Sovereign wealth fund Korea Investment Corp. said Thursday it won’t buy additional Bank of America shares, postponing its earlier plans to increase its stake of 69 million shares in the bank.
“We decided to call off purchasing additional shares with the dividend from our existing stake. It has been put off indefinitely,” KIC CEO Choi Chong-suk told The Korea Herald.
The head of the state-run fund manager under the Finance Ministry on Sept. 22 had said that KIC was still considering further investment as the bank’s exposure to toxic assets of European industry remains limited.
KIC bought shares of then Merrill Lynch back in 2008 priced at $27 a share, which was later acquired by Bank of America. Its price fell below $6 after credit rating agency Moody’s downgraded BOA by two notches to Baa1 on Sept. 21.
KIC in August said it had reinvested $78 million in buying the bank’s shares this year.
“Purchasing of additional BOA shares is postponed indefinitely, there was a consensus among policymakers running the sovereign fund Wednesday that it would be too risky to expand investments given so much turbulence in the sector,” a Finance Ministry official said.
By Cynthia J. Kim (
cynthiak@heraldcorp.com)
