Temasek Holdings Pte, Singapore’s state-owned investment company, bought shares in China Construction Bank Corp. (939) for as much as HK$21.7 billion ($2.8 billion) about eight weeks after paring its holdings.
Temasek purchased 4.4 billion shares, paying as much as HK$4.94 apiece and increasing its stake to 8.1 percent of the Hong Kong-listed shares, according to a filing to the Hong Kong stock exchange yesterday. Bank of America Corp. (BAC) said Aug. 29 that it agreed to sell about half its stake in the Beijing-based lender for $8.3 billion to bolster capital.
The purchase rebuilds Temasek’s stake in CCB at a cheaper price after it sold HK$9.4 billion of stock at HK$6.26 a share in July. Temasek said after the sale that it remained “bullish” on CCB, which has dropped 14 percent in Hong Kong trading since the end of June on concern the nation’s record $2.7 trillion lending boom will lead to a wave of defaults.
The purchase “reflects a long-term confidence in the Chinese economy and Chinese banking sector,” Eugene Tan, an assistant professor of law at the Singapore Management University, said by telephone. “Given the volatility of the markets, investors like Temasek may be forced to adopt such strategies to enable them to continue toward their longer term objectives of making good returns.” -Bloomberg
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