Re: [A-List] Bank Give Away

[Michael Hudson <michael.hudson@xxxxxxxxxxxxx>]

Dear Henry,
    The key in explaining to the Chinese why they have made a strategic
mistake is to ask them, "What are you going to do with this $3.8 billion?
Are you just going to buy US Treasury bills? What will they earn? Do you
think you will ever end up getting paid?"
    Michael Hudson


On 1/29/06 1:29 AM, "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx> wrote:

> If 10% of ICBC, a bank that has 20% of the Chinese banking market and
> 21,000 branches, is sold for US$3.78, the total valuation of  the bank
> is US$37.8 billion. This translated the total banking market of China to
> be worth only US$189 billion.
>
> By buying 10% of ICBM for US$3.78, Goldman and Co bought 2,100 ICBC
> branches for US$1.8 million each.
>
> Those who run the Chinese banking sector must be very stupid.  Its the
> Year of the Dog alright!
>
> Henry C.K. Liu
>
>
>
>
> ICBC to seal stake sale to foreigners: report
> 2006/01/27 08:31
>
>   Industrial and Commercial Bank of China (ICBC) is expected to seal a deal in
> Beijing
>   today to sell a combined 10 per cent stake to three foreign strategic
> investors for
>   US$3.78 billion, market sources said.
>     Under attack for looking more like financial investors, Goldman Sachs,
> Allianz Group and
>   American Express have drastically enhanced the strategic element of their
> share
>   acquisition proposals, including a large capital contribution from the
> United States
>   investment bank.
>     "There has been a big increase in the strategic focus since this was first
> reported,"
>   said a source who was briefed on the situation.
>     Instead of forming a consortium, as previously expected, the investors
> will sign
>   separate investment and strategic co-operation agreements with China's
> largest commercial
>   bank, which has about 20 per cent of the banking market and 21,000 branches
> throughout the
>   country.  <SCMP>
>
>
>
>