The head of the world's biggest sovereign wealth fund said investing in China hasn't lost its allure even after economic growth slowed.
“We've noticed that there has been a change in perception about Chinese growth in the years coming,” Yngve Slyngstad, CEO of the $760 billion Government Pension Fund Global, said in an Aug. 9 interview in Oslo. “However, the growth that is expected by the authorities is still quite high. We still have confidence that long-term prospects for China are quite good.”
A report last week showed that China's industrial output rose more than estimated in July, adding to signs that economic growth may start accelerating. Larger-than-forecast rebounds in exports and imports and rising gauges of manufacturing and service industries have also signaled the world's second-largest economy will meet Premier Li Keqiang's economic growth target for this year of 7.5%.
Norway's Government Pension Fund Global, which got its first capital in 1996 to invest the country's oil wealth outside its borders, lost 5.9% on its stock investments in emerging markets in the second quarter, in part because of speculation of weaker growth in China, it said last week.
Norway held 10% of its stocks in emerging market countries at the end of June, up from 9.9% in December. Some 2% were invested in China, up from 1.7% in December. That compares with 31% in the U.S. and 14% in the U.K. At the end of last year, the last time the fund divulged all its holdings, it had 303 investments in mainland China.
The fund aims to double its investment in emerging markets to 20%, Slyngstad said.
Temasek Holdings Pte, Singapore's wealth fund and the biggest foreign investor in Chinese banks, also said last month that it's not concerned by a cash crunch that caused Chinese money-market rates to soar and pushed stocks to a four-year low.