Benjamin Scent
Wednesday, January 30, 2008
Hong Kong is monitoring Temasek Holdings' investment in Standard Chartered (2888), the financial secretary's office said yesterday, after Temasek's recent move to increase its shareholding in the lender came closer to threatening its banknote-issuing status in the city.
A spokesman for Financial Secretary John Tsang Chun-wah told Bloomberg the financial regulator is "keeping an eye" on Temasek, but the Singaporean state-owned firm's actions have not triggered any action yet.
In its latest move on January 23, Temasek acquired 14.5 million shares of London-based Standard Chartered, raising its stake to 19.03 percent from 18 percent. On December 21, it had increased its holding from 17 percent.
The two share purchases nudged Temasek closer to the 20 percent foreign-ownership limit imposed on Hong Kong's three note-issuing banks.
If Temasek's stake exceeds 20 percent, the bank's subsidiary, Standard Chartered Bank (Hong Kong), could lose its note-issuing status. The other note issuers are Hongkong and Shanghai Banking Corporation and Bank of China (Hong Kong).
Monetary Authority chief executive Joseph Yam Chi-kwong said if any sovereign wealth fund wants to hold a 20 percent or higher stake in a note-issuing bank, the authority will be in touch with the fund.
Yam added he would not comment on individual cases, but said the authority will "take necessary action" as warranted.
A Standard Chartered spokeswoman said Temasek is "aware of the broader implications" of its shareholding level.
BOC International analyst Wong Kwok-wai said Temasek would be unlikely to cross the threshold without first consulting with the bank.
"We are proud to be the longest- serving note-issuing bank," the Standard Chartered spokeswoman said.
http://www.thestandard.com.hk/news_detail.asp?pp_cat=30&art_id=60897&sid=17340242&con_type=1
