George Soros Turns To
George Soros is pouring money into Chinese stocks
Forbes.Com,
19 Nov 2009
That's because the billionaire believes
winner after the global financial crisis passes, while the United
States will lose the most in the long run from the recent turmoil.
In his latest investment, George Soros reportedly spent a combined
$126 million on subscriptions for new shares of China Minsheng Bank
and Longfor Properties in their initial public offerings in
During the four-day international road show that kicked off this
Monday, China Minsheng Bank has attracted $14.1 billion worth of
orders from international investors, about three times
oversubscription for the institutional tranche. Among the big orders,
Soros Fund Management has spent about $100 million on subscriptions
for the new Hong Kong-listed H-shares. Hopu Investment, a private fund
run by well-known Chinese investment banker Fang Fenglei, also placed
a huge order of up to $1 billion, according to information leaked from
merchant banks.
China Minsheng plans to raise as much as $4.1 billion in a
IPO that would be the world's fourth largest this year. The IPO's
public placement portion began Friday for retail investors to
subscribe at 8.50 to 9.50
With total assets of 1,402 billion yuan ($206.2 billion), total loans
to customers of 893.5 billion yuan ($114.6 billion) and total deposits
of 1,099.5 billion yuan ($141.0 billion), China Minsheng is the
nation's seventh-largest lender. In its listing prospectus, Minsheng
forecast it would make more than 11 billion yuan ($1.6 billion) in
consolidated net profit for this year.
After floating new shares in
expected the bank's capital adequacy ratio to increase to more than
12% from 8.57%, while core tier 1 capital will advance to about 9%
from the initial level of 6.02%, approaching the international
standard. In its third-quarter results announcement this week, British
banking giant HSBC disclosed its tier 1 ratio increased to 10.3%, and
the core equity tier 1 capital ratio strengthened to 9%.
Its scale aside, Minsheng's shareholding structure might be what's
most attractive to Soros.
Having already listed its A-shares in
non-state lender in
Chinese government does not control any stakes in Minsheng, the bank
has not received any government funds to carve out bad assets.
Besides Minsheng, the investment fund under Soro has also subscribed
up to 200 million
Longfor Properties, the top developer in
city,
($906.4 million) from issuing new shares this week that it will use to
acquire new projects and to finance the outstanding land costs of
existing projects. Its trading debut is scheduled for Nov. 19.
Sources from merchant banks revealed that Longfor had received more
than $15 billion in subscriptions. For the institutional tranche
alone, it recorded about 12 times oversubscription.
Besides Soros, Chinese sovereign-wealth funds also contributed to the
overwhelming orders. Longfor disclosed in its listing prospectus that
it had already signed up five cornerstone investors. They include
Government of Singapore Investment Corp, the Singapore-listed Hong
Kong Land and China Ping An Insurance, as well as Bank of China
Soros is keen to invest in
latest social and economic developments -- and to help him spot out
investment targets -- he recently met some Chinese scholars and
experts in
Best known as "the man who broke the Bank of England" by short-selling
sterling to gain $1.1 billion in 1992, Soros has been a prophet to
investors around the world.
At an Oct. 30 lecture titled "The Way Ahead, Comments On
crisis will totally alter the existing world order.
"The
emerge as the greatest winner," Soros predicted, because the crisis in
the
the financial system, while
financial crisis.
Despite the fact that
year, Soros believes
were left largely unscathed.
"
creative, inquisitive and entrepreneurial activity of the people who
are allowed to pursue their self-interests, while the state can cream
off a significant portion of the surplus value of their labor by
maintaining an undervalued currency and accumulating a trade surplus.
So,
Soros contends that
investments in its infrastructure while also supporting its exports by
investing in and extending credit to its trading partners. It had been
financing its exports to
back on spending,
said, while the
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