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2009-4-2 12:14:00 p.m. HKT, XFNA
DJ MARKET TALK:Chances Of ICBC (Asia) Privatization Increased-JPM
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| 1155 [Dow Jones] STOCK CALL: JPMorgan upgrades ICBC (Asia) (0349.HK) to Overweight from Neutral. Views BOC (3988.HK) announcement it will increase stake in BOC HK (2388.HK) via secondary market as increasing possibility ICBC (Asia) to be taken private by ICBC (1398.HK), which owns 72.0% of ICBC (Asia), only three percentage-points below free-float requirement. Notes ICBC (Asia) trading at discount to book value of HK$11.30. Says has weak capital position with tier-1 ratio at only 7.3%, among lowest vs peers, limiting bank's ability to fulfill growth strategy. Says taking ICBC (Asia) private to also make it more convenient for ICBC to downstream capital into the HK bank, potentially acquire other local HK banks. Says privatization hopes to provide downside support to share price, but advises not chasing beyond HK$11.00, marking FY09 book value. Keeps DDM-derived target at HK$9.00 as fundamental assumptions unchanged. Shares up 5.7% at HK$9.59. (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
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(Delayed by 1 hour)
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