May 21, 2009
Temasek 'ups CCB stake'
Shares 'bought from BoA' raise stake in China bank to 6.5%
By Alvin Foo
TEMASEK Holdings invested US$600 million (S$877 million) to raise its stake in China Construction Bank (CCB) during Bank of America's recent sale of CCB shares, sources have told The Straits Times.
Last week, it was reported that Bank of America (BoA) had sold 13.5 billion of its CCB shares at HK$4.20 each to a consortium including Temasek, a China Life Insurance unit and Chinese private equity fund Hopu Investment Management.
Asked about its CCB investment, a Temasek spokesman said it was 'inappropriate to comment on market speculation'.
The deal, which comes to about US$7.3 billion, is believed to be Asia's largest so far this year.
Observers said the deal is significant because it marks the first time a large Chinese state-owned enterprise has partnered a foreign entity in such a major transaction.
Based on yesterday's closing price of HK$4.93 for CCB shares, Temasek has already gained a paper profit of 73 HK cents per share, or a 17.4 per cent potential return on its new investment.
This notional profit comes just a few days after Temasek announced it had sold its 3 per cent stake in BoA.
Temasek's BoA sale came during the first three months of this year and resulted in an estimated loss of between US$2.3 billion and US$4.6 billion.
Analysts and fund managers have observed that Temasek's recent moves are in line with the tweaking of its long-term investment strategy.
This is designed to see it focusing more on Asia and emerging markets, while reducing emphasis on developed countries such as the United States and Europe.
Temasek 'ups CCB stake'
Shares 'bought from BoA' raise stake in China bank to 6.5%
By Alvin Foo
TEMASEK Holdings invested US$600 million (S$877 million) to raise its stake in China Construction Bank (CCB) during Bank of America's recent sale of CCB shares, sources have told The Straits Times.
Last week, it was reported that Bank of America (BoA) had sold 13.5 billion of its CCB shares at HK$4.20 each to a consortium including Temasek, a China Life Insurance unit and Chinese private equity fund Hopu Investment Management.
Asked about its CCB investment, a Temasek spokesman said it was 'inappropriate to comment on market speculation'.
The deal, which comes to about US$7.3 billion, is believed to be Asia's largest so far this year.
Observers said the deal is significant because it marks the first time a large Chinese state-owned enterprise has partnered a foreign entity in such a major transaction.
Based on yesterday's closing price of HK$4.93 for CCB shares, Temasek has already gained a paper profit of 73 HK cents per share, or a 17.4 per cent potential return on its new investment.
This notional profit comes just a few days after Temasek announced it had sold its 3 per cent stake in BoA.
Temasek's BoA sale came during the first three months of this year and resulted in an estimated loss of between US$2.3 billion and US$4.6 billion.
Analysts and fund managers have observed that Temasek's recent moves are in line with the tweaking of its long-term investment strategy.
This is designed to see it focusing more on Asia and emerging markets, while reducing emphasis on developed countries such as the United States and Europe.
