Govt fund to continue buying big banks' shares

(Agencies)
Updated: 2009-10-12 13:26

SHANGHAI: Central Huijin, an arm of China's sovereign wealth fund, will continue to buy yuan-denominated A shares in the country's three biggest listed banks over the next 12 months, the lenders said on Monday, offering fresh signs of government support for the stock market.

The agency, which is the parent company of Industrial and Commercial Bank of China (ICBC), Bank of China and China Construction Bank (CCB), also recently bought additional shares in the three on the Shanghai Stock Exchange, the banks said in separate statements.

Last month, the banks said Huijin had completed a year-long share-buying scheme introduced on Sept. 23, 2008 to bolster share prices and stem a stock market slump during the worst of the global financial crisis.

The revival of Huijin's share-purchase programme comes as 236 billion A shares of ICBC will become tradeable on Oct. 27 after a lock-up period expires, exerting pressure on a stock market which is down 16 percent from its August peak due in large part to pressure from new supplies of equity.

Chinese banks have extended record loans this year to support the government's 4 trillion yuan ($586 billion) stimulus plan but have been hit by thinner profit margins due to stiff competition.

Huijin recently bought 30 million ICBC shares, increasing its stake to 35.42 percent from 35.41 percent, ICBC said on Monday.

Huijin has also bought 5.1 million shares in Bank of China, increasing its stake to 67.5 percent, and 16.1 million shares in CCB, increasing its holding to 57.09 percent.