China's forex reserves are expected to surpass Japan's this year as strong fund inflows and a burgeoning trade surplus make it the world's largest holder of foreign currency, state press reported Tuesday.
"At this speed, our foreign reserves are likely to exceed Japan's," Ba Shusong, a top official with the Financial Research Institute under the State Council's Development Research Center, was cited as saying by the China Securities Journal.
At the end of September China's foreign reserves rose 15.8 billion dollars from a year earlier to hit 769 billion dollars.
By comparison Japan's foreign exchange reserves in September were down 4.20 billion dollars from August to 843.56 billion dollars.
China's foreign reserves have risen at a remarkably fast rate, hitting a record 609.9 billion dollars in 2004, up from 403.3 billion dollars in 2003.
The country's booming exports pushed the trade surplus up to a record 68.3 billion dollars in the first nine months of 2005.
Some analysts have expressed concern that China's rapid accumulation of the world's three main currencies -- the dollar, euro and yen -- would be unsustainable as the central bank is forced issue greater amounts of debt paper to absorb new funds.
They said the government must better manage its reserves by redirecting efforts to the rebalancing of international trade, while creating more investment channels.
"After meeting the liquidity needs of trade, foreign debt and short-term market shocks, (the funds) can be invested for long-term purposes by specialized and independent institutions," said He Fan, assistant director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences.
GNA
AA
25 OCT. 05

FECO 06
ECONOMICS Oman-Omantel
Omantel shareholders brace for entry of foreign investors
MUSCAT, Oct 25 (AFP/GNA) - Shareholders in telecom service provider Omantel are hoping to cash in on their investment amid expectations of a jump in the firm's stock price when foreign investors are allowed to deal in the shares Thursday.
In the largest initial public offering (IPO) in Oman, the government raised about 288 million rials (748 million dollars) in July from the sale of 30 percent of Omantel to local individual and institutional investors.
The company's shares were listed on the local stock market but foreign investors were not allowed to deal in the shares until October 27.
Brokers and analysts expect a keen interest in Omantel from Gulf investors who have been pouring cash from soaring oil prices into the region's stock markets.
"We are gearing up for big interest from Gulf nationals," said Hamad al-Salti, a broker in Muscat.
Regional stock markets are trading at record highs with the Kuwaiti market closing Monday above the 11,000-point mark for the first time ever.
In a sign of the stock trading fever sweeping the region, Saudis flocked earlier this month in planeloads with suitcases of cash to the United Arab Emirates (UAE) to buy shares in the IPO of gas exploration and production company Dana Gas.
Analysts expect by the end of 2005 that some nine billion dollars will be raised through several IPOs in the six Gulf Cooperation Council (GCC) states of Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the UAE.
Omantel's stock has been trading around 2.5 riyals (6.5 dollars) per share for the past few weeks.
Foreign ownership in the company cannot exceed 49 percent and no individual can own more than five percent of the stock, according to the rules of the initial offering.
Abdullah bin Ali al-Rashdi, a 36-year-old schoolteacher in Muscat, is anxiously awaiting the entry of foreigners to make a quick profit from his holding in Omantel.
"I will buy a piece of land with the money, because it is more secure. Investing in the stock market is an adventure," he said.
Omantel was created in August 1999 to replace the government-controlled General Telecommunications Organization and pave the way for the privatization of the telecoms industry in line with the state's policy of liberalization and deregulation.