In a significant financial maneuver, the Kuwait Investment Authority (KIA), one of the world’s oldest and largest sovereign wealth funds, has sold a whopping $3.1 billion stake in Bank of America Corporation (NYSE: BAC) through an overnight block trade.
The transaction, executed at $47.95 per share, marks the second major divestment by KIA in the financial sector within a week, signaling a strategic shift in its investment portfolio.
The sale, facilitated by Goldman Sachs, was priced at a 1.5% discount to Bank of America’s closing price of $48.66 on the previous trading day, July 7, 2025.
The deal involved approximately 64.7 million shares, based on the reported price, and contributed to a notable decline in Bank of America’s stock, which fell to as low as $46.76 during trading on July 8 — currently trading at $47.
This divestment follows closely on the heels of KIA’s sale of a $3.4 billion stake in Hong Kong-based insurer AIA Group, where it offloaded a 3.7% stake at HK$68 per share, totaling 394.4 million shares.
Together, these transactions amount to $6.5 billion in financial stock sales within a week, underscoring KIA’s accelerated repositioning of its $1 trillion portfolio.
A Strategic Exit Amid Market Shifts
KIA’s decision to reduce its Bank of America holdings comes in the context of broader market dynamics and mirrors a similar move by another high-profile investor, Warren Buffett’s Berkshire Hathaway.
Berkshire, once Bank of America’s largest shareholder, has been steadily trimming its stake since July 2024, reducing its holdings from 1.03 billion shares to approximately 632 million by March 2025—a massive 39% reduction.
The parallel exits by KIA and Berkshire, both long-standing backers since the 2008 financial crisis, suggest a recalibration of confidence in the banking giant amid evolving economic conditions.
Bank of America, with a current market valuation of $355 billion, has seen its share price rise 6.4% year-to-date and 13.8% over the past 12 months, with a remarkable 96.2% gain over five years.
Despite this strong performance, the recent sell-offs by major investors have sparked market speculation about the bank’s near-term outlook, particularly as investors navigate uncertainties around interest rates, regulatory pressures, and global economic trends.
The KIA sale, executed at the lower end of the offering range, exerted immediate downward pressure on Bank of America’s stock price, with a reported 2.8% drop in midday trading on July 8.
Analysts suggest that the discounted block trade reflects a pragmatic approach to liquidity, allowing KIA to capitalize on the bank’s performance while reallocating capital to other opportunities.
Market observers note that KIA’s divestments may be part of a broader strategy to diversify its portfolio away from financial services, possibly in response to geopolitical risks or a shift toward emerging sectors like technology or renewable energy.
Retail investors on social media speculate the coming of a collapse.
For Bank of America, the loss of two crisis-era backers—Berkshire Hathaway and now KIA—raises questions about investor confidence.
It is fair to mention that the stock’s resilience, trading at $47 after the initial dip, suggests that the market views the sell-off as a strategic move by KIA rather than a fundamental concern about the bank’s health.
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Why Are Institutions Selling BAC Stock?
KIA’s recent activity is not an isolated event.
The sovereign wealth fund’s sale of AIA Group shares last week, which represented Hong Kong’s fourth-largest share sale in 2025, indicates a deliberate effort to liquidate significant holdings in financial firms.
The AIA transaction, priced at a 6% discount to the stock’s previous close, led to a 4.4% drop in AIA’s share price, highlighting the market impact of KIA’s moves.
Globally, sovereign wealth funds are increasingly active in reallocating capital to align with long-term economic trends, according to Caproasia.
KIA’s $1 trillion portfolio, built on Kuwait’s oil wealth, positions it as a key player in global markets, and its recent divestments may signal a pivot toward sectors with higher growth potential or greater resilience to macroeconomic shifts.
As KIA continues to reshape its investment strategy, market participants will be watching closely for its next moves.
The fund’s substantial resources and long-term investment horizon afford it significant flexibility, but its recent sales suggest a cautious approach to financial stocks, possibly in anticipation of regulatory or economic headwinds.
For Bank of America, the departure of KIA as a major shareholder is unlikely to alter its operational trajectory in the short term.
The bank remains a global leader in corporate and investment banking, with a strong balance sheet and diversified revenue streams.
However, the psychological impact of losing two high-profile investors may prompt closer scrutiny from analysts and investors alike.
KIA’s exit could prompt others to reassess their positions, particularly if additional block trades emerge in the coming months.
This bearish sentiment in BAC stock may trigger further downward pressure.
As KIA redirects its capital, the financial world will be watching to see where the trillion-dollar fund places its next bet.
But I’m curious to know what you think — leave your thoughts below.
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