Bloomberg News

Central Huijin Investment Boosts Stakes in ICBC, Bank of China

January 08, 2012

Jan. 6 (Bloomberg) -- China’s state-run Central Huijin Investment Ltd. bought more shares in Industrial & Commercial Bank of China Ltd. and Bank of China Ltd. to bolster support for the lenders.

Central Huijin’s respective holdings in ICBC and Bank of China were 35.43 percent and 67.6 percent as of Dec. 31, according to statements from the two lenders yesterday.

Chinese banks’ valuations fell last year below the level reached during the 2008-2009 global financial crisis on concern that loans may sour. Central Huijin, set up to hold the government’s stakes in the lenders, helped spur a three-day rally in the Shanghai Composite Index when it bought bank shares on Oct. 10 as China took steps to support the market.

Central Huijin bought 38.5 million ICBC shares following its purchase of 14.6 million shares on Oct. 10. The latest stake purchase is valued at HK$182.5 million ($23.5 million) based on ICBC’s closing price in Hong Kong yesterday.

The state-run company increased its interest in Bank of China by 144.6 million shares since it bought 3.51 million shares on Oct. 10, according to the lenders’ filings to the Hong Kong stock exchange. The most recent purchase is valued at HK$422 million based on yesterday’s closing price.

ICBC, China’s biggest lender, slid 1.7 percent to HK$4.66 as of 10:39 a.m. local time. Bank of China, the country’s third- largest bank, declined 1.7 percent to HK$2.87. Shares of the four biggest banks have tumbled an average 22 percent in the past 12 months in Hong Kong.

--Editors: Russell Ward, Nathaniel Espino

To contact the reporter on this story: Stephanie Tong in Hong Kong at stong17@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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