Temasek sells Bank of America stake

by Gill Montia

Story link: Temasek sells Bank of America stake

Temasek, the investment vehicle of the Singaporean government, has sold its 3% stake in Bank of America (BoA).

The disposal was made during the first three months of this year, leaving Temasek nursing billion dollar losses.

In January 2008, Temasek invested in Merrill Lynch, which was later acquired by BoA in the wake of the Lehman Brothers crash.

Despite Merrill’s exposure to the US sub-prime mortgage debacle, Temasek expressed confidence in the bank and invested $4.4 billion, reportedly making its first acquisition in a US based group.

However, the state investment company is understood to have turned its attention to Asian, Latin American and Russian markets and earlier this week was among four investors to acquire stakes in China Construction Bank from BoA, which raised $7.3 billion from the sale.

BoA is currently busy raising funds as it heads the list of US banks needing to raise capital after undergoing a “stress test”; in a worst case scenario the group could need to find $33.9 billion.