Buffett 'cautious' in Chinese markets

BILLIONAIRE Warren Buffett yesterday said investors should be "cautious" about China's stocks after the country's benchmark index more than doubled this year.

"We never buy stocks when we see prices soaring," Buffett said in Dalian, northeast China, where he's visiting a subsidiary of his Berkshire Hathaway Inc.

"We buy stocks because we're confident of the company's growth. People should be cautious when they see prices rising."

Buffett has sold shares of PetroChina Co, which has risen 76 percent this year to become the world's second-biggest company by market value. China's benchmark CSI 300 stock index has climbed 48 percent since May 17, when Li Ka-shing, Asia's richest man, said there "must be a bubble."

"Buffett is right about China stocks, whose valuations are too high," Wang Zheng, who manages the equivalent of US$500 million at the asset management unit of Everbright Securities Co in Shanghai, told Bloomberg News. "It doesn't make sense any more to still play in such a market. It's about time to pull out of it."

Buffett said he was "appreciative" of PetroChina's performance and that he is doubtful that he can find another stock like it.

Berkshire owned more than 10 percent of PetroChina's publicly held shares at the end of last year. The company has sold all of its holding, Buffett said earlier.

He also denied Chinese media reports yesterday that Berkshire had invested in China Life Insurance Co.