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China shares jump on RBS sale of BoC
14 Jan 2009
Chinese bank shares rose in Hong Kong after Royal Bank of Scotland sold its stake in Bank of China.
The sale led to buying in Hong Kong that pushed Bank of China shares up 4.9%.
RBS, now controlled by the government after a bail-out, sold 10.8 billion shares for HK$1.71 (22p) each, about 7.6% less than BoC's closing price in Hong Kong yesterday.
RBS had been cagey about a sale of the shares which had been locked up following its investment in the Chinese bank. Other shareholders including UBS and Bank of America also reduced holdings after the lock-up period ended.
HSBC says it has “no intention” of reducing its 19% stake in China's Bank of Communications and Goldman Sachs, which still owns 16.5 billion shares in Industrial & Commercial Bank of China, has agreed not to sell the shares until after April.
BoC's Hong Kong-traded shares have fallen 48% in the past year, cutting the value of RBS's stake, as it racked up $3.7 billion (£2.55 billion) of losses from securities linked to US home loans, more than any other Chinese lender.
