Data from SNL Financial, released earlier this week,showed that Singapore state-owned fund Temasek Holdings is the single-largest foreign investor in Chinese banks amongst the top 25 foreign investors in China. The SNL index also showed that Chinese banks had outperformed their regional peers in the Asia-Pacific, including Japan and Australia.
The SNL China Bank index gained 34.71 percent in the one year through March 31, outperforming the SNL APAC Bank index, which rose 7.56 percent.
Data on foreign investments in Chinese banks included all classes of publicly traded common shares, but excludes investments reported before January 2014. With the market value of each investors stake in a firm calculated based on the closing prices reported at the end of March 2015, Temasek emerged as the largest foreign investor. Temasek’s combined value across banks was estimated to be worth US$18 billion (S$24.5 billion).
Temasek has a six percent stake in China Construction Bank Corp (CCB), worth $12 billion, in addition to investments in the Industrial & Commercial Bank of China (ICBC) valued at $5.76 billion. Vanguard Group Inc and BlackRock Fund Advisors are ranked second and third respectively, with holdings in 15 Chinese banks valued at $6.14 billion and cross-sector holdings valued at US$4.96 billion respectively.
The two UK units of BlackRock maintained aggregate investments of close to $480 billion in the China market.But US institutional investors maintain the largest stakes in mainland Chinese banks, with a combined value of $20.1 billion of shares in Chinese lenders. Besides Temasek, Eastspring Investments, a unit of Prudential, maintains investments totalling $810 million in four mainland Chinese banks.
The fourth-ranked firm investing in mainland Chinese banks is Norges Bank Investment Management, maintains a portfolio worth $2.74 billion.
ICBC and CCB are popular with foreign investors, with 413 and 391 firms respectively holding stocks in them, according to the SNL data. CCB had the highest total value of foreign ownership, worth $25.03 billion. ICBC followed in second with $19.45 billion, while Bank of China had foreign ownership worth $11.09 billion. The Agricultural Bank of China had $5.68 billion of its value attributed to foreign investors.
Temasek has stakes in the Bank of China, China Construction Bank and the Industrial and Commercial Bank of China. Other banks that Temasek has invested in are Standard Chartered, Lloyds Banking Group, PT Bank Donavon and DBS Group.