CHINA INVEST $155 MILLION IN THE SPRD GOLD TRUST

(February 9th) -China Investment Corp., the nation’s sovereign wealth fund, invested for the first time in the U.S. Oil Fund, an exchange-traded crude-futures fund, joining Morgan Stanley & Co. and Goldman Sachs Group among the top holders.

China Investment became the fourth-largest holder in the Oil Fund by buying 2 million shares, equal to 3.48 percent of the outstanding units, with a value of $78.6 million, according to a Securities and Exchange Commission 13-F filing posted on Feb. 5. It also took a 1.45 million share stake, or 0.4 percent of the total, in the SPDR Gold Trust worth $155.6 million.

Chinese miners and oil companies have bought up zinc mines in Australia, oil reserves in Nigeria, and gold deposits in the Philippines to feed the country’s demand for raw materials to fuel its economic growth. The $300 billion sovereign wealth fund pumped about $10 billion into commodity-related concerns in the second half of 2009.

“It looks like they are aware of their market power in commodity markets and want to hedge against the impact their buying has on commodity prices,” said Timothy Condon, chief Asian economist with ING Groep NV in Singapore. “I think the reserves, via the CIC, will be used to hedge the risk of a cutoff of key raw material supplies by buying stakes in commodity producers.”

CIC’s investments through the SPDR Gold Trust are equivalent to 145,000 ounces of bullion, or about 0.4 percent of the 33.9 million ounces China’s government maintains, based on data from the International Monetary Fund.