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Temasek buys US$600 mln in CCB shares

Published: 22 May 2009 00:24:30 PST

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May. 22, 2009 (China Knowledge) - Temasek Holdings Pte Ltd, Singapore's sovereign wealth fund, has purchased US$600 million worth of shares in China Construction Bank Corp (CCB)<601939><0939> from the capital-squeezed Bank of America (BOA), the Straits Times reported on Thursday.

Last week, BOA raised US$7.3 billion through the sale of 13.5 billion H shares in CCB at HK$4.20 apiece, or a 14.3% discount to their closing price on the previous day. The buyers included a subsidiary of China Life Insurance Co Ltd<601628><2628>, the country's largest insurer by premiums, Temasek Holdings and Hopu Investment Management Co.

The move raised Temasek's holdings in CCB to 6.5%, or 14.3 billion shares, according to the newspaper.

Temasek has already earned a paper profit of HK$0.73 apiece, or a 17.4% potential return on the new investment, based on the closing price of HK$4.93 for the CCB shares on Wednesday.

Guo Shuqing, chairman of CCB, said in late March at the lender's annual report meeting for last year that Temasek hoped to further raise its stakes in the Chinese lender.

Another buyer, China Life Insurance Asset Management Co Ltd, an insurance asset management unit of China Life Insurance Co, last Tuesday bought US$1.5 billion worth of H shares in CCB from Bank of America, according to an earlier report from China Knowledge.

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