Bank of China

Temasek increases holding in StanChart

PUBLISHED : Thursday, 23 August, 2007, 12:00am
UPDATED : Thursday, 23 August, 2007, 12:00am

Temasek Holdings, the Singapore government's investment arm, raised its stake in Standard Chartered last week to 15.29 per cent from 14.06 per cent, the bank said in a filing with the London Stock Exchange.

The move came after the Hong Kong Monetary Authority last month banned foreign governments from owning 20 per cent or more of the city's three note-issuing banks to guard against undue outside influence on the banking system.

Hongkong and Shanghai Banking Corp, Bank of China (Hong Kong) and Standard Chartered (Hong Kong) issue notes in Hong Kong.

'We have increased our stake in what we have always considered to be a good investment, the reason we went in the first place,' Bloomberg quoted Temasek spokeswoman Myrna Thomas as saying.

Temasek raised its stake in the bank on August 17 to 214.56 million shares from 197.19 million. It did not disclose the purchase price; the new shares were worth HK$3.946 billion based on their closing price on that day of HK$227.20 in Hong Kong.

Shares of Standard Chartered closed 3.64 per cent higher at HK$244.40 yesterday.

Temasek announced in March last year that it had acquired an initial 11.55 per cent stake in Standard Chartered from the estate of Singapore tycoon Khoo Teck Puat for an undisclosed sum. Since then, it has raised its holdings several times. In July, it lifted its stake to 197.19 million shares or 14.06 per cent.

There had been talk that Temasek wanted to buy control of Standard Chartered. But others are doubtful.

'I think Temasek may continue to increase its stake in Standard Chartered but maybe not over the 20 per cent ceiling, since they would prefer that Standard Chartered maintain its note-issuing-bank status,' said Kenny Tang Sing-hing, an associate director at Tung Tai Securities.

The bank's net profit rose 26 per cent in the first half as gains in consumer and wholesale banking in Hong Kong and other markets helped offset rising expenses.