conspiracy” and an “betrayl of free world”.
Now here comes Morgan Stanley to which China Investment Corp already own a burning 9.9%. I hope American will think twice about 49% commie's share which will make their moral bar even lower, not to mention the high ground. When being hungry, you become less picky on food.
I agree. Even if CIC wants to buy a big chunk of Morgan Stanley, they couldn't because the government will stop it from happening. It would only be a matter of time when the US government can't borrow money and they are forced to accept Chinese money.
Another reason CIC is less possible to invest is there are almost no real good asset for sale on earth.
Just imagine the call back for 450 trillion the false values floating around this planet when there is nothing to be paid. It's like a global Mahjohn game with much more chips than real money but everybody is holding the chips. Maybe Wall Street, a place I recommned anybody to leave, will soon become cemetery of the ugly American global economy.
Maybe the best place to invest for CIC now, being the king of cash, is only A share market in China with low 16%P/E and high 9%GDP of production for hard stuffs. Can anybody in this world at this fcking moment imagine a no less than 30-50% annual profit from almost all listed banks in China?
jeez, i havent been following the news lately. BUT DID MS REALLY GET BOUGHT BY BANK OF AMERICA???????????
suckers.
Yes, we also put a man on the moon!
@ leastman and pug ster
Despite the bad behavior and lies of Wall St. it's fall is nothing compared to the drop in Shanghai's market because China is an inferior pile of shit in all categories.
To nanheyangrouchuan,
Still mad with your missing 10% gain of your $10 pocket money last Friday? But your cursing Shanghai's market for your bad luck is just like blaming earth gravity when you cannot shit.
Try lube the broken hole, you'll begin to giggle again.
I'm not in Shanghai's market. I'm laughing at people like you who are ;-)
Just don't do it. Now's not the time for a chinese firm or anyone else to buy a stake in any U.S. financial. The U.S. government put the brakes on this collapse but it is still pointed downhill. China has many better places to invest its money.
To nanheyangrouchuan
---"I'm not in Shanghai's market. I'm laughing at people like you who are"?
In 1.5 trading day, I am out of Shanghai this morning with a 16% kill. Boy, only an idiot like you will hang on for life. And with your lovely $10 pocket money, vegetable market is only one you can go.
It's down 69% on the year and (was) down 20% in September alone. If you stayed clear of this market in 2008, you were probably smart, but I would reckon that there are probably some good buying opportunities now. Nonetheless, it's still very much at risk of contagion from the states (especially if more financial problems are uncovered) and far from a safe bet. Not a place for the conservative investor.
To Buck,
Calculated on today, 6o% down on year and 6% down in September.
I agree that there're some good buying opportunities now, but not a place for the conservative investor since buying moment is the one when all investers are bocoming crazy with clenched tooth.
But any market has opportunities if you step on the right rythm of 2-3 rallying times in a year, while switching off your Apple and dozing away all months left.
@ leastman,
Yesterday's little blip on the Shanghai Shit market was due to Beijing buying up stocks through SOE insurance companies and banks to shore up confidence. In other words, Beijing just blinked when it comes to the status of China's financial market.
To nanheyangrouchua,
Well, whatever you say, though too late.
You can repeat what newspapers say, but "shit market" doesnt repeat itself, especaily for a economic illiterate like you.
Go buy vegetables!
Heard Bushie called Hu today about financial markets. Looks like US is really broke and the 700 billion rescue package bandied by around by US gov cud be just hot air. I guess it's a matter of MS in desperate straights and China shud not buy it.
Reckless business dealings with China helped fuel this crisis.