China State Investment Company suffers a heavy loss

China State Investment Company suffers a heavy loss
Nov 14, 2007 01:14
KEVIN0518 Points: Join Date: Mar 13, 2007 Status: offline	On Monday, Black Stone announced that they had a quarterly loss from charges and posted a 44 percent drop in real estate revenues, missing analysts' estimates and sending its shares down more than 7 percent. Just on Nov. 12, its shares dropped about 2.2 percent. Compares with its IPO in June, its shares has shrunk about 38.2 percent. As one of its investors, China state investment company suffers a heavy loss from Black Stone. The total loss is about 5.534 billion yuan (0.744 billion dollars). In May, the state investment company bought three billion shares of Black Stone Group. So far, it lost about 24 percent, which equals 0.744 dollars. James, the CEO of Black Stone said:" The subprime black hole is appearing deeper, darker and scarier than they thought." He also said those investment banks expect the Fed to cut the interest rates again to help with both the subprime mortgage losses and leveraged debt backlog. Do you think interest rates cut can really help US to shake off the adverse effect of the subprime crisis?

Nov 14, 2007 01:14

KEVIN0518
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Join Date: Mar 13, 2007
Status: offline

On Monday, Black Stone announced that they had a quarterly loss from charges and posted a 44 percent drop in real estate revenues, missing analysts' estimates and sending its shares down more than 7 percent. Just on Nov. 12, its shares dropped about 2.2 percent. Compares with its IPO in June, its shares has shrunk about 38.2 percent.

As one of its investors, China state investment company suffers a heavy loss from Black Stone. The total loss is about 5.534 billion yuan (0.744 billion dollars). In May, the state investment company bought three billion shares of Black Stone Group. So far, it lost about 24 percent, which equals 0.744 dollars.

James, the CEO of Black Stone said:" The subprime black hole is appearing deeper, darker and scarier than they thought." He also said those investment banks expect the Fed to cut the interest rates again to help with both the subprime mortgage losses and leveraged debt backlog.

Do you think interest rates cut can really help US to shake off the adverse effect of the subprime crisis?

Nov 21, 2007 03:00

JIMMYB
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Join Date: Feb 7, 2007
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Hope that US can shake off the adverse effect of the subprime crisis as soon as possible. US dollar has fallen to its record low in history. It is reported that six Arab nations will soon end their fixed exchange rates to US dollar. They face rising price pressure partly caused by the weakening dollar. Since US has a great impact over global economies, the whole global markets will suffer a lot if US dollar keeps deappreciating. Cutting interest rates can not solve the problem that US faces. The government and the Fed should find other ways.

Nov 23, 2007 11:25

APAULT
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Join Date: Mar 11, 2006
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The cost to China of this loss is insignificant - though of course it would have been better if it had not occurred. In any portfolio of share ownership or business investment there may be some thet go the wrong way. Overall, China Inc is way ahead (in profit).

No, the USA cannot buy itself out of trouble with interest rate changes. It is a case of 'rearranging the deck chairs on the Titanic'. It has fundamenta structural problems, economic, political, and social. Until it gets leadership that is willing to address these issues it will continue to slide. The chances of that happening are about the same as China winning no gold medals in the Beijing Olympics!

Nov 26, 2007 03:54	#3
KEVIN0518 Points: Join Date: Mar 13, 2007 Status: Offline	Yes, paul. This loss is insignificant compared with the huge amount of foreign reserve. What China should do is to learn lessons from this investment. If more losses were made, that wouldn't be good.

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