Hong Kong SAFE cracker hit Australian banks

Guambat posted news back before Christmas that China's foreign exchange regulator, "State Administration of Foreign Exchange ("SAFE") "has taken small stakes in Australian banks", according to a Dow Jones Newswires report by Lyndal McFarland." See, China takes a stake in Australian banks.

Then Guambat had to UPDATE that post, adding information to the end of it that "Wei Benhua, vice head of SAFE, said, "The rumor is inaccurate. We have investigated it," when asked by a reporter to comment on the news during a forum held in Beijing."

Reminding us that China invented bureaucracy and bureaucrats and bureau-speak hundreds if not thousands of years before the USA was invented, it now appears that the rumor was indeed accurate in substance, if not precise form.

MarketWatch reports, a subsidiary of the body overseeing China's massive $1.4 trillion reserve stockpile, Hong Kong registered SAFE Investment Company, a wholly-owned unit of the body overseeing China's foreign reserves, has purchased stakes in three leading Australian banks.

The investments were made during the last two months, and care was taken not to move the share prices or trigger mandatory disclosure requirements

Market observers said it was unusual for SAFE to invest in such deals given that China Investment Corp., a sovereign wealth fund established with money drawn from China's foreign exchange reserves, was expressly created for that purpose. The FT report suggested SAFE may be purchasing stakes in the Australian banks on behalf of CIC or as a part of a plan that would eventually see a merger between the two government-controlled bodies.

Gwen Robinson, in FT Alphaville, writes similarly.

Not unfairly, perhaps, the word "inscrutable" comes to Guambat's mind.