Dec. 24 (Bloomberg) -- Temasek Holdings Pte, the biggest shareholder in Standard Chartered Plc, increased its stake in the U.K. bank by 1 percentage point to 18 percent, helping it boost banking investments in its $100 billion portfolio.
The Singapore sovereign wealth fund has been raising its stake in Standard Chartered since it first bought a 12 percent holding more than a year ago. Temasek bought 12 million shares to lift its stake to 253.7 million shares, the bank said in a filing on Dec. 21. The additional shares are worth 220 million pounds ($436 million) at that day's closing price of 1,835 pence.
Set up in 1974 to run state assets, Temasek's financial services investments now include India's ICICI Bank Ltd. and Bank of China Ltd., as well as a controlling stake in DBS Group Holdings Ltd., Southeast Asia's biggest bank. It may also invest $5 billion in Merrill Lynch & Co., the Wall Street Journal reported last week, citing unidentified people.
``Most of Temasek's investments in the banking sector are doing very well,'' Teng Ngiek Lian, who manages $3 billion of Asian stocks as chief executive officer of Target Asset Management in Singapore, said in an interview today. ``Standard Chartered is very well exposed to the emerging markets, which many view as very exciting.''
Shares of Standard Chartered, which gets most of its profit from Asia, rose 1.1 percent to 1,856 pence at 8:59 a.m. in London trading. The stock has risen 24 percent this year, the best performer on the nine-member FTSE All-Share Banks Index.
`Comfortable' With Shareholding
Temasek first bought a stake in Standard Chartered from the estate of late Singapore hotelier Khoo Teck Puat in March 2006. Temasek held 13 percent of the London-based bank as of March this year, according to its annual report.
``We are comfortable with our current level of shareholding'' in Standard Chartered, Simon Israel, executive director at Temasek, said in an e-mailed statement today. ``As a financial investor, we are not involved in the bank's board and management.''
Israel didn't comment on the Merrill report in today's e- mail. The Journal said Dec. 21 the Singapore fund will invest in the world's biggest brokerage through a cash infusion. Merrill announced $8.4 billion of writedowns on mortgage-related investments and corporate loans on Oct. 24, and then ousted Chief Executive Officer Stan O'Neal. The stock rose 1.9 percent on Dec. 21 following the report on Temasek's investment.
The latest purchase also puts Standard Chartered closer to being at risk of losing the ability to issue notes in Hong Kong. The city will bar lenders that are 20 percent owned by foreign governments from issuing bank notes denominated in the local currency, the Hong Kong Monetary Authority said in July.
Investments in financial services companies accounted for 38 percent of Temasek's portfolio in the year ended March, compared with 35 percent a year earlier, making it the biggest industry for the company's assets, according to its annual report.
