Singapore Votes For ICBC 新加坡看好中国工商银行
After scooping up a steady stream of Chinese bank shares being dumped by other major institutional investors over the past year, the Singapore government appears to be placing its bets on China’s biggest lender, ICBC (HKEx: 1398; Shanghai: 601398), based on its latest move. Before I get into the details behind the lmove by Temasek, Singapore’s big sovereign wealth fund, I should say that I agree that ICBC looks like the most attractive of China’s big bank stocks, both due to its traditional position as a business lender in the domestic market and also for its smart foreign expansion strategy focusing on developing markets. Now let’s take a look at the actual news, which has Temasek confirming that it is selling $2.4 billion worth of shares of 2 other top Chinese lenders, Bank of China (HKEx: 3988; Shanghai: 601398) and China Construction Bank (HKEx: 939; Shanghai: 601939). (English article) That sale comes just weeks after Temasek purchased around $2.5 billion worth of ICBC shares from Goldman Sachs (NYSE: GS), which joined other major global banks including Bank of America (NYSE: BAC) and Royal Bank of Scotland (London: RBS) in selling off big stakes they purchased in China’s major lenders 5-6 years ago. (previous post) Throughout the sell-off, Temasek has been one of the few cash-rich investors that has continued to show an interest in the Chinese bank shares, which many investors have avoided over concerns they may be on the brink of a long downturn if and when many of the questionable loans they made under Beijing’s economic stimulus plan during the global financial crisis start to sour. Now Temasek is finally realizing it may not be too smart to invest so much money in this particular sector, and is trimming its holdings to focus on ICBC, which it sees as the strongest player in the group. As I said above, I personally agree with Temasek since ICBC is probably the best positioned to suffer the least in the coming downturn for China’s banking sector. As a lender to businesses, ICBC should have less exposure to the real estate sector, which is expected to drop sharply in the next 2 years as Beijing shows a steadfast determination to cool the country’s overheated property market. On the global front, ICBC has made a steady stream of targeted investments in emerging markets in Latin America, Africa and Southeast Asia, seeking to leverage its expertise in those kinds of markets to diversify from its strong dependence on China. Last year the bank’s profits from overseas operations rose 18 percent, trailing its 37 percent rise in overall profits that year. But as profit growth from domestic operations slows or even contracts in the months ahead, steadiness in the international business will help ICBC to outperform many of its peers.
Bottom line: Singapore’s focus on ICBC reflects the bank’s relatively strong position compared with its peers as the broader Chinese banking sector heads into a downturn.
Related postings 相关文章:
◙ Bank of China Results: Downturn Ahead 中行业绩黯淡 或预示银行业将迎来低迷期
◙ ICBC, Huawei: It’s Cold Out There 工商银行、华为：国外市场冷清
◙ Goldman Flees ICBC as Bank Crisis Looms 中国银行业危机隐现 高盛迅速转让工行股票
