* KIC denies report on plans to buy more shares
* KIC chief says BofA shares hit bottom -media
* KIC to invest in yuan-denominated assets in mid-term
(Recasts with KIC statement, adds comments on yuan asset)
SEOUL, Sept 23 South Korea's $46 billion
sovereign wealth fund said on Friday it had not decided whether
to use the rest of its dividends from Bank of America to
raise its stake in bank, contrary to media reports.
Yonhap News Agency earlier reported that Korea Investment
Corp would increase its stake of 69 million shares in BofA,
quoting the fund's chief executive.
"We are trying to purchase additional shares with the
dividend (we received from our existing stake)," Yonhap quoted
KIC CEO Choi Chong-suk as saying.
KIC said in a statement it had yet to make a decision on
reinvestment of its BofA dividend. A spokesman said the fund
would convene a meeting on Sept 28 on the matter but declined to
provide further details.
KIC paid $2 billion in 2008 to buy into what was then
Merrill Lynch, which was acquired by Bank of America later that
year as the global financial crisis raged. At current prices,
the 69 million shares are now worth less than a quarter of that.
The fund said last month it had already re-invested $78
million in buying BofA shares this year, about half the
dividends it had received since its initial investment.
Choi also told reporters in Washington that the largest U.S.
bank by assets did not have a fundamental credit problem,
according to South Korean media reports.
"(BofA) shares seem to have hit bottom. They will definitely
go up, although it may take some time," Choi said.
EYES YUAN ASSETS
KIC, which invests wholly outside the country, is trying to
diversify investments away from their heavy reliance on the
dollar and wished to increase its exposure to alternative
investments. It bought a$104 million stake in Singapore-listed
commodities firm Noble Group earlier this year.
KIC added in the statement that it would make investments in
yuan-denominated assets in the mid-term and long-term, following
media reports that it will increase its yuan investments to $200
The fund applied for a licence that will allow it to invest
in China's bond and stock markets last year and is waiting for
KIC was founded in 2005 from funds by the government and
(Reporting by Ju-min Park and Kim Yeonhee; Editing by Jonathan
Hopfner and Ken Wills)