Temasek pays 600 mln dlrs for stake in China’s CCB

May 21, 2009
Singapore Democrats

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AFP

Singapore’s state-linked investment firm Temasek Holdings has paid 600 million US dollars to raise its stake in China Construction Bank (CCB), a report said Thursday.

The move will take Temasek’s investment in the Chinese bank to 6.5 percent, or 14.3 billion shares, from 6.0 percent, the Straits Times said, quoting unnamed sources.

Temasek declined to confirm the report, saying it “is inappropriate for us to comment on unsourced reports.”

Bank of America said last week it had sold a third of its stake in CCB for 7.3 billion dollars to a consortium that includes Temasek Holdings, China’s Hopu Investment Management and China Life Insurance.

The US bank said it sold the shares to raise capital.

Temasek’s increased holding in the Chinese bank came as it tries to rebalance its worldwide portfolio after taking a hit from the global economic downturn.

The firm, along with the Government of Singapore Investment Corp, are the city-state’s two main state investment vehicles.

They sunk billions of dollars into Western banks shaken by the US-born financial crisis and have since seen the value of the investments fall as share prices tumbled.

Temasek chief executive Ho Ching said last week the company will focus more on Asia and trim its presence in Western economies.

Temasek will reduce its exposure to members of the Organisation for Economic Co-operation and Development (OECD) — which groups industrialised countries — from 30 percent of its portfolio to 20 percent, she said.

Its Asian regional portfolio will stay at 40 percent, while Singapore investments will remain at 30 percent, said Ho, the wife of the city-state’s Prime Minister Lee Hsien Loong.

Temasek will add new areas such as Latin America, Russia and Africa where its collective exposure will be 10 percent.

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