BofA to reduce China bank's dust

HK $4.2, Bank of America finally sold the CCB (0939.HK) H shares. Since May 7 The bank holds the construction bank's 13.5 billion-share lock-up period expired, the market has been rumors BofA will reduce its stake.　　May 13, CCB confirmed that the Bank of America reduced its 13.5 billion shares of the CCB, with a price of HK $4.2, the sale price of HK $56.7 billion. This year, the largest single foreign institutions to reduce the stakes in Chinese banks, finally settled.　　Market participants believe that as the signal of economic recovery, international agencies will look back on the mainland banking stocks. The lure of price in the US government's "stress test" of its banking sector, US banks, America's biggest assets, were not "qualified" and were judged to require an additional $33.9 billion trillion in funding.　　With so much pressure on financing, it is easy to understand that BofA is selling its H shares. The bank's shares, which were sold at HK $4.2, are about 14% more than the market price for the sale. But Bank of America still earns 42 billion Hong Kong dollars by deducting the initial cost of a stake.　　Bank of America's last reduction in the stake was on January 7 this year, the Bank of America sold 5.62 billion shares of CCB, the price is 3.92 Hong Kong dollars per share, the distribution price than market discount to 11.9%. "This is a big discount, mainly because of the large number of shares, but it is still in the market expectations." Li Jianchong, a banking analyst at Fortune Securities, said the market was more positive.　　Prior to the construction of CCB shares have been too big, has been the word of the party on the use of the transaction. However, according to media reports, the day after the Sell-off, a shareholder in the 4.84~5.03 Hong Kong dollar price range, the sale of 462 million U.S. dollars worth of CCB shares. Later that day, another shareholder dumped CCB's $124 million worth of shares at HK $4.82 per share.　　These prices are higher than BofA's selling price. A foreign agency analyst who has long followed CCB told reporters that private placement prices and direct selling prices in the open market are different, the former need to bear greater market risk. However, he said, not the market speculation of the "left hand inverted right", according to the CCB's announcement, the offshore fund holdings part of the settlement on May 19, 2009, the rest on May 29, 2009 delivery, but another agency. "With this opportunity to sell, there are placing prices as a support."　　"She believes that this is not the fundamental issue of CCB." According to the "Share purchase Agreement" signed by Bank of America and the related transaction, the transferor of this change of interest is Bank of America, the transferee is an offshore fund, Chinese Life (601628.SH) insurance (group) company, China Insurance Co., China Life Insurance (Overseas) Co., Ltd. and BOCI Asia Limited. The offshore fund took over 8.527 billion shares, while China Life took over 2.768 billion shares and 2.214 billion shares with BOC International.　　Previously, CCB has confirmed that the party also has Hopu and Temasek. and Temasek'sThe market is understood as a bullish signal. Temasek has already reduced its stake in the Minsheng Bank (600016.SH) but still holds stakes in BOC and CCB. "The market has been speculating on whether Temasek will reduce its holdings, but now it is at least understandable that it is still bullish on Chinese banking stocks."　　"The foreign agency analyst said to reporters. After BofA dumped its stake in the bank, market participants believed that the sale of Chinese banks in Hong Kong would greatly reduce the value of international institutions since the changes entered into May, Hong Kong stocks have seen strong gains, and Chinese shares are also being sought after.　　One of the key investments in recent hot money inflows into Hong Kong includes Chinese banks. "Banks are business cycle industries, and investors see economic recovery and think they can invest in mainland banking stocks." "Tai Fook Securities Li Jianchong said.　　At present PB (City net rate) valuation, now the majority of Hong Kong stocks of Chinese banks are below twice times the value of investment. The recent valuation of bank stocks by foreign investment banks has changed. RBS's latest research report on CCB has replaced PB (market/per-share net worth) for the ratio of tangible common shares to price. The report argues that financial assets generally reduce prices, book value due to the goodwill and other intangible assets, and the shareholder funds deducted intangible assets and preferred shares calculation of tangible common shares more reflect the state of bank assets.　　From this standard, the mainland banking unit has more advantages than international banks and attracts more investors. A foreign fund manager told reporters that the International fund, in allocating financial assets, took into account the widespread problems of foreign banks and the impact of local banks in Hong Kong, so it is now inclined to allocate some domestic banking stocks. With the influx of hot money into Hong Kong, the allocation of financial assets to the more money. In the case of the funds it serves, the company has been allocating ICBC's H shares since April. He argues that large banks benefit from projects such as infrastructure and therefore have more value in investment.　　And the Bank of America to sell the CCB news, a large number of international funds also flocked to the CCB shares expressed interest in buying. The Foreign fund manager believes that the valuation of mainland banks should see a premium for the domestic economic outlook, and that the domestic economy is recovering faster than the foreign economy, so banks will benefit. "Although the economic situation is not fully clear, domestic banks are more cautious, such as the first quarter of the construction Bank of the provision of the level of improvement, indicating that its operation is relatively stable."　　"DBS ' latest rating will increase the target price of CCB's H shares from HK $4.40 to HK $6.00, equivalent to 2.3 times times the PB." Recently, domestic fund managers continue to increase their share of bank shares, leading to bank stocks ahead of other sectors. But in Hong Kong equities, the growth in the bank's shares is not at the forefront. Li Jianchong that this is because investors have doubts about the real recovery of the economy, coupled with the wind of short speculation, so the price is affected by capital.