UBS, GIC Take Advantage of Hong Kong Gains by Executing Block Trades

   By Prudence Ho 
 

HONG KONG--Swiss bank UBS AG and Singapore sovereign wealth fund GIC Pte. Ltd. are among investors that started selling nearly a billion dollars in stock Monday in block trades, taking advantage of the recent surge in Hong Kong shares.

On Monday, UBS, one of the early investors in China Cinda Asset Management Co. (1359.HK), started selling about $303 million in shares in the Chinese debt-clearing agency at a price of 4.72 to 4.87 Hong Kong dollars (US$0.61-US$0.63) a share, representing a discount of 2% to 5% to the stock's Monday's closing price of HK$4.97, according to a term sheet seen by The Wall Street Journal Monday. China Cinda, which went public in Hong Kong in late 2013, has seen its shares rise 29% this month.

Heavy buying by mainland Chinese investors has buoyed Hong Kong's stock market. The benchmark Hang Seng Index rose for an eighth day in a row on Monday and settled above 28000 for the first time since December of 2007. Hong Kong's Hang Seng Index closed up 2.7% at 28,016 on Monday.

Also taking advantage of the market's rally was Great Eastern Holdings Ltd., the insurance unit of Singapore's Oversea-Chinese Banking Corp Ltd. (O39.SG), which is raising up to US$568 million from the sale of 85 million shares in mainland insurer New China Life Insurance Co. (1336.HK) at HK$50.50 to HK$51.80 a share. The range represents a discount of 1.5% to 4% to the stock's Monday closing price of HK$52.60.

GIC is also raising about US$65 million by selling shares in Far East Horizon Ltd. (3360.HK), a financial leasing unit owned by Sinochem Group. Techlink Investment Pte. Ltd., a unit of the Singapore's sovereign wealth fund, is selling 60.47 million shares in an indicative range of HK$8.30 to HK$8.50 a share, representing a discount of 1.2% to 3.5% to Far East's Monday closing price of HK$8.60.

All three block trades--which will raise nearly US$1 billion--will close overnight.

Write to Prudence Ho at [e-mail]