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National welfare fund eyes ICBC stake
(Shenzhen Daily/Agencies)
Updated: 2005-11-21 08:45
The national welfare fund is in talks to invest between US$700 million and
US$800 million in the country's largest bank, Industrial and Commercial Bank of
China (ICBC), the China Securities Journal said Friday.
The paper also said the fund was interested in taking a stake in the Bank of
China (BOC), but uncertainties surrounding a strategic investment in BOC by
Singapore state investment agency Temasek Holdings means that plan would not be
finalised quickly.
The newspaper did not identify the source of its information.
ICBC is planning an initial public offering outside of China next year, and
has already signed a deal in principle to sell a 10 percent stake to Goldman
Sachs' private equity arm, European insurer Allianz AG and American Express Co.
for more than US$3 billion.
BOC, the country's third-largest bank, is also planning to float shares to
foreigner investors next year and has lined up Asian Development Bank, Royal
Bank of Scotland Group Plc., UBS and Temasek, which together plan to take a 24
percent in the bank.
However, the deal has yet to be cleared by Central Huijin Investment Co.,
BOC's major shareholder, and by the China Banking Regulatory Commission (CBRC).
BOC said earlier this month that it still hopes to win approval for Temasek
to become a strategic partner.
China's largest State banks are planning IPOs and enlisting strategic foreign
investors to bring cash and badly needed expertise ahead of the opening up of
China's domestic banking market to foreign lenders in late 2006.
Official media have that the fund had expanded to 191.7 billion yuan by the
end of September this year, with nearly half of its value held in bank deposits.
The fund has also invested in domestic stocks and bonds.
The fund was set up in 2002 to manage a grossly under-funded pension system,
and has been given the go-ahead by the government to invest overseas.
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