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Singapore’s Temasek Sells Stake in Bank of America (Update2)
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By Chen Shiyin
May 15 (Bloomberg) -- Temasek Holdings Pte sold its 3.8 percent stake in Bank of America Corp., reducing investments in U.S. and European financial companies that dragged down the value of the Singapore state-owned investment firm last year.
The sale of the shares, worth $2.14 billion at yesterday’s closing price, was completed by March 31, according to a U.S. securities filing. At the average price of $6.73 for the first quarter, the sale would have fetched $1.27 billion for Temasek, which had spent about $5.9 billion since 2007 buying shares in Merrill Lynch & Co., acquired by Bank of America this year.
Temasek earlier this week bought some of Bank of America’s stake in China Construction Bank Corp., and Chief Executive Officer Ho Ching yesterday said the fund would increase investments in emerging markets and reduce exposure to developed economies.
“The belief now is that the world is not so American- centric anymore,” said Melvyn Teo, associate professor of finance at the Singapore Management University. “It’s going to be driven more and more by the Chinese economy and consumer so might as well load up more on Chinese banks than American banks.”
The value of Temasek’s assets fell 31 percent to S$127 billion ($87 billion) in the eight months to Nov. 30 as the credit crisis drove down the value of stakes in Merrill Lynch, Barclays Plc and Standard Chartered Plc. The drop in the portfolio tracked a 38 percent retreat in the MSCI World Index.
The global stock benchmark has risen 0.5 percent this year, compared with a 45 percent gain in China’s benchmark Shanghai Composite Index.
Bank of America Stake
A Form 13F filing to the U.S. Securities and Exchange Commission yesterday from Temasek indicates that the fund no longer held shares in Bank of America or Merrill Lynch as of March 31. An earlier filing showed that the Singapore investment firm owned about 219.7 million shares in Merrill Lynch at the end of 2008.
Temasek confirmed it sold its Bank of America shares in an e-mailed response to Bloomberg News queries today. The company declined to say how much it sold the stake for or when the sale was conducted. Mark Tsang, a Hong Kong spokesman at Bank of America, declined to comment.
Since the end of March, when Temasek completed the sale, Bank of America has rallied 66 percent. The shares dropped 52 percent in the first quarter.
Merrill Lynch investors received 0.8595 Bank of America stock for each share held in the U.S. brokerage in the acquisition. The deal meant Temasek received about 188.8 million Bank of America shares, the equivalent of a 3.8 percent stake in the company, according to calculations by Bloomberg.
Standard Chartered, Barclays
The shares of Charlotte, North Carolina-based Bank of America, under pressure from U.S. regulators to raise $33.9 billion to boost its capital base, have tumbled 69 percent in the past year, outpacing the 37 percent decline in the Standard & Poor’s 500 Index.
The stock rose 2.7 percent to $11.31 in New York yesterday. It traded between $14.81 and $2.53 apiece in the first quarter.
Sovereign funds, mostly from Asia, have made “substantial losses” on more than $60 billion invested in U.S., Swiss and U.K. banks since the start of the subprime crisis, according to International Financial Services London, an industry lobby group.
Along with its stake in Merrill Lynch, Temasek also raised holdings in Standard Chartered, the London-based bank that gets almost all its profit from emerging markets, and bought shares in Barclays, the U.K.’s third-biggest bank. The company had earlier said it wants the Organization for Economic Cooperation and Development countries to account for about a third of its investment portfolio.
Reassessing the Portfolio
Temasek will cut its holdings in the so-called OECD countries to 20 percent as it expands in Asia and emerging markets from Latin America to Africa, Ho said in a speech posted on the company’s Web site yesterday.
“We have also been re-assessing our long term portfolio balance over the last two years,” Ho, 56, said in the May 12 speech. “As Asia continues to develop, it continues to de-risk. We are increasingly more confident of Asia’s future.”
Ho, the wife of Singapore Prime Minister Lee Hsien Loong, in October will step down as chief executive of the investment firm set up in 1974 with state assets such as shipyards and an airline, and which counts the city’s Ministry of Finance as its only shareholder. She will be replaced by Charles Goodyear, the 51-year-old former head of BHP Billiton Ltd.
China Construction
Temasek was among a group of investors including Hopu Investment Management Co., a private-equity fund run by Goldman Sachs Group Inc.’s China partner Fang Fenglei, that bought a HK$3.6 billion ($465 million) stake in Beijing-based Construction Bank, according to a document sent to fund managers and obtained by Bloomberg News this week.
“We’ve been very heavily overweight in Asia for some years now and leery of the Western financial institutions because Asia is where the growth is at,” said Hugh Young, managing director at Aberdeen Asset Management Plc, which has about $30 billion of Asian assets.
