Temasek Holdings seek stake rise in developing markets
Recent news reports have said that Temasek Holdings is seeking to increase their stake in foreign financial assets, both in developing markets:
On Tuesday, the Charlotte, North Carolina, bank sold 13.5 billion shares, or one-third of its 16.7% stake, in China Construction Bank for 4.20 Hong Kong dollars a share, according to there people familiar with the situation. China Life Insurance (Group) Co., Singaporean sovereign wealth fund Temasek Holdings Pte. Ltd., and private equity fund Hopu Investment Management Co. joined hands to buy the block of shares.
The price represents a 14% discount to Monday’s closing price of HK$4.90 a share. In recent days, banks representing the U.S. lender had sought buyers at higher prices that more closely matched current market levels, according to people who had been approached. A reduction in price helped seal the deal, said one person familiar with the matter.
BoA sold its stake to raise capital as per the requirements of the result of the stress tests. Elsewhere, GIC and Temasek have sought to increase its stake in an Indian bank:
The finance ministry and the Reserve Bank of India (RBI) has asked the Securities and Exchange Board of India (Sebi) to examine whether a proposal by Temasek Holdings and Government of Singapore Investment Corporation (GIC) to increase their stakes in ICICI Bank would trigger the takeover code under which they would have to make an open offer to buy an additional 20 per cent.
The Singapore government has sought clarification on a proposal for the two companies to increase their stakes in ICICI Bank to 20 per cent, each holding 10 per cent. This would collectively make them the largest shareholders in the country’s largest private bank. Currently, Life Insurance Corporate is the single largest shareholder with 9.38 per cent.
The two Singapore investment vehicles currently hold 10.3 per cent in the bank — Temasek 8 per cent and GIC 2.3 per cent.
I don’t know anything about the auditing standards of these developing markets. But let’s just hope this doesn’t happen again.