Temasek reduces its Alibaba stake

Temasek Holdings Pte pared its holdings in China's biggest online retailer Alibaba Group Holding Ltd in the fourth quarter while buying shares in other Chinese online companies, including Alibaba's biggest competitor, JD.com Inc.

Singapore's state-owned investment firm sold 548,769 American depositary receipts in Alibaba, leaving it with 47.5 million, according to a filing with the United States Securities and Exchange Commission on Tuesday.

The value of the holding increased by $1.03 billion to $3.86 billion as the shares gained 38 percent in the period.

Among Temasek's new acquisitions were 6.1 million ADRs in Chinese online retailer JD.com and 8.2 million ADRs in Chinese online travel company Tuniu Corp.

The adjustments reflect a broadening of Temasek's bet on China's technology sector and industries servicing a growing middle class.

Temasek first invested in Alibaba in the fiscal year ended March 2011, buying S$50 million ($36 million) of the company's China registered shares.

"Over the last two quarters, JD's growth momentum outpaced that of Alibaba," said Henry Guo, a San Francisco-based analyst at Summit Research Partners LLC.

"People believe that JD has the momentum to become a meaningful player in the e-commerce space. JD has a high brand awareness and better logistics services than Alibaba."

JD.com's revenue has grown 52 percent year-on-year in the three months ending September, while Alibaba's top-line growth was 32 percent, according to data compiled by Bloomberg.

Guo expects increasing price competition between the firms from which Alibaba will emerge in a better position as it has the higher profit margin. The analyst has a buy recommendation on Alibaba and a hold on JD.com.

Temasek increased its stakes in pharmaceutical maker Gilead Sciences Inc by 1.4 million shares, and added 888,545 shares in BioMarin Pharmaceutical Inc, a maker of therapeutic enzyme products, according to the filing.