Aug 31, 2012
Translated by Zhu Na

The half-year report of the Industrial and Commercial Bank of China (ICBC) shows that Central Huijin Investment Ltd. (Central Huijin), an investment company directly under the control of China's State Council, has increased its stake in the bank over the second quarter. According to the report, Central Huijin purchased an additional 7 million ICBC shares, taking its stake in the bank to just over 35 percent.

The three other state-owned banks that make up China's "Big 4" have already released their half-year reports.

These reports also reveal that Huijin increased its stake in China Construction Bank (CCB) by 3.85 million shares, in the Bank of China by 763,000 shares and in the Agricultural Bank of China (ABC) by 8 million shares respectively.

These purchases have helped to lift the overall stake that Central Huijin has in the country's four big banks.

As of end of June, Huijin hold 35.4 percent of ICBC shares, 57.14 percent of CCB shares, 67.63 percent of Bank of China shares and just over 40 percent of shares of Agricultural Bank.

In fact, this is the third consecutive quarter during which Huijin has lifted its stakes in the four major banks through purchases made in the secondary market.

Market analysts believe that the state-owned investment company is taking advantage of the relatively low price of bank shares.

Taking ICBC's shares as an example, the price of a single ICBC share was 4.24 yuan in early January, but, as of the end of June, its price had fallen to only 3.95 yuan a share, a drop of nearly 7 percent.

Central Huijin (中央汇金投资有限公司) is a state-owned investment company that was established in 2003. Although connected to China Investment Corporation (CIC), China's sovereign wealth fund, the company is under the direct control of the State Council and is responsible for "preserving and enhancing the value of state-owned financial assets."

Links and Sources
China Finance Online: 汇金连续三季度增持四大行 频率历史上罕见
Economic Observer Online: Central Huijin Buoys China\'s Banks