Buffett Sells PetroChina Stake: Profit Taking or Yielding to Activists?

Warren Buffett has decided to sell off his most high-profile investment in China – PetroChina Co., of which Berkshire Hathaway, Inc. holds stake - raising the eyebrows of investors and social activists, Karen Richardson of the Wall Street Journal (subscription required) reported today.

According to the article, investors have said the sale of PetroChina is a sign that some Chinese stocks may be overvalued, now might be the right time to cash in by getting out. 

Social activists, however, have been pushing investors to sell their shares in the company, and see a small victory in Buffett’s move, as government-controlled PetroChina invests heavily in Sudan and buys a large portion of the country’s oil exports, and the money is being used by Khartoum to sponsor widespread genocide in Darfur.

“There are a lot of people paying attention to what he (Buffett) is doing and watching the trajectory of his move,” Andrew Foster, director of research at Matthews China Fund, told the  Journal.  “As investors, we’re all wrestling with the fact that it’s difficult to justify current valuations in China, even though there has been a lot of fundamental, macroeconomic progress there.”