(Yicai Global) April 18 -- GIC Private, Singapore’s sovereign wealth fund, has cut its holding of China Telecom’s Hong Kong-listed shares for the sixth time this year, after China’s biggest wireless carrier saw its stock price surge amid the frenzy over artificial intelligence.

GIC sold 20.4 million Hong Kong shares of China Telecom for HKD89.3 million (USD11.4 million) on April 12, according to a filing with the Hong Kong Stock Exchange. Since the beginning of 2023, GIC has cut its stake to 10 percent from 15 percent, cashing out about HKD460 million (USD58.6 million).

China Telecom [HKG: 0728] closed down 0.9 percent at HKD4.43 (56 US cents) in Hong Kong today. The stock has surged 44 percent to date this year. The firm’s Shanghai-listed shares [SHA: 601728] ended 0.7 percent up at CNY7.08 (USD1.03) apiece today, bringing their gain to 69 percent since the end of December.

Institutions pare their shareholdings generally to balance their asset portfolios or ease cash flow pressures, Lin Jiayi, general manager of investment firm Xuanjia Private Equity Fund Management, told Yicai Global. They can also sell the shares of short-term overvalued stocks, Lin noted.

“It may be too early for GIC to reduce its holding in China Telecom’s Hong Kong shares,” said Hu Yu, chief economist at Xinding Fund Management. Most Chinese central government-owned firms that are listed in Hong Kong, especially those in the traditional industries, are still undervalued, Hu added.

Based on yesterday’s closing price of HKD4.47, China Telecom’s price-to-earnings ratio in Hong Kong exceeded 13, while its price-to-book ratio was only 0.85.

GIC also sold the Hong Kong-traded shares of other Chinese companies recently. Last month, GIC cut its stake in real estate giant China Vanke by selling nearly 1.3 million shares at HKD12.56 apiece, after China’s securities regulator said last November that developers could tap the capital markets for finance. It still owns 5 percent of Vanke’s Hong Kong shares.

On April 3, GIC trimmed its holding in China National Building Material by selling almost 3 million shares for about HKD19.1 million. It retains 317 million shares, or 7 percent, of the central government-owned firm.

Founded in 1981, GIC is a global investment management company responsible for Singapore’s foreign exchange reserves. Its investment targets include international stocks, fixed income, foreign exchange, commodities, money markets, alternative investment, real estate, and private equity.

Editor: Futura Costaglione