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Buffett is eyeing Chinese Banks?

October 05, 2006

Buffett made money on PetroChina. Is he also looking at Chinese banks? Shares of China Merchants Bank (3968) and Bank of Communications (3328) climbed Tuesday to all-time highs since listing, as heavy trading in warrants drove the lenders. China Merchants Bank, the mainland's sixth-largest lender, closed at HK$11.72, the highest since its September 22 listing and a jump of 6.74 percent from Friday's close. A total of 209 million shares changed hands.

Bank of Communications (3328), the fifth-largest lender by assets, climbed to HK$5.72 Tuesday, also a new high since its trading debut. The stock was up 2.19 percent or 12 HK cents, with 87 million shares traded. Turnover amounted to HK$487 million.

There was also heavy trading in China Construction Bank (0939) and China Merchants Bank shares, with transactions amounting to HK$3.6 billion and HK$2.39 billion. In terms of total turnover on the day, the two banks ranked one and two by value.

A rumor about a well-known US billionaire was a catalyst for heavy trades. "There was a rumor that Warren Buffett is eyeing China Merchants Bank and this boosted sentiment," a broker said.

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Rjlull - 10 years ago    Report SPAM
How does one purchase these Chinese bank stocks via US brokerage accounts? I have searched to no avail. Would there be any significant trading costs? Any further caveats?

The China Merchants Bank IPO (600036.SS) appeals to me.

Thanks for any help.
Wildcat - 10 years ago    Report SPAM

Here is a report on cheap Asian stocks.

Can you trust the accounting?

What is the IV ? Cheap how. Buffett does not chase highflyers.

Buffett uses Moody,s manuels and Value line to find stocks.

He read 12,000 pages to find 2 values .

He made a killing in Korean stocks off a list a broker gave him.

Buffett never,ever buys IPO,s. Must have 10 yrs of EPS.

He got Petro China for 33% of what an American oil co cost.

Pays a big dividend . Soild balance sheet. Took the political risk.

Buffett spots value right off the bat. Uses value metrics.

There is a lot know . Value is not easy.
JAMESRAINIERAMATO - 10 years ago    Report SPAM
I bought CHINA MERCHANTS BANK CO L (CIHKF: OTC) & BANK OF COMMUNICATIONS CO (BKFCF: OTC) Through my Online Broker. The Risk is extreemely low considering the cost of the stocks vs a LONG TERM HOLD on these stocks. Even though the US has felt the Chinese effect, the real effect is comming a decade down the road when these financial insstitutions (given thier financials being above board which, depending on who you talk to can be soild or a solid nightmare) have real economic wealth and strength. China although it may look like it, isn't a microwave. The real money to be made in China is like a crock pot, make your choices, and let it simmer for a long time.

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