I’ve largely ignored a steady stream of announcements by China’s big 4 state-run banks these past few weeks, but the latest plans released on the same day from 2 of those seemed like a good opportunity to finally focus on this exercise that could soak as much as 400 billion yuan ($63 billion) from the market. My main reason for ignoring the announcements was mostly because they were too numerous to write about individually, and also because much of the fund raising was expected. But the sheer size of this exercise, plus the broader implications for investors, seems like a good reason for writing now. Read Full Post…
The near non-stop capital raising by major Chinese banks is showing no sign of slowing, with China Construction Bank (HKEx: 939; Shanghai: 601939) announcing yet another new plan to sell up to 40 billion yuan, or $6.5 billion, in subordinated debt to shore up its balance sheet. Similar to most recent cases, these bonds will be sold into the inter-bank bond market for domestic buyers, meaning that big state-backed institutions are likely to pay most of the bill for this latest recapitalization of a major Chinese bank, most of which are standing on the cusp of a major bad-loan crisis.
The conservative China Construction Bank (HKEx: 939; Shanghai: 601939), the nation’s second largest lender, may be preparing to take its first big steps onto the global stage, with an Indonesian deal that looks interesting though a bit risky. Media are reporting that the bank is in talks to buy a stake in closely held PT Bank Maspion Indonesia, whose owners want to sell more than 50 percent. (
