Buffett Continues to Shed Stake in PetroChina

U.S. investor Warren Buffett's Berkshire Hathaway sold more of its stake in top Chinese oil producer PetroChina in late August, selling about US$136 million worth of shares, as it took profits on what has been a lucrative holding.

Berkshire

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[BRK  Loading...      ()   ] sold 92.66 million shares at an average price of HK$11.473 on August 29, according to a regulatory filing in Hong Kong.

"He's selling into strength," said Dale Tsang, managing director at Imperial Dragon Asset Management. "He's taking his chips off the table slowly. PetroChina isn't a growth story anymore. A lot has been priced in already."

The sale follows Berkshire's disposal of 16.9 million PetroChina shares in late July, and cuts its holding of the state-controlled firm's freely tradeable shares to 9.72 percent, or 2.05 billion shares, from 10.16 percent.

Berkshire built up its stake in what has become the world's second most valuable oil company, behind ExxonMobil, in April 2003 at an average price of about HK$1.60 a share, meaning it made a return on the shares it sold of more than 600 percent.

Shares in PetroChina closed at HK$11.36 on Wednesday.

PetroChina's share price has risen about 35 percent over the past year on high oil prices and vigorous Chinese demand, although domestic rivals CNOOC and Sinopec have seen stock price rises of 56.5 and 76.5 percent over the same period.

Buffett earlier this year rejected a Berkshire shareholder's proposal to sell the PetroChina stake because of its parent's ties to Sudan. That decision also won support at a shareholder's meeting in May.

In another case of a big U.S. investor cashing out of a profitable Chinese investment, top aluminium maker Alcoa Inc was on Wednesday selling its entire stake in Aluminum Corp of China (Chalco) for up to US$2 billion -- a deal that could reap Alcoa a profit of US$1.9 billion.