Bank of China weighs up European interest in shares

Officials from the Bank of China have met with investors from Europe, as part of a wider strategy to sell shares worth billions of dollars.

The move by Bank of China to solicit European investment is seen as another indicator that Chinese lenders are eager to boost cash levels, which is also being realised through the sale of equity and debt.

The move overseas is viewed as the most logical step forward, seeing as it is anticipated that there is going to be a decided lack of demand from Asian investors over the next few years.

Fund managers in London recently played host to experts from the Bank of China, which is one of the emerging economy’s four biggest banks.

The representatives from China were there to determine how interested their counterparts in Europe are in the offer, and, according to the Wall Street Journal, just as eager to listen to what investors have to say on the $6.5 billion of preferred shares it is seeking to sell offshore.

It is believed that leaders at the Bank of China are willing to sell securities in dollars and euros, a fact that will appeal to many investors in Europe and indeed beyond.

“The big four banks started selling debt in China in the past few weeks, while Bank of China is poised to be the first to tap overseas demand for preferred shares, on top of the $9.8 billion planned for the domestic market,” the online news provider outlined.

Experts believe that investors need to be incentivised to pump cash into these shares.

They will need to, for example, offer higher yields in compensation – in comparison to common stock – because “preferred shares lack the potential for big dividends”.

In related news, the Bank of China recently announced that it will extend its renminbi-clearing hours so that it can deliver coverage for trading across the world and bolster its services to international financial institutions.