Temasek's sale of Fortescue stake triggers sell-off

Temasek Holdings’ sale of its A$876.5 million $879 million stake in Australian iron ore producer Fortescue Metals Group triggered a sell-off in the open market yesterday as investors tried to digest why the tight-lipped Singaporean investment company would want to cash in. The sale was completed through a Morgan Stanley-led block trade after the market closed on Wednesday.

While it wasn’t clear when Temasek made its investment, as the stake wasn’t large enough to trigger a public disclosure filing, Fortescue’s share price has doubled from a low of A$3.44 in May last year and closed at a 52-week high of A$7.27 on Tuesday this week. Hence, the sale may have been nothing more than a...