Temasek generates $2.5b from China banks sell down

Temasek sold 3.1 billion BoC shares at HK$3.13 apiece, receiving about $1.24 billion, and 1.6 billion CCB shares at HK$5.99, also generating about $1.24 billion. It now holds 3.72% of BoC's Hong Kong-traded shares and 7.4% of CCB. The stakes are worth $1.3 billion and $14.1 billion, respectively.

BoC closed Wednesday at HK$3.26 but is now trading at HK$3.14, while CCB stands at HK$5.95, having closed at HK$6.18 prior to Temasek's sale. Both stocks are up more than 9% year-to-date but they still trail the Hang Seng Index.

China's Big Four state-owned banks all reported weaker-than-expected first-quarter earnings last week in the face of a slowing economy and rising funding costs. ICBC, however, fared better than its rivals, announcing a 14% year-on-year increase in net profit to RMB61.3 billion ($9.7 billion). Its non-performing loan ratio and its ratio of loans to deposits is also lower than those of BoC and CCB.

In April, Goldman Sachs exited $2.5 billion worth of H-shares in ICBC - equal to a 1.3% stake in the bank - through a block sale, with Temasek picking up the bulk of the holding.

The sovereign wealth fund has been altering its holdings in China's banks with increasing regularity. While it was initially thought that Temasek wanted to ease its exposure to financial services, it appears that opportunism outweighs the diversification imperative.

In November of last year, it bought a portion of shares in CCB from Bank of America alongside several Chinese institutions, taking its overall stake to 9.42% from 8.10%. One month earlier, Temasek reduced its holdings in both CCB and BoC. The sovereign fund raised around $3.6 billion in the process, of which $1.2 billion came from CCB shares. It subsequently bought back in at a lower price.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• Financials
• Exits
• Greater China
• Southeast Asia
• Temasek Holdings
• Bank of China
• CCB
• Exit
• Sell down
• China Development Financial Holding
• Sovereign wealth fund
• China
• Singapore