ICBC denies reports of Wing Hang purchase
Updated: 2009-06-27 08:04
(HK Edition)
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A woman walks past a Wing Hang Bank branch in Hong Kong. Bloomberg News |
BEIJING/HONG KONG: Industrial and Commercial Bank of China (ICBC), the world's largest bank by market value, on Friday denied rumors it is in talks to buy Wing Hang Bank, a small Hong Kong lender.
Wing Hang shares were up 9 percent at midday on talk that major shareholders may sell the bank, despite a denial by ICBC, brokers said.
Wing Hang shares kept on climbing in the afternoon session and jumped 10.53 percent, or HK$7.05, to close at HK$74 in Hong Kong on Friday.
The shares posted their biggest gain in nearly three months on Thursday, on rumors about a possible acquisition by ICBC, DBS said in a note on Friday.
ICBC shares slid to HK$5.38 from its opening price of HK$5.45 in the morning session, before rising 1.11 percent or HK$0.06 to close at HK$5.45.
There was also talk that ICBC could buy Wing Hang and later inject it into its Hong Kong arm, ICBC (Asia), analysts said.
"There are no such talks," ICBC president Yang Kaisheng told Reuters.
Mainland banks are keen to buy small banks in Hong Kong to give them a presence in the city that has long been a gateway for overseas investment into their home market.
"Hong Kong could also serve as a platform for going international," said Kim Eng banking analyst Ivan Li.
Some mainland banks still have no presence in Hong Kong, including Agricultural Bank of China, China Everbright Bank and China Minsheng Banking Corp, which is seeking a listing in Hong Kong.
"Hong Kong is still one of the major financial centers in the world, and valuations (of local banks) are more reasonable now while the market is stable as well," he said.
Last year, China Merchants Bank, the country's sixth-largest lender, elbowed out Australia and New Zealand Banking Corp and ICBC to buy control of Wing Lung Bank for $4.66 billion.
Analysts expect the deal to trigger further bids for small Hong Kong banks.
China Daily - Reuters
(HK Edition 06/27/2009 page2)