Institutional Investors Sell BoCom and Buy SPD Bank
Between 12 and 16 May 2008, both Shanghai Pudong Development Bank Co. Ltd (600000) and Bank of Communications Co. Ltd (601328) saw the lock-up period for a large number of their restricted shares expire. Although stocks of the two banks performed well in general, institutions have expressed different opinions regarding them.
According to Topview, a financial data provider, the stock price of Bank of Communications rose in three consecutive days. On 12 May, institutions sold RMB 50.33 mln of the company's stock. The following day saw a net gain of RMB 76.02 mln by institutional investors. However, on Wednesday and Thursday (14 and 15 May), institutions again conducted heavy selling of Bank of Communications. From 12 May to 15 May, institutional investors conducted net sales of RMB 64.86 mln. In addition, from 5 May to 9 May, shares of Bank of Communications declined for five consecutive days. The stocks saw net capital outflows nearly every trading day, with the highest daily outflow equaling RMB 218.8 mln.
In contrast, institutions showed their favour for Shanghai Pudong Development Bank. On 12 May, as newly-released tradeable shares flooded onto the market, institutions dumped the stock creating RMB 299 mln of capital outflow. Funds dominated the top ten selling seats and the top four buying seats of the stock, illustrating that the attitudes of funds to the stock differ widely. On 13 and 14 May, institutional investors bought into Shanghai Pudong Development Bank heavily, resulting in capital inflows of RMB 252.5 mln for two days in a row. On 13 May, Shanghai Pudong Development Bank surged 8.72%.
As for the shareholder structure of Shanghai Pudong Development Bank, institutional investors held 45% of the bank's common shares on 16 May 2008. From 12 to 16 May, the percentage of institutional investors remained at that level, indicating that they were confident in holding the stock and no dumping occurred following the expiration of the lock-up period.
Source: China Business News
Date: 19 May 2008
CN01/JC/BT/KM
