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BIZCHINA / Center

Chinese stake in UK's BG Group?

(Bloomberg)
Updated: 2007-08-02 09:13

A Chinese State investment fund may increase its shareholding in BG Group
Plc after acquiring 0.46 percent of the UK's third-largest gas producer,
Cazenove Group said.

An investment fund with China's central bank purchased 15.5 million
shares of Reading, UK-based BG Group between June 15 and July 13,
Cazenove analyst Fred Lucas said in a note yesterday.

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The Chinese government recently set up a State investment fund to switch
US dollar reserves into high-yielding equity investments, the report said.

"Given the scale of US dollar reserves that it is understood to be trying
to redeploy for higher returns, there ought to be potential for it to buy
a much larger stake," the Cazenove note said.

BG spokeswoman Trina Fahey confirmed the People's Bank of China is a
shareholder. She declined to say how many shares they held.

A spokesman for the People's Bank of China in Beijing said the bank
didn't have a direct holding in the company and the purchase may have
been made on behalf of a State investment fund.

Higher liquefied natural gas shipping volumes and prices helped BG's
second-quarter net income rise 13 percent from a year earlier, BG said
last week.

(For more biz stories, please visit Industry Updates)

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