Temasek diversifies China bets

SINGAPORE — Temasek Holdings has bought into two United States-listed Chinese technology firms, signalling its intent to continue its diversification away from bank holdings.

Temasek, directly or through its units, bought 602,139 American Depositary Receipts (ADR) of China’s second-largest e-commerce site JD.com with a market value of US$17.2 million (S$21.4 million), showed a filing with the US Securities and Exchange Commission on Thursday. It also purchased a net 603,764 ADRs in security software maker Cheetah Mobile, valued at US$12.8 million. Both companies were listed in May.

The transactions help Singapore’s investment firm extend its reach in the world’s second-largest 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 CIMB Research economist Song Seng Wun. “In terms of investment themes, they are buying consumer-oriented assets which help them go beyond financial assets in the country.”

Software maker Cheetah is backed by Kingsoft and Tencent Holdings, which is run by China’s richest man, Mr Ma Huateng.

Mr Ma has a net worth estimated at US$16.5 billion, based on the Bloomberg Billionaires Index. JD.com is controlled by Mr Richard Liu, China’s sixth-richest person with a US$8.6 billion fortune, said the index.

GIC, Singapore’s sovereign wealth fund, owns about 13 per cent of Cheetah, Bloomberg data showed.

Temasek, the biggest foreign investor in China’s largest banks, has stakes in the Industrial & Commercial Bank of China, China Construction Bank and Bank of China, valued at US$20 billion, Bloomberg data showed.

Temasek, in March, agreed to buy a 25 per cent stake in Hong Kong-based Hutchison Whampoa’s retail arm AS Watson & Co for HK$44 billion (S$7.06 billion). Temasek is also invested in China’s biggest e-commerce operator, Alibaba Group Holding, which is headed towards what may be the largest US IPO in history. Among Temasek’s other transactions in US-listed companies in the second quarter was the purchase of shares in travel software and data company Sabre, which had its IPO in April.

“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 a statement.

Separately, Singapore sovereign wealth fund GIC yesterday said it has acquired an 18.5 per cent stake in Brazilian education services company Abril Educacao.

GIC did not say how much it paid for the stake in Abril, a leading player in Brazil’s primary and secondary education market, but based on Abril’s latest closing share price, the stake is worth about US$265 million.

GIC has recently stepped up investments in Latin America, recently buying a stake in Brazilian online sports goods retailer Netshoes. It also opened an office in Brazil earlier this year. Agencies