Bank of America sells $2.8 billion China bank stake (UBS, RBS for BOC share sales)

Reuters ^ | 01/07/09 | Tony Munroe

[TigerLikesRooster]

Bank of America sells $2.8 billion China bank stake

By Tony Munroe Wed Jan 7, 12:55 am ET

HONG KONG (Reuters) – Top U.S. lender Bank of America (BAC.N), raising cash to weather a dismal market at home, sold a $2.83 billion chunk of its holding in China Construction Bank (0939.HK) on Wednesday, dragging the Chinese bank's stock 6 percent lower.

China's three largest banks attracted big strategic investments from western financial giants at the time of their initial public offerings. Those investors are now under pressure to shed their stakes as the global financial crisis ravages the banking industry, and further sales are expected.

Bank of America sold more than 5.62 billion shares, or nearly 13 percent of its holding in Construction Bank, at HK$3.92 apiece, according to a term sheet obtained by Reuters and a person familiar with the matter, in a deal that had been widely anticipated by the market.

"The news has been expected but investors will still take it hard because BoA will most definitely sell more. They need the money," said Francis Lun, general manager with Fulbright Securities in Hong Kong.

Bank of America realizes a profit of about $1.13 billion on the stake sale, based on Construction Bank's IPO price. It sold

the stake at a 12 percent discount to the stock's Tuesday close.

[TigerLikesRooster]

Ping!

[UCFRoadWarrior]

The reality more and more is evident....that free trade with Commie China has been nothing more than wealth-redistribution to the extreme...and now even Commie China is a bad investment.

[TigerLikesRooster]

When people are engaged in too-good-to-be-true scheme for a long time, many enjoy handsome gains for a while, but eventually most of them lose except a few. That is, they would fare worse than before the whole scheme took off and people got hooked.

That is what is happening to U.S. and China.

[ponder life]

That is what is happening to U.S. and China.

What is happening is a global downturn that is affecting everyone, including US/China trade. But I gurantee you (without reservation), once this global slowdown is over, US/China trade will be more vibrant (and more entrenched) than before. As well as EU/China, Middle East/China, Asia Pacific/China trade, etc.

China has less than 50% of her population living in urban areas. Imagine the level of trade with the rest of the world, when they reach 90%.....and when they shift their manufacturing (happening right now) from labor intensive industries to technology intensive industries.