Singapore - AFP
Singapore state investment firm Temasek Holdings has sold part of its stakes in two of China\'s biggest banks for a total of $3.62 billion. Temasek sold part of its Hong Kong-listed shares in China Construction Bank (CCB) and Bank of China (BOC) two of China\'s \"Big Four\" through two holding units, Dow Jones Newswires said, quoting a source familiar with the deal. A Temasek spokesman declined to comment when contacted by AFP. Temasek unit Fullerton Financial Holdings Pte Ltd sold 5.188 billion shares in Bank of China through placements, raising $2.42 billion. And Cairnhill Investments (Mauritius) Pte Ltd and Crescent Investments (Mauritius) Pte Ltd, two other Temasek units, sold 1.502 billion shares in China Construction Bank to raise $1.2 billion. By the lunch break in Hong Kong trade BOC shares had fallen 3.4 percent and CCB was down 2.9 percent. The sales come amid concerns about Chinese banks\' debt exposure after China\'s National Audit Office said local governments owed $1.65 trillion as of the end of 2010, of which a big proportion could go sour. However, that announcement -- the first time China has given an overall figure for local government debt was followed by a warning on Tuesday from ratings agency Moody\'s that the debt could have been understated by about $541.6 billion. The agency also said a lack of a plan to tackle the bad loans meant it could downgrade its outlook for Chinese banks to negative. According to Temasek\'s annual report for the year to March 2010, the investment firm held stakes of four percent in Bank of China and six percent in China Construction Bank. Temasek had a global portfolio worth Sg$186 billion ($151 billion) as of the end of March 2010, focused largely in Singapore, Asia and emerging economies.