UPDATE:Huijin:Lockup Expiry Doesn't Mean Will Cut ICBC Stake
October 21 2009 - 1:34AM
Dow Jones News
Central Huijin Investment Ltd. said Tuesday that the imminent
expiry of a lockup period on its holdings in Industrial &
Commercial Bank of China Ltd. (1398.HK) doesn't mean it will reduce
the stake.
Huijin stopped short from saying it won't sell any shares in
ICBC but its statement is an apparent effort to reassure jittery
investors over the fate of ICBC as a large portion of its shares
will soon be free to float on the market.
Huijin's holdings of 118 billion ICBC's yuan-denominated A
shares will be freed for sale from Tuesday next week.The shares
represent about 35% of ICBC's capital base.
At midday, ICBC's A-shares were up 0.20% to CNY5.12, while the
benchmark Shanghai Composite Index was 0.17% lower to 3079.22 after
it closed at its highest closing level in more than two months
Tuesday.
Central Huijin, the domestic investment arm of China's US$300
billion sovereign wealth fund, said in a statement posted on its
Web site the expiry won't affect the government's requirement that
Huijin hold controlling stakes in major state-run financial
institutions.
Huijin will continue to "ensure the state owns controlling
stakes in major state-run financial institutions and support these
institutions to operate and develop business in a stable way", the
statement said.
Huijin's statement came after Allianz SE (AZ) and American
Express Co. (AXP) said Monday they would keep their holdings in
ICBC. The lockup period for the German insurer's 0.96% stake in
ICBC and the U.S. credit card issuer's 0.19% expired Tuesday.
It's the second time in a month Huijin has given such an
assurance, apparently aimed at easing investor concerns that bank
shares could come under pressure as lockup clauses, which were part
of Chinese lenders' listing plans, expire.
In mid-October, Huijin said it would continue buying shares in
the country's three largest banks over the next year.
Last month, Huijin completed a year-long program to buy shares
in ICBC and its two state-run peers - China Construction Bank Corp.
(0939.HK) and Bank of China Ltd. - on the open market.
Another 118 billion, or 35% of ICBC's A-shares held by the
Ministry of Finance are also under a lockup clause until Monday and
will be free for float Tuesday.
Of the total 334 billion shares of ICBC, 13.2 billion H-shares
now trading in Hong Kong are held by Goldman Sachs Group Inc. (GS).
Goldman Sachs' shares will continue to be subject to a lockup
period until April next year, while the rest will be all free for
float from Tuesday next week, ICBC said in a statement
Wednesday.
-Victoria Ruan contributed to this article, Dow Jones Newswires;
8610 6588-5848; victoria.ruan@dowjones.com
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