[caption align="alignright" caption="Bank of China headquarters"] [/caption]
The sale, which comes just a couple weeks after it bought a $2.3 billion stake in rival Industrial and Commercial Bank of China (ICBC), signals a reshuffling of Temasek's $150 billion portfolio while maintaining its confidence in the potential of Chinese banks , according to experts.
The fund raised about $1.24 billion selling 3.1 billion shares of the Bank of China at HK$3.13 ($0.40) each and another $1.24 billion selling 1.61 billion CCB shares at HK$5.99 ($0.77) each.
"Temasek continues to see the leading Chinese banks as long-term proxies to the growing Chinese economy as well as the country's rising middle-income groups," said Temasek spokesman Jeffrey Fang, according to Reuters.
While the two banks had been weak performers recently, and shares for both were down 3.1% in Hong Kong today, Temasek still holds a 7% stake in CCB and a 1% stake in the Bank of China.
"Temasek's latest sell decision sends a powerful signal to investors," said Jim Antos, a Hong Kong-based analyst at Mizuho Securities Asia. "To me, it's signaling a longer-term investment reallocation by Temasek."
Indeed, the fund's decision to increase its interests in ICBC came at the right time. The world's most profitable lender is reporting a 14% increase in earnings.
Despite the shifts in investment, Temasek will still control more than $17 billion in Chinese bank shares, according to Fang.
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