Buffett Watch

Berkshire Hathaway's Controversial PetroChina Stake Falls Below 8%

Warren Buffett's Berkshire Hathaway holding company has cuts its controversial stake in PetroChina to just under 8%.

A filing with the Hong Kong Stock Exchange reveals that Berkshire now owns 1,687,730,000 shares in the Chinese-government controlled oil company.  That's down almost 200 million shares from Berkshire's previous filing earlier this month.  (Under Hong Kong Stock Exchange rules, Berkshire is only required to disclose a sale if it brings the company's stake across a whole number percentage level.  In this case, a sale of 45 million shares took the stake across the 8% level, triggering the filing.  Sales of the other 155 million shares disposed of since the previous filing did not have to be disclosed.)

Since mid-July, Berkshire has reduced its PetroChina holdings by 642 million shares, bringing its stake down from 11% to just under 8%.  It remains the company's second-biggest shareholder, following PetroChina's state-owned parent company, China National Petroleum.

Buffett's true motives for selling remain a matter for speculation.  The Associated Press quotes China Construction Bank International Securities analyst Duncan Chan as saying, "I expect Buffett will continue to sell down its stake in PetroChina to take profits, given crude oil price is this high."  PetroChina shares have exploded higher in the years since Buffett first started building his stake.

But, as we reported about a week ago in the WBW post Buffett's Been Selling More PetroChina Than You Might Have Thought, a group called Investors Against Genocide has been calling the "steady series of sales" an "increasingly clear demonstration of divestment by Berkshire Hathaway."  That group, and other human-rights activists, have been calling on big investors to sell their PetroChina shares as a protest against China's business ties with Sudan, which they say helps fund the genocide in Darfur.

If you would like to join the speculation, drop me an email.  I'll post excerpts.

Questions?  Comments?  Email me at buffettwatch@cnbc.com

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