Beijing: China's sovereign wealth fund posted an 11.7 per cent return on its overseas portfolio in 2009, reversing a loss a year earlier, according to the official China Central Television.

Net income almost doubled to $41.7 billion (Dh153 billion), CCTV reported yesterday, citing China Investment Corp's (CIC) 2009 annual report.

Total return on equity, including gains from the overseas portfolio and holdings in local banks, was 12.9 per cent, compared to 6.8 per cent in 2008, according to CCTV. The fund spent $58 billion in global investments last year, more than double the combined amount for the previous two years, CCTV said.

Investments in 2009 ranged from US power producer AES Corp to Indonesia's PT Bumi Resources.

Beijing-based CIC is asking the Chinese government for more funds to invest, Executive Vice-President Jesse Wang said last month.

"The CIC's focus on resources should have contributed to strong performances in 2009," said Rachel Ziemba, London-based senior analyst at Roubini Global Economics, before the announcement.

As many sovereign wealth funds have seen an increase in assets with a global market rally, "it would be shocking if CIC had not had strong returns," she said.

Moment of truth

"But the truth will come in 2010 and beyond given the risks to the risky assets that dominate CIC's portfolio."

Temasek Holdings, Singapore's state investment firm, this month said assets climbed 43 per cent to 186 billion Singapore dollars (Dh500 billion) in the year to March 31. CIC had 24.68 per cent of its global portfolio in public equity markets, Wang said at the Asia Banking and Finance Conference last month.

The sovereign wealth fund holds about 18 per cent of its investments in fixed-income securities and 8.8 per cent in inflation-linked products, he said at the time. Almost 7 per cent is held in private-equity funds.

"CIC should fare well in 2010 as they have renewed confidence, a more experienced organisation, and clear strategy," said Victoria Barbary, senior analyst at Monitor Group in London.

"But the global economy is quite volatile so there are far more external forces that have to be understood and responded to."

The MSCI World Index, which surged 27 per cent in 2009, has dropped 3.3 per cent this year as the European debt crisis and China's efforts to curb asset bubbles threatened the global recovery. Bumi Resources, Indonesia's biggest coal producer in which CIC made its largest investment announced in 2009, has fallen nearly 30 per cent.

Natural resources

CIC in May agreed to invest C$817 million (Dh2.9 billion) in a new oil-sands venture with Canada's Penn West Energy Trust, gaining a stake in the world's largest crude deposits outside Saudi Arabia.

The company bought stakes worth about 650 million euros (Dh3 billion) in Apax Partners' private-equity fund from investors.