Investor seeks to unload HK$1.4b of BOC shares
Wong Ka-chun and Tim LeeMaster
A shareholder of Bank of China, the nation's second-largest bank, was seeking to sell HK$1.42 billion worth of shares after the market closed yesterday, sources said.
The undisclosed shareholder was offering up to 354.5 million H shares at HK$4 each, a 1.72 per cent discount to the stock's closing price of HK$4.07 yesterday, a sale document sent to fund managers said.
The deal was being arranged by investment bank giant Goldman Sachs. The bank could not be reached for comment.
'It could be one of about half a dozen shareholders based on that number of shares,' said one equity capital syndicate banker.
BOC attracted a handful of foreign investors in the state-owned lender before it raised HK$75.4 billion in an initial public offering in Hong Kong in June last year.
Temasek Holdings, a Singapore government investment arm, UBS and a consortium led by the Royal Bank of Scotland Group bought stakes in BOC worth a total of US$5.1 billion.
Those shareholders cannot sell their shares before the end of next year.
Separately, 12 corporate investors including Bank of Tokyo-Mitsubishi UFJ, China Life Group and Bank of East Asia as well as some Hong Kong billionaires bought 6.37 billion H shares or 2.62 per cent of the enlarged share capital for HK$18.8 billion. These investors cannot offload their stakes until a year after the listing.
China banking stocks have soared in the past quarter to an irrational high, supported by the potential appreciation of the yuan and the booming mainland economy, according to a fund manager.
BOC shares have gained 37.98 per cent from their listing price of HK$2.95.
'BOC has been trading expensively for quite a long time, as its current share price implies a 2.4 times 2007 price-book ratio, much higher than international peers such as Citigroup and HSBC,' said a portfolio manager who was involved in BOC's public offering.
Among BOC's domestic rivals, China Construction Bank Corp is trading at three times price-book value and Industrial and Commercial Bank of China is at 3.1 times.