11 October 2007 10:04 [Source: ICIS news]
SINGAPORE (ICIS news)--US billionaire Warren Buffett’s latest sale of PetroChina’s shares is not expected to affect demand of the Chinese oil major’s stock as it prepares for its debut listing on the Shanghai exchange, analysts said on Thursday.
“It was a good time for [Warren Buffet] to sell because of the volumes and price levels that PetroChina stock has made,” said Hong Kong-based JP Morgan analyst Samuel Lee over the phone.
PetroChina is expected to list on the ?xml:namespace>
There would be buyers clamouring to buy the stock if Buffett decided to sell, PetroChina chairman Jiang Jiemin had reportedly said in August.
“Other Chinese stocks are trading 20%-30% multiple while Petrochina is trading at a 17% price earning ratio. It offers stability for people who don’t want speculative shares,” CLSA’s head of oil and gas research Gordon Kwan said.
“It’s a decision I believe [Buffett] regrets because PetroChina shares have risen by 20% since he sold the shares.”
According to a New York Stock Exchange (NYSE) filing on Wednesday, the billionaire’s investment vehicle Berkshire Hathaway has cut its stake in PetroChina to 3.1%, the seventh reported reduction in the past three months.
It had sold 220.5m PetroChina H shares at an average price of HK$12.80 ($1.65)
PetroChina’s stock’s daily trading volume has reached about 400m since 25 September, 64% more than the three-month average, JP Morgan analyst Brynjar E Bustnes wrote in a note on Tuesday.
“Clearly in the current market, nobody seems to care,” said Bustnes on the implications of Buffett’s exit.
“What has often been cited as the best reason to own the stock has now been replaced by 1.4bn Chinese eager to own the stock.”
PetroChina’s shares jumped 5.9% to HK$15.44 at 08:30 GMT on Thursday on the Hong Kong Exchange.
Buffett possibly sold the shares due to rising pressure from human rights groups, said CLSA’s Kwan.
PetroChina’s parent, China National Petroleum Corp (CNPC), signed a 20-year oil deal with
PetroChina’s Hong Kong-based spokesman Mao Zefeng couldn’t be reached for comment.
($1 = HK$7.76)
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