ICBC Rises After Allianz, AmEx Say No Plans To Reduce Stakes
Shares of Industrial & Commercial Bank of China Ltd.
(1398.HK) rose Tuesday after two foreign investors said they have
no immediate plans to reduce their stakes in the world's largest
lender by market value.
At 0330 GMT, ICBC's yuan-denominated shares were up 1.4% at
CNY5.07. The benchmark Shanghai Composite Index was up 0.9% at
3066.45. The lender's Hong Kong dollar-denominated shares were up
2.6% at HK$6.35, while the Hang Seng Index was up 0.7% at
Allianz SE (AZ) and American Express Co. (AXP) said Monday they
will keep their holdings in ICBC after a lockup period expires
Tuesday. The German insurer owns 0.96% of ICBC, and the U.S. credit
card issuer owns 0.19%.
The comments were in stark contrast to the companies' moves in
April, when they raised $1.9 billion by halving their respective
stakes in ICBC as soon as a previous lockup period expired. The
sales followed similar moves by a number of foreign companies that
had sold their holdings in Chinese banks to shore up their capital
as they felt the effects of the global financial crisis.
"The latest comments by Allianz and American Express show the
worst impact of the world financial crisis may have passed so that
they have less of a need to sell their Chinese assets to raise
funds," said Jin Lin, an analyst at Shanghai-based Orient
In addition, Chinese banks look more attractive to foreign
investors as they have been largely sheltered from the global
financial crisis, said Jin.
"With the backing of the central government, state-run banks
such as ICBC have enjoyed much fatter interest margins than their
ICBC's shares have risen more than 20% in Shanghai since Allianz
and American Express reduced their stakes in April.
Though analysts said they believe the two foreign investors will
sell their remaining holdings in ICBC within the next three years,
they added the effect of potential divestments would be mild as the
sales would likely take place through private placements.
The German insurer said in a statement Monday: "In case of a
potential disposal in the future, Allianz will deal with the shares
in an appropriate way through close cooperation with ICBC, and
explore all potential methods of sale that would maximize value and
minimize market impact, with a preference for a private placement
sale to investors."
China's $300 billion sovereign-wealth fund promised earlier this
month to continue buying ICBC shares over the next 12 months. The
government fund owns 35% of ICBC through its investment arm,
Central Huijin Investment Ltd.
Allianz, American Express and Goldman Sachs Group Inc. bought a
combined 8.4% stake in ICBC for US$3.8 billion in May 2006, a
couple of months before the Chinese lender's $21.9 billion initial
Goldman Sachs previously held a 4.9% stake in ICBC. The U.S.
bank raised $1.9 billion in June by selling 20% of its holdings,
but it has agreed to a new lockup for its remaining holdings until
April 28, 2010.
-Rose Yu contributed to this article, Dow Jones Newswires; 8621