Singapore investment firm Temasek said Wednesday it will cut its stake in local telecom giant SingTel, which one analyst said could point to a shift to higher-yielding emerging markets.
"I confirm that we have entered into an agreement to sell 400 million shares in Singtel," a Temasek Holdings spokesman said in an email response to AFP queries.
This would reduce the sovereign wealth fund's stake in the firm from 54.4 percent to 51.9 percent, he stated.
"As an active investor for the long term, we rebalance our portfolio from time to time. We continue to be a significant shareholder in SingTel, which remains the largest company in our portfolio."
Dow Jones Newswires quoted two people familiar with the transaction as saying that Temasek had priced SingTel shares at Sg$3.20 ($2.60) apiece, which will raise Sg$1.28 billion.
SingTel stocks plunged 3.90 percent to Sg$3.20 in morning trade after the announcement.
Temasek's sale of SingTel shares came a day after it was reported to be sounding out potential buyers for its 18-percent stake in British bank Standard Chartered worth £6.0-billion ($9.7 billion).
The moves were "possibly pre-empting a shift into higher growth areas that could be emerging markets (like) Latin America and picking up some bargains in Europe," said Justin Harper, market strategist for IG Markets Singapore.
"It obviously raises questions when you leave big banking stocks like Standard Chartered one day and then the following day, they're going to move out of Singtel which is one of the favourite stocks of Singapore," he told AFP.
"So you think, are they going to move straight back into other stocks like that? It's unlikely that they would do that, otherwise what's the point?" he added.
"So they must be looking to change their stocks somewhat, into possibly higher growth markets, and into possibly some bargains within Latin America and other emerging markets would be where you'd expect them to move some of their assets."
Temasek in July announced that its net profit in the past fiscal year fell 15.4 percent to Sg$11 billion because of a slowdown in the global economy.