Following Bank of America’s sale of two billion shares in China Construction Bank, almost all foreign banks with the exception of HSBC no longer hold strategic stakes in any Chinese banks

September 5, 2013 Leave a comment

Sale of CCB shares not a good sign
Thursday, September 05, 2013, The Standard
Global stock markets found an excuse to rise yesterday as US President Barack Obama awaited his lawmakers’ approval to strike Syria. The Shanghai Composite Index rose 0.2 percent to 2,127, hitting a multiweek high. But it is still 13 percent below the year-high – 2,444 – set in February, or 38 percent below its 2009 high of 3,478 reached in August of that year. We have no reason to turn bullish. Following Bank of America’s sale of two billion shares in China Construction Bank, almost all foreign banks with the exception of HSBC Holdings (0005) no longer hold strategic stakes in any mainland lender. This is not a good sign. Foreigners are selling while state-owned China Investment Corporation is buying. The market has kept discounting possible systemic risk in China linked to shadow banking, wealth management products or local government debt. As more senior officials of PetroChina (0857) face investigations, companies linked to the firm are also coming under scrutiny. I am talking specifically about Wison Engineering Services (2236). Its yearly profit is about 500 million yuan (HK$630 million). The stock is now suspended.

Filed under Macro Trends

Unknown's avatarAbout bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

Leave a comment