Temasek Holdings Pte, Singapore’s state-owned investment firm, purchased U.S.-listed stocks in Chinese technology and consumer firms backed by the country’s billionaires as it diversifies away from bank holdings.
Temasek, directly or through its units, bought 602,139 American depositary receipts of China’s second-largest e-commerce site JD.com Inc. (JD:US) with a market value of $17.2 million, according to a filing yesterday with the U.S. Securities and Exchange Commission. It also purchased a net 603,764 ADRs in security software maker Cheetah Mobile Inc. (CMCM:US), valued at $12.8 million. Both companies were listed in May.
The transactions help the city-state’s investment firm extend its reach in the world’s second-biggest economy and ease its reliance on the nations’ banks. While two of Temasek’s six biggest listed global holdings by market value are still Chinese lenders, it also acquired stakes in consumer-related firms this year and last.
“In terms of region they are increasing their exposure to China,” said Song Seng Wun, an economist at CIMB Research in Singapore. “In terms of investment themes, they are buying consumer-oriented assets which helps them go beyond financial assets in the country.”
Software maker Cheetah raised $168 million in its U.S. IPO on May 8. The company is backed by Kingsoft Corp. (3888) and Tencent Holdings Ltd. (700), which is run by China’s richest man Ma Huateng. Ma has a net worth estimated at $16.5 billion, according to the Bloomberg Billionaires Index.
JD.com had its U.S. initial public offering in May when it raised $1.78 billion by selling 93.7 million ADRs. The firm is controlled by Richard Liu, China’s sixth-richest person with a $8.6 billion fortune, according to the index.
Temasek held 1 million shares in Cheetah Mobile in May after the IPO, according to data (CMCM:US) compiled by Bloomberg at the time. Yesterday’s filing shows it owned 603,764 shares at the end of June, indicating it sold 396,236 shares. The share price gained 52 percent until the end of June.
GIC, Singapore’s sovereign wealth fund, owns about 13 percent of Cheetah, according to data (CMCM:US) compiled by Bloomberg.
Money managers who oversee more than $100 million in equities must file a Form 13F with the SEC within 45 days of each quarter’s end to show their U.S.-listed stocks, options and convertible bonds. The filings don’t show non-U.S. securities or how much cash the firms hold.
Temasek, the biggest foreign investor in China’s largest banks, has stakes in Industrial & Commercial (1398) Bank of China Ltd., China Construction Bank Corp. (939) and Bank of China Ltd. (3988) valued at $20 billion, according to data compiled by Bloomberg.
Temasek in March agreed to buy a 25 percent stake in Hong Kong-based Hutchison Whampoa Ltd. (13)’s retail arm A.S. Watson & Co., which has more than 10,500 retail outlets in Asia and Europe, for HK$44 billion ($5.7 billion).
Temasek is also invested in China’s biggest e-commerce operator, Alibaba Group Holding Ltd. (BABA:US), which is headed toward what may be the largest U.S. IPO in history.
Among Temasek’s other transactions in U.S.-listed companies in the second quarter was the purchase of 1.5 million shares in travel software and data company Sabre Corp. (SABR:US) which had its IPO in April, according to yesterday’s filing.
Temasek sold 5.8 million shares in fertilizer company Mosaic Co. (MOS:US) and increased its holdings in enzyme product developer BioMarin Pharmaceutical Inc. (BMRN:US) by 580,924 shares. The investment firm sold its 200,000 shares in online classified ads provider 58.com, according to the filing.
“Some adjustments occur to our holdings in various companies as we rebalance our portfolio and where we have opportunities to invest in companies consistent with our investment themes,” Temasek spokesman Stephen Forshaw said in an e-mailed statement.
Temasek, wholly owned by Singapore’s Ministry of Finance, is the ninth-biggest state investor with an estimated $177 billion of assets, according to the website of the Sovereign Wealth Center.
The investment company said last month that total shareholder return for the 12 months ended March 31 shrunk to 1.5 percent from 8.9 percent in the previous fiscal year as Asia holdings weighed on the performance.
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