Singaporean sovereign wealth fund Temasek Holdings confirmed yesterday that it had sold US$3.62 billion worth of shares in Bank of China (BoC; 3988.HK, 601988.SH) and China Construction Bank (CCB; 0939.HK, 601939.SH), the Wall Street Journal reported. Both Temasek and the lenders in question played down the sale; Temasek said the move is part of a portfolio rebalancing that is intended to address an overexposure to financial companies, currently around 37% of its holdings. Nevertheless, the share sale was a surprise and – given the size of the transaction – had a negative influence on Chinese bank stocks, especially given rising concerns about Chinese banks’ exposure to bad local government debt. BoC shares closed down 3.6% on the day, while CCB shares fell 3.2%. Both are down between 9-10% this year. Temasek will retain a 2.2% stake in BoC and 6.2% in CCB.