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Goldman Sachs is selling down its stake in Chinese banking giant Industrial & Commercial Bank of China — a five-year-old investment that already has reaped a windfall for the Wall Street firm.blogs.wsj.com
So far, Goldman has doubled its money from selling shares of ICBC, with more shares left on Goldman’s books. Still, the investment has had some unwelcome ripple effects for Goldman and in China.
This year, the ICBC investment has been a major drag on Goldman’s financial results. And investments by Goldman and other foreign companies in Chinese financial institutions have become controversial because of the profits the foreign investors have racked up.
As Goldman, Bank of America and other foreign companies pare stakes in China’s banking sector, it also has fanned worries about the health of the Chinese banking sector. Hong Kong-listed shares of ICBC slipped 8.5% Thursday amid news of Goldman’s planned share sale.
Here is a look back at Goldman’s history with ICBC:
* April 2006: Goldman buys a 4.9% stake in ICBC for $2.58 billion. The share sale was made ahead of ICBC’s $21.9 billion IPO in October of that year. For Goldman, the investment was among the Wall Street firm’s biggest-ever investments made with its own capital.
source:blogs.wsj.com
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