CIC Buys Stake in Kazakh Gas Company for $939 Million
China's sovereign wealth fund bought a stake in the London-traded unit of Kazakhstan's state-run energy company, taking its spending on resources to at least $3.69 billion this month, Bloomberg reported.
China Investment Corp., which holds almost $300 billion, bought an 11 percent stake in Astana, Kazakhstan-based JSC KazMunaiGas Exploration Production for about $939 million by purchasing global depositary receipts, according to a statement dated today on the Beijing-based fund's Web site.
China is hunting for resources from Canada to Nigeria to support expansion in the world's fastest-growing major economy. Today's deal follows a combined $2.75 billion spent by the fund on Indonesia's PT Bumi Resources and Noble Group Ltd. last week.
"The reason why China is investing in assets like this is simple: it needs more oil and gas," said Shi Yan, an analyst at UOB-Kay Hian Ltd. in Shanghai. "China also has huge financial reserves and with commodity prices still down from highs last year, it's still a good time to buy."
KazMunaiGas Exploration's GDRs rose as much as 4.5 percent to $21 as of 8:47 a.m. in London.
CIC bought $1.9 billion of debt from Jakarta-based Bumi Resources, Indonesia's biggest coal producer, last week, and paid $850 million for a 15 percent stake in Noble, a Hong Kong-based commodity supplier, on Sept. 22. Vancouver-based Teck Resources Ltd., Canada's largest diversified mining company, sold a 17 percent stake to CIC in July.
China, the world's biggest buyer of commodities including soybeans, cotton and iron ore, will expand 8.2 percent this year, compared with a March forecast of 7 percent, the Asian Development Bank said this month.