Vanguard Group Buys Stake in China Petroleum
Chemical
The US's second largest mutual fund company, Vanguard
Group, has bought a stake in China Petroleum Chemical,
valued by the market at US$327 million. This stake is
owned by Vanguard's Wellington Fund.
This buy comes four months after Warren Buffett's Berkshire
Hathaway purchased at least 1.3 percent of PetroChina,
Sinopec's main rival. When Buffett made the purchase of
PetroChina shares, it spurred speculation that other major
investors would start investing in Chinese oil companies.
Buffett told Berkshire Hathaway investors he was avoiding
American stocks because they were over-priced.
Vanguard's Wellington Fund now owns about 1.2 billion,
or about 7 percent, of Sinopec's Hong Kong-traded shares,
which is worth $327 million at current prices. The Vanguard
fund is now Sinopec's fourth largest non-state investor,
behind Exxon Mobil, Royal Dutch/Shell Group and BP.
China Petrochemical Group owns approximately 55 percent
of Sinopec; China Development Bank and China Xinda Asset
Management, a state-run fund management company, each
own about 10.1 percent of the company. None of these can
be traded without approval from the Chinese government.
China Orient Asset Management, another state-controlled
fund, owns 1.3 billion shares.
As China's economy increasingly urbanizes, more Chinese
are driving automobiles, which is in turn driving gasoline
sales.
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