#Coronavirus Impact: China’s Central Bank Now Controls 1.01% In HDFC Bank; Acquires 1.75 Cr Shares

#Coronavirus Impact: China's Central Bank Now Controls 1.01% In HDFC Bank; Acquires 1.75 Cr Shares
Coronavirus Impact: China’s Central Bank Now Controls 1.01% In HDFC Bank; Acquires 1.75 Cr Shares

Ever since the coronavirus outbreak spread from China to other nations, wealthy Chinese investors with deep pockets have been ramping up their investments and acquisitions of Asian companies.

In this same endeavor, Chinese Govt owned People’s Bank of China has now acquired 1% stake in HDFC Bank.

What does this mean?

People’s Bank of China Acquires 1% Stake In HDFC Bank

People’s Bank of China, which is the central bank of China, has acquired 1.7 crore shares of HDFC Bank, which makes them owner of 1.01% in HDFC Bank.

As per Keki Mistry, Vice Chairman and CEO, HDFC Ltd, People’s Bank of China already owned 0.80% stake in HDFC Bank till March 2019, which has now increased to 1.01%.

People’s Bank of China started aggressively acquiring shares of HDFC Bank between January and March, and bought 1,74,92,909 crore shares.

Why Does This Matter?

The timing is crucial here.

HDFC Bank’s share prices are on a downward spiral, and since the 1st week of February, their share prices dropped by 41%

And the aggresive process of buying shares by People’s Bank of China happened during this phase itself.

Right now, shares of HDFC Bank are being traded at Rs 912, which is 12% less than last week.

It seems People’s Bank of China betted heavily against the downfall of HDFC Bank shares due to the coronavirus impact, and use this opportunity to sink in their fangs, and acquire more stake, cheaply.

Brilliant business move.

Who Are People’s Bank of China?

People’s Bank of China is China’s central bank, like RBI of India, and holds $3.2 trillion in assets, which makes them as the richest central bank in the world.

They directly come under State Council of the People’s Republic of China, and are responsible for ‘carrying out monetary policy and regulation of financial institutions in mainland China, as determined by People’s Bank Law and Commercial Bank Law’ (as per Wiki)

As per various reports, Chinese investors have been buying up huge stakes in Asian & Western markets during the ongoing coronavirus outbreak, even as their own stock market is performing really well.

We will keep you updated, as more details come in, 

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