Temasek Holdings Buys More ICBC

ChinaTemasek Holdings, Singapore’s sovereign wealth fund said it was purchasing US$ 2.3 billion worth of Industrial and Commercial Bank of China’s (ICBC) shares from Goldman Sachs. The amount of shares to be sold is 3.55 billion Hong Kong-listed shares.

Temasek Holdings is continually realigning its financial portfolio after announcing plans to sell Indonesian bank Danamon to DBS Group of Singapore. Temasek Holdings is counting on further development of China’s financial banking industry. China’s state-owned banks continue to enjoy monopolistic advantages and are able to generate growing profits.

The Singapore sovereign wealth fund has positions in many banks both in developed and emerging markets. Temasek Holdings currently owns significant stakes in Chinese financial institutions such as the Bank of China and China Construction Bank.

Temasek Holdings believes the purchase price was reasonable and is optimistic about the industry and future growth prospects.

Goldman Sachs purchased around 4.9% in ICBC before its initial public offering in 2006. After the sale to Temasek Holdings, Goldman Sachs will have around US$ 3 billion left in ICBC shares. Major Western banks such as UBS, Royal Bank of Scotland, and Bank of America have been shedding their positions in Chinese banks over the past few years to shore up liquidity on their own balance sheets.

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