Singapore state investor Temasek Holdings has divested its entire stake of 3.8% of the Bank of America.
According to Bloomberg, the sale may have raised about $1.27 billion, based on the average price of Bank of America stock in the first quarter. This would correspond to a loss that may total $4.6 billion.
Temasek confirmed it sold its Bank of America shares, but declined to say how much it sold the stake for or when the sale was conducted.
The divestment was completed by March 31, according to a U.S. filing.
A Temasek spokesperson said it was part of a move to reduce exposure to developed economies. Temasek, whose investments shrank 31 percent in the eight months through Nov. 30, raised its stake in China Construction Bank Corp this week.
"It seems they feel the China growth story is better than the 'green shoots' of recovery in the US," said Song Seng Wun at CIMB Research.
Merrill Lynch investors received 0.8595 Bank of America stock for each share held in the U.S. brokerage in the acquisition of Merrill Lynch. The deal meant Temasek received about 188.8 million Bank of America shares, the equivalent of a 3.8 percent stake in the company.
Temasek will cut its holdings in the so-called OECD countries to 20 percent as it expands in Asia and emerging markets from Latin America to Africa, Chief Executive Officer Ho Ching said in a speech posted on the company’s Web site.
Reuters, Singapore's Temasek says has sold entire BofA stake, 14 May 2009, http://www.reuters.com/article/mergersNews/idUSSGC00114520090515
BBC News, Big loss from Singapore bank sale , 15 May 2009, http://news.bbc.co.uk/2/hi/business/8052101.stm
Bloomberg, Temasek Sells Bank of America Stake, Looks to China , 15 May 2009, http://www.bloomberg.com/apps/news?pid=20601087&sid=aUY063JtjfFI&refer=h...