Temasek cuts stakes in China banks, raises $2.48b

SINGAPORE: Singapore's state-linked investment firm Temasek Holdings said Thursday it had cut its stakes in two of China's largest banks by selling shares worth US$2.48 billion (RM7.5 billion).

The limited retreat from China Construction Bank (CCB) and Bank of China (BOC) is a "re-balancing" of its China portfolio after it upped its stake in mainland lending giant ICBC Bank in mid-April, a Temasek spokesman told AFP.

The firm on April 16 said it had reached an agreement to increase its stake in ICBC to 1.3% by purchasing shares from US financial group Goldman Sachs for US$2.3 billion.

"The re-balancing move is also partly to prepare for other opportunities that may arise in China and elsewhere," the spokesman said.

After the sale in CCB and BOC and the increased stakes in ICBC, Temasek will have "about US$18 billion still invested in leading China banks," he added.

"We continue to see the leading Chinese banks as long-term proxies to the growing Chinese economy as well as the country's rising middle income groups," he said.

The sale of its Hongkong-listed shares was made via placements, and Dow Jones Newswires cited people familiar with the deal as saying that the shares were priced at the low end of indicative ranges due to choppy market conditions.

It said Temasek sold 3.079 billion shares in BOC and 1.6 billion shares in CCB.

By the break in Hong Kong CCB shares were down 2.9 percent and BOC was down 3.4%.

Chinese businesses have featured prominently on Temasek's logbook in recent months, with the firm setting up a new investment arm specifically targeting privately-owned Chinese firms in January.

Temasek Holdings is one of two Singapore state investment firms and had a portfolio worth SG$193 billion for the financial year ended March 31, 2011.