Sale of ICBC stake yields US$1b
Source: Bloomberg News |
January 30, 2013, Wednesday
|
Print Edition
Print Edition
GOLDMAN Sachs Group has raised US$1 billion from selling a stake in the Industrial and Commercial Bank of China, the world's largest bank by market value.
Goldman Sachs sold 1.35 billion shares at HK$5.77 (74 US cents) each, 3 percent lower than the Chinese lender's HK$5.95 closing price in Hong Kong on Monday, the New York-based bank said. Goldman Sachs has no immediate plans to sell more stock, said Edward Naylor, a Hong Kong-based spokesman.
ICBC fell 2.2 percent, the most since November 8, to HK$5.82 in Hong Kong yesterday. The stock had risen about 49 percent as of Monday from its 2012 low on July 12.
The shares have gained 5.8 percent this year and about 13 percent since Goldman Sachs's private-equity funds sold a US$2.5 billion stake in April to Singapore's Temasek Holdings Pte. The US bank and its funds had previously divested at least US$7.76 billion worth of ICBC shares in four sales since June 2009, data compiled by Bloomberg News show.
"The sale may mark an end to the recent rally in Chinese bank shares because it does reflect a neutral, if not pessimistic view, of their valuations and ability to sustain profit growth," said Chen Xingyu, a Shanghai-based analyst at Phillip Securities Pte. "Goldman can put the proceeds from the ICBC sale to better use."
Investing in local lenders in China is reaping bigger profits for foreign banks than operating their own franchises in the world's second-largest banking market.
The Western firms' gains on those stakes are set to exceed their investments, with over US$20 billion in holdings remaining even after they recouped about US$24 billion. BNP Paribas SA, France's largest bank, is among the latest global financial firms to boost investments in China as the local lenders' profits defy the global economic slowdown and rise to a record.
Goldman Sachs sold 1.35 billion shares at HK$5.77 (74 US cents) each, 3 percent lower than the Chinese lender's HK$5.95 closing price in Hong Kong on Monday, the New York-based bank said. Goldman Sachs has no immediate plans to sell more stock, said Edward Naylor, a Hong Kong-based spokesman.
ICBC fell 2.2 percent, the most since November 8, to HK$5.82 in Hong Kong yesterday. The stock had risen about 49 percent as of Monday from its 2012 low on July 12.
The shares have gained 5.8 percent this year and about 13 percent since Goldman Sachs's private-equity funds sold a US$2.5 billion stake in April to Singapore's Temasek Holdings Pte. The US bank and its funds had previously divested at least US$7.76 billion worth of ICBC shares in four sales since June 2009, data compiled by Bloomberg News show.
"The sale may mark an end to the recent rally in Chinese bank shares because it does reflect a neutral, if not pessimistic view, of their valuations and ability to sustain profit growth," said Chen Xingyu, a Shanghai-based analyst at Phillip Securities Pte. "Goldman can put the proceeds from the ICBC sale to better use."
Investing in local lenders in China is reaping bigger profits for foreign banks than operating their own franchises in the world's second-largest banking market.
The Western firms' gains on those stakes are set to exceed their investments, with over US$20 billion in holdings remaining even after they recouped about US$24 billion. BNP Paribas SA, France's largest bank, is among the latest global financial firms to boost investments in China as the local lenders' profits defy the global economic slowdown and rise to a record.
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