Singapore-based Temasek is planning to sell 5.2 billion of the shares it owns in Bank of China [Zhong Guo Yin Hang], the listed Beijing-based bank, to raise up to HKD 18.7bn (USD 2.4bn), the online Oriental Daily reported.
Citing an undisclosed market source, the report said Temasek is planning to sell the shares between HKD 3.6 and HKD 3.67 a share. Morgan Stanley is the arranger for the share sale, the report noted.
This is not the first time Temasek, the investment arm of the Singapore government, has sold off large chunks of BOC shares. Back in November 2007, Temasek shed a USD 567m stake in the wake of the US subprime mortgage crisis.
China Construction Bank: Temasek said to be selling 1.5bn shares to raise up to USD 1.2bn
Two shareholders of listed China Construction Bank (CCB) [Jian She Yin Hang] are planning to sell 1.5bn shares to raise up to HKD 9.3bn (USD 1.2bn), the online edition of Hong Kong Economic Journal reported. Citing a sale document that was in turn quoted by an unnamed newswire, the report said the shares would be sold between HKD 6.22 and HKD 6.35 apiece. The report, however, did not name the two shareholders.
A separate report in the online edition of Oriental Daily, which cited an undisclosed market source, said Singapore-based Temasek is planning to sell 1.5bn of CCB shares to raise HKD 9.3bn. The report noted that Morgan Stanley is the arranger for the share sale.
Woah did China Premier Wen Jia Bao just break up an affair with Singapore's first lady or something?! That is supposed to be funny, because Ho Ching, CEO of Temasek Holdings, is the wife of Lee Hsien Loong, who, in case you do not know or have not googled already, is the current Prime Minister of Singapore. Actually maybe it is not that funny, nevermind.
When I finished posting on Kyungeun Mutual Savings Bank yesterday I really had it in mind to spend today digging a little deeper into the company's operations, but then this chili crab just crawled out of nowhere, and so quickly, that I just had to comment on it. I first saw the rumour (as above) a little past midnight last night, and by the morning this deal was done!!!
This was surprising to me because for the past two years of my banking career I had not heard any rumours or tips suggesting that Temasek may be selling anything. I am not aware of them being in need for cash nor looking strongly to rebalance their portfolio, although to be fair I am not always particularly aware of very much.
The article linked to the word "done" above is already extremely comprehensive in coverage of the deal, so I will try not to regurgitate. If any of you are constrained for time I urge you to ignore everything below this and read that article instead.
1. Temasek website
Temasek manages a portfolio of SGD186bn (approx. USD155bn) with a staff of approx. 380 people. That's like an average of USD400mn per employee to manage - wow that is quite a statistic. Temasek also seems particularly proud of the fact that they CAGR'd (note: CAGR stands for Compound Annual Growth Rate, pronounce kay-gur) a total shareholder's return of 17% for the past 36 years, and so they should be proud I think - they are very quickly catching up to the track record of Warren Buffet's Berkshire Hathway!
Perhaps the BOC/CCB deal was financially driven then? Maybe they expect total returns from either investment to be significantly less than their proud 17%?...
They also have a bunch of information on their portfolio breakdown, investment strategies...blah. Of marginal interest is the fact that in 2009, 33% of their portfolio was invested in financial services. This increased to 37% in 2010. While they obviously do not publicly state any target sector weightings, the surge may have, in part, prompted them to rebalance.
Under their "Major Portfolio Companies" section they disclose all their major holdings - admirable! Not many investment funds seem to do that. CIC definitely doesn't. Here I note that they actually hold controlling/majority stakes in 2 banks - NIB Bank (Pakistan) and Bank Danamon (Indonesia). This makes Temasek different from CIC, which I found out 3 days ago that they only acquire minority stakes. Is it possible that they are selling down their minority holdings to look to take controlling stakes of smaller closely-held banks? Seems unlikely, but worth keeping in mind.
Final Commentary
Ok, lunch time is over, must get back to work. I am still a little shocked by the suddenness of the deal. I wonder what the Temasek guys are saying about Standard Chartered, which they also hold a minority stake in. Despite having left that bank now I still feel a certain fondness for it, sort of like the way you think about your first girlfriend from highschool. I hope she, I mean Standard Chartered, is doing ok.
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