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SBK and China

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Not applicable
Can some clever forumite tell me if my thinking re SBK seems correct. If the deal with Bank of China goes ahead, the Chinese acquire a 20% stake in SBK at a price way above the going rate. Surely then, the Chinese are going to do everything in their power to pull the share price up to what they consider fair value. Good news for share holders. However, the deal is still subject to the bank of China meeting certain conditions. If I was one of the Chinese masterminds behind the deal and I saw how far the share price has dropped below what I'm about to pay, I would probably find some way of throwing the deal by not meeting those conditions. If this happens, SBK will tank significantly after 14 Feb. Is this thinking correct or am I once again showing my ignorance.
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23 REPLIES 23
Super Contributor
Uh oh! Been there, done that (many times). Thinking of scenarios also know as straw clutching. You could be right. Or not. In other words, take your position, stick to you stops, and don't fill your pretty little head with thoughts.
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Thing is, I'm trying to work out all the possibilities before taking a position. I'm long SBK already, but considering exposing myself more (and buying more SBK while I'm about it). Just worried that there are still too many possible scenarios.
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Super Contributor
I can see a few chinks in your argument,Wardog,but you might be right.
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Super Contributor
I just think there are way too many possible scenarios and we'll never have a clue what's going on behind the scenes. The only reliable info we have is the price the market is currently setting for the share.
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Valued Contributor
wardog, why would they want to 'pull' the share price up? They were happy to pay some 30% above the ruling whent he deal was announced, and pulling up any price would just cost more. Further, to the chinese this really is petty cash.
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Simon, surely if/when the deal goes through, the Chinese would like to see the price increase - considering that they're paying a lot more than they would on the open market. Or is the deal more long-term strategic than financial for them?
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Valued Contributor
it is pure strategic.
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Highlighted
hobo
Contributor
When is the dead-line for BOC meeting all the criteria?
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Not applicable
Strategic Partnerships with China aren't helping Standard Bank's Share Price. Admittingly the whole Banking Sector is down, but then perhaps the rest of The Banks are following SBK down, like a trend. This whole Chinese thing gets me worried as if this is the result i.e. like the SBK Share Price that was 11700 not so long ago, then what about this Memorandum of Understanding between AGL and The Chinese? A small rally and then the share sinks slowly?
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Super Contributor
Chinese are sitting on a large pile of cash. They desperately need resources and investment opportunities in Africa which Standard Bank can produce. If they pay too much for the share they will problably see it as key money. I've travelled through China 8 times now. One cannot apreciate the scale of the development and local demand until one have experienced it first hand. The fact that they choose Standard Bank is actually quite an good indicator as I think they problably have done it after carefull consideration. They are not an impulsive people. They have thought this out very well. My humble opinion is that the share price will drift higher up to March up to at least R105 level.
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See share price. Methinks something's brewing. Or it could just be that curry from last night.
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Wardog...I think something is brewing!!! And no, not the curry!!!
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Cois, Wardog, what do you mean something is brewing??? SOmething good or bad? I am so afraid of this share it's not even funny. I feel it must recover, but I have been watching it all week and it's up down up down. What do you say, do you see it recovering from here on? Or more up down up down down? :)
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Dec 2007 results will be out on 5 March - value will be reflected then (as I said before - a bargain at R86)
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MM109, wees rustig!!! Hou maar net dop!!!
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NET DOP???? EK het geld nodig om te dop! ;) Lekker bly
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ANyway, I agree. A bargin at this price but what worries me is that it went so low to start off with. That was like watching a train wreck. Luckly I was not on board when it wrecked. Hopefully the've put it back together.... :)
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There are some commentators (eg an investment bigwig by the name of Barton Biggs - see Bloomberg.com) who reckon a rally is on its way and it's going to be led by banks. For those if us clinging desperately to SBK, I hope he's right 'cause if you combine any positive effects of the Chinese deal, with a general rally by banks, we could be smiling soon.
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Super Contributor
I have been buying this one on the way down. Here is hoping for a rally!
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