Temasek Holdings said its partial sale of stakes in China's state-owned banking giants Bank of China and China Construction Bank is part of its routine portfolio adjustment.
"This sale is part of our portfolio rebalancing, which we do from time to time," the Business Times quoted a Temasek spokesman as saying in a statement on Wednesday. "Temasek continues to hold substantial positions in Chinese banks."
Temasek Holdings reportedly raised 3.62 billion U.S. dollars from share placements in the two banks.
Temasek had a 6.76 percent stake, or 16.91 billion shares, in CCB as at December 31, 2010, according to the lender's annual report for 2010. It also had a 4.06 percent stake in BOC. After the share placements, its stakes in the CCB and BOC have been reduced to 6.2 percent and 2.2
Temasek Holdings's portfolio grew by 3.76 percent in the financial year ended March 31 to a record 193 billion Singapore dollars or 156.9 billion U.S. dollars.
The total shareholder return for the financial year was 4.7 percent. It had a total shareholder return of close to 17 percent since its inception in 1974.
"We ended the year in net cash with a strong balance sheet, and with full financial flexibility," the company's head of portfolio management Dilhan Pillay Sandrasegara said, adding that it is well-positioned for future opportunities.
Temasek's investment portfolio continues to focus on Asia, with 32 per cent in Singapore and 45 per cent in the rest of Asia. The rest of its investments are in areas including the North America, Latin America and the Middle East.
In Asia, China is Temasek's largest investment destination outside Singapore, comprising about 20 per cent of the firm's total investment portfolio.
On concerns about the Chinese banking sector, Mr Nagi Hamiyeh, Temasek's managing director for investment, said that the firm has "faith in the policies of the Chinese government in the long term".
"We remain bullish on China in the long term," he added.
Despite selling significant stakes in two major Chinese banks on Wednesday, Temasek remains comfortable with its position in China and continues to look at investment opportunities in the country, Mr Hamiyeh said.
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