To contact the reporter on this story: Chen Shiyin in Singapore at [email protected]
Last Updated: May 15, 2009 01:12 EDT
Singapore’s Temasek Sells Stake in Bank of America (Update2)
Share | Email | Print | A A A
By Chen Shiyin
May 15 (Bloomberg) -- Temasek Holdings Pte sold its 3.8 percent stake in Bank of America Corp., reducing investments in U.S. and European financial companies that dragged down the value of the Singapore state-owned investment firm last year.
The sale of the shares, worth $2.14 billion at yesterday’s closing price, was completed by March 31, according to a U.S. securities filing. At the average price of $6.73 for the first quarter, the sale would have fetched $1.27 billion for Temasek, which had spent about $5.9 billion since 2007 buying shares in Merrill Lynch & Co., acquired by Bank of America this year.
Temasek earlier this week bought some of Bank of America’s stake in China Construction Bank Corp., and Chief Executive Officer Ho Ching yesterday said the fund would increase investments in emerging markets and reduce exposure to developed economies.
“The belief now is that the world is not so American- centric anymore,” said Melvyn Teo, associate professor of finance at the Singapore Management University. “It’s going to be driven more and more by the Chinese economy and consumer so might as well load up more on Chinese banks than American banks.”
The value of Temasek’s assets fell 31 percent to S$127 billion ($87 billion) in the eight months to Nov. 30 as the credit crisis drove down the value of stakes in Merrill Lynch, Barclays Plc and Standard Chartered Plc. The drop in the portfolio tracked a 38 percent retreat in the MSCI World Index.
The global stock benchmark has risen 0.5 percent this year, compared with a 45 percent gain in China’s benchmark Shanghai Composite Index.
Bank of America Stake
A Form 13F filing to the U.S. Securities and Exchange Commission yesterday from Temasek indicates that the fund no longer held shares in Bank of America or Merrill Lynch as of March 31. An earlier filing showed that the Singapore investment firm owned about 219.7 million shares in Merrill Lynch at the end of 2008.
Temasek confirmed it sold its Bank of America shares in an e-mailed response to Bloomberg News queries today. The company declined to say how much it sold the stake for or when the sale was conducted. Mark Tsang, a Hong Kong spokesman at Bank of America, declined to comment.
Since the end of March, when Temasek completed the sale, Bank of America has rallied 66 percent. The shares dropped 52 percent in the first quarter.
Merrill Lynch investors received 0.8595 Bank of America stock for each share held in the U.S. brokerage in the acquisition. The deal meant Temasek received about 188.8 million Bank of America shares, the equivalent of a 3.8 percent stake in the company, according to calculations by Bloomberg.
Standard Chartered, Barclays
The shares of Charlotte, North Carolina-based Bank of America, under pressure from U.S. regulators to raise $33.9 billion to boost its capital base, have tumbled 69 percent in the past year, outpacing the 37 percent decline in the Standard & Poor’s 500 Index.
The stock rose 2.7 percent to $11.31 in New York yesterday. It traded between $14.81 and $2.53 apiece in the first quarter.
Sovereign funds, mostly from Asia, have made “substantial losses” on more than $60 billion invested in U.S., Swiss and U.K. banks since the start of the subprime crisis, according to International Financial Services London, an industry lobby group.
Along with its stake in Merrill Lynch, Temasek also raised holdings in Standard Chartered, the London-based bank that gets almost all its profit from emerging markets, and bought shares in Barclays, the U.K.’s third-biggest bank. The company had earlier said it wants the Organization for Economic Cooperation and Development countries to account for about a third of its investment portfolio.
Reassessing the Portfolio
Temasek will cut its holdings in the so-called OECD countries to 20 percent as it expands in Asia and emerging markets from Latin America to Africa, Ho said in a speech posted on the company’s Web site yesterday.
“We have also been re-assessing our long term portfolio balance over the last two years,” Ho, 56, said in the May 12 speech. “As Asia continues to develop, it continues to de-risk. We are increasingly more confident of Asia’s future.”
Ho, the wife of Singapore Prime Minister Lee Hsien Loong, in October will step down as chief executive of the investment firm set up in 1974 with state assets such as shipyards and an airline, and which counts the city’s Ministry of Finance as its only shareholder. She will be replaced by Charles Goodyear, the 51-year-old former head of BHP Billiton Ltd.
China Construction
Temasek was among a group of investors including Hopu Investment Management Co., a private-equity fund run by Goldman Sachs Group Inc.’s China partner Fang Fenglei, that bought a HK$3.6 billion ($465 million) stake in Beijing-based Construction Bank, according to a document sent to fund managers and obtained by Bloomberg News this week.
“We’ve been very heavily overweight in Asia for some years now and leery of the Western financial institutions because Asia is where the growth is at,” said Hugh Young, managing director at Aberdeen Asset Management Plc, which has about $30 billion of Asian assets.
To contact the reporter on this story: Chen Shiyin in Singapore at [email protected]
Last Updated: May 15, 2009 01:12 EDT
