China CITIC says to be pickier in investing abroad

BOAO, China (Reuters) - China's CITIC Group, parent company of the country's largest brokerage, said on Saturday that the yuan's rise and domestic economic strength will make it more cautious and selective in targeting overseas acquisitions.

Its brokerage arm, CITIC Securities (600030.SS: Quote, Profile, Research), narrowly wriggled free from a proposed investment in the troubled Bear Stean, which is being sold on the cheap to JPMorgan, because Chinese regulators did not approve the deal in time.

"Now we will only offer to buy overseas if the target is extremely attractive," Chang Zhenming, president of the financial group, told Reuters in an interview at the Boao Forum in southern China.

"As you know, the yuan will keep rising and by holding yuan assets we can enjoy easy gains from the appreciation," he said.

But the group, which also encompasses China's seventh-largest bank, far from ruled out venturing overseas.

Chang said CITIC Securities was in talks with many financial institutions and focused mainly on opportunities in Asia, especially tie-ups with well-known investment banks in the region.

The brokerage has said before that, despite the Bear Stearns collapse, it still intended to expand abroad, potentially by teaming up with foreign investment banks.

Chang also said that CITIC Bank (0998.HK: Quote, Profile, Research), which boasts a capital adequacy ratio of 15 percent, would seek to set up branches in other countries to serve its more internationalized clients.

A handful of Chinese banks, insurers and government agencies have bought into global financial institutions weakened by the U.S. mortgage crisis, but worries about investment risks have held them back from more aggressive forays abroad.