LONDON (Reuters) - Bank of China (BOC) (3988.HK: Quote, Profile, Research), the world's sixth-biggest bank by market capitalization, is not in talks with UK-based lender Standard Chartered Plc (STAN.L: Quote, Profile, Research), banking sources said on Friday.
Shares in Standard Chartered (STAN.L: Quote, Profile, Research), which derives over 90 percent of its profits from Asia, Africa and the Middle East, hit a record high on Friday on market talk that the Chinese lender was making an offer for the UK bank.
"They are not in talks," said a banker close to BOC, China's second biggest lender.
Wang Zhaowen, BOC's general manager and spokesman, also said he had not heard of any potential investment in Standard Chartered.
"I have not heard anything about that," Wang told Reuters.
Standard Chartered shares ended 4.5 percent higher on Friday at 1,799.11 each.
That values Standard Chartered at 2.43 times 2008 book value, similar to BOC's forward price-to-book valuation of 2.48 times, according to Reuters Estimates.
Analysts said Singapore state investment arm Temasek Holdings (TEM.UL: Quote, Profile, Research), Standard Chartered's single biggest shareholder, could have been buying shares in the London-based bank.
"Temasek has been buying StanChart shares in the past few months. They are sitting in a perfect position, and consider Standard Chartered a good investment," a source familiar with the situation said.
According to Reuters data, Temasek holds 17.22 percent stake in Standard Chartered as of September 13. Temasek spokeswoman Myrna Thomas confirmed on Sep. 4 that the company increased its holding in Standard Chartered to 16 percent from 15 percent on August 29.
Chinese financial firms have been increasingly active in making overseas deals.
Industrial and Commercial Bank of China (ICBC) (1398.HK: Quote, Profile, Research)(601398.SS: Quote, Profile, Research), the world's top bank by market capitalization, on Thursday, agreed to pay $5.56 billion for a 20 percent stake in South Africa's Standard Bank (SBKJ.J: Quote, Profile, Research), the biggest overseas acquisition by a Chinese bank.
On Monday, CITIC Securities Co.(600030.SS: Quote, Profile, Research), China's top broker, also agreed to swap stakes with Wall Street firm Bear Stearns (BSC.N: Quote, Profile, Research), with the Beijing-based firm paying $1 billion for bonds that will convert to about 6 percent of Bear Stearns shares.
Including China Development Bank's $3.14 billion investment in Barclays Bank (BARC.L: Quote, Profile, Research) and China's state investment agency's $3 billion buy in Blackstone Group (BX.N: Quote, Profile, Research), China has made about $12 billion worth of investments in overseas financial assets this year.
