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[Londres, 26 de Reuters]- The intensification of the conflict between the United States and China over the high-tech sector is putting some of the world’s largest sovereign wealth funds (SWF) and pension funds in trouble. Reuters has analyzed data and disclosures from these institutional investors.
Investors in the “perfect” way come from the National Teachers’ Pension Insurance Association (TIAA) of $ 1.1 trillion (approximately 114.110 billion yen), the sovereign wealth funds of Norway and Singapore, and the National Bank Swiss (Central Bank). .
The immediate cause is that former President Donald Trump issued an order in November last year prohibiting Americans from investing in companies they consider related to the Chinese military. So far, more than 40 Chinese companies have been blacklisted.
Therefore, Nubean, a subsidiary of TIAA, has been blacklisted by China Telecom (China Telecom), China Mobile (China Mobile), China Unicom (China Unicom), China Marine Oil (CNOCC), and Semiconductor Manufacturing International. Corporation (SMIC).), Xiaomi was forced to sell its shares.
Other US public pensions are expected to follow suit. For example, the California Employee Retirement Pension Fund (Calpers) confirmed in a refinishing that the Hong Kong-listed China Telecom shares (H shares) are up 1.1%, and the China Mobile and China shares Unicom have 0.2%. CalPERS has also been criticized by American Republicans for investing in Chinese companies. The pension has not responded to requests for comment.
The $ 200 billion Florida Management Board (FSBA) also has a small stake in China Telecom, China Mobile and Xiaomi, and said it would comply with a ban on investing in Reuters.
“This investment ban has really hurt American institutional investors,” said Elliott Hentov, head of policy research at State Street Global Advisors.
However, the impact is not limited to the United States. Not only did the New York Stock Exchange delist blacklisted Chinese companies, but MSCI, S&P Dow Jones, and FTSE Russell removed them from the stock index. As a result, the share prices of some of these companies plummeted by more than 20%, affecting several foreign sovereign wealth funds that had been included in their portfolios.
The Norwegian Government Pension Fund ($ 1.3 trillion in assets), the world’s largest sovereign wealth fund, holds a range of $ 35 billion worth of Chinese stocks, according to recent disclosures as of early last year. Among them, China Telecom, China Mobile, Xiaomi, CNOCC and China Unicom were also included at a ratio of about 0.2-0.6%. When I interviewed him, he replied that he would not comment on the individual shares he owns.
The Government of Singapore Investment Corporation (GIC) holds 10% of China Telecom’s H shares and SMIC’s mainland China-listed shares (A shares) and H shares of about 1.4%, according to documents from notification to the stock exchange. According to Reuters calculations. Comments are rejected.
The blacklisted companies are owned by Canada’s second-largest pension fund, the Quebec Savings and Investment Corporation (CDPQ), the Public Pension Investment Commission of Canada and the independent pension manager PGGM, based in the Netherlands. civil service pension fund.
SWF has expanded its investment in Chinese equities in the context of the recent rise in the weight of Chinese equities in the global equities market. The US investment ban order and TikTok, a Huawei technology or video publishing app, were said to be involved in the Chinese government’s espionage activities, the US government claims. and US government claims show that the high-tech sector has become one of the main battlegrounds in the geopolitical conflicts between the United States and China.
Shares of China Telecom, China Mobile, Xiaomi, and CNOCC have fallen 12-22% since November last year or early this month, as President Biden’s future plans are still unclear.
Winston Marr, former managing director of SWF’s China Investment Corporation (CIC), said: “Some of the shares sold may be acquired by non-US investors, but they will absorb all of them. It will be difficult.”
It is not just the United States that is at the mercy of institutional investors who own Chinese stocks. The initial public offering (IPO) planned by Alibaba’s finance company Ant Group in November last year was expected by the Chinese government shortly before, and the market capitalization of Alibaba, which owns more than 30% of Ant shares, this is because there was a scene where the number decreased by about 25%. Alibaba is one of the top 10 stocks in the world by market capitalization and is held by a wide range of pension funds and sovereign wealth funds.
According to data from the US Securities and Exchange Commission (SEC), the Swiss central bank has doubled its stake in Alibaba to $ 1.4 billion in September last year, doubling in the previous two years. After that, the fall in November caused the value of the holding to disappear by about $ 350 million. But when the US government forgot to add Alibaba to the ban this month, its shares recovered about half of their decline.
(Marc Jones reporter, Tom Arnold reporter)
