Buffett link boosts PetroChina
Friday, April 25, 2003
biz.scmp.com
ERIC NG
Trading in PetroChina shares hit a three-month high yesterday after billionaire investor Warren Buffett's Berkshire Hathaway and fund house Templeton Global Advisors revealed substantial holdings.
More than 358 million H shares of the country's largest oil firm changed hands yesterday, the highest trading volume since 361 million shares were traded on January 10.
Trading volume has been increasing steadily in the past week.
According to Hong Kong Exchanges and Clearing data, New York-listed Berkshire Hathaway bought 80.49 million PetroChina shares at HK$1.66 each on April 9, raising its holding of the company's free-floating shares from 6.71 per cent to 7.17 per cent.
The stock closed 0.99 per cent firmer at HK$1.62 yesterday as it went ex-dividend, amid the heavy selling of mainland-related shares.
A new stock interest disclosure rule, which came into effect on April 1, stipulates that investors holding more than 5 per cent of a listed company's shares must file their holding and additions or reductions to that holding within three business days of the relevant transaction. They are deemed "substantial investors".
The previous disclosure threshold was 10 per cent.
Only 10 per cent of PetroChina's shares are tradeable, as the remainder are state shares held by parent China National Petroleum Corp.
This means Berkshire Hathaway's stake in the oil giant was raised to 0.71 per cent on April 9.
Templeton disclosed on April 1 that it held 5.7 per cent of PetroChina's H shares, or 0.57 per cent stake of the whole company. It is not known when it accumulated the shares.
HSBC Securities analyst Gordon Kwan said he believed Mr Buffett's company had a long-term interest in its PetroChina shares, which could be held for years.
"PetroChina's price-to-earnings ratio is relatively low compared with international peers, and has a high dividend yield," he said. "China's status as the world's fastest growing energy market is also an attraction."
BP is PetroChina's second largest shareholder. It bought 20 per cent of the latter's initial public share offer in 2000 for a 2 per cent stake in PetroChina. HSBC has a stake of just over 0.5 per cent, according to Mr Kwan.
Berkshire Hathaway is a holding company for interests from property to casualty insurance. Insurance premiums are its largest revenue contributor.
It made US$4.28 billion of net profit on US$42.35 billion of turnover last year. At last year's end, it held US$28.36 billion worth of stocks, the total acquisition cost of which was US$9.16 billion. Its largest holdings include American Express, Coca-Cola and Gillette.
Meanwhile, PetroChina said it had raised its stake from 30 per cent to 45 per cent in the oil and gas fields of the Jabung block, in Indonesia, for US$82 million.
PetroChina bought its additional stake from international oil firm Amerada Hess.
At last year's end, Jabung had proven oil and gas reserves of 267 million barrels of oil equivalent (boe), of which about 40 per cent is natural gas.
Jabung produced 23,200 boe per day, with a total production of 8.47 million boe last year - of which 90 per cent is oil and 10 per cent liquefied petroleum gas.
The acquisition is a tiny one for PetroChina, which produced 872.4 million boe of oil and gas last year and 221.8 million boe in this year's first quarter alone.
As gas supply to Singapore was expected to start in October, Jabung's production was targeted to rise to more than 70 million boe in 2005, PetroChina said. |
