Temasek, which has been aggressively expanding beyond the limited domestic market, said it acquired 165 million shares of Telekom Malaysia Bhd. at M$9.70 (ringgit) a share.

At this price, the deal is worth M$1.60 billion ($US421.2 million). It gives Temasek a five percent stake in the top Malaysian telephone company.

News reports from Kuala Lumpur said Temasek acquired the stake from a block of 300 million shares the Malaysian state investment agency, Khazanah Nasional Bhd., offered in a private placement.

"Our investment reflects our confidence in the continued growth and success of the Malaysian economy and its telecom sector," a Temasek spokeswoman said here.

"Telekom Malaysia is a commercially attractive investment and we believe in its long term growth prospects. We are glad to have this opportunity to participate as a long-term investor."

Cash-rich Temasek has gradually been shedding light on its extensive operations as part of a makeover to boost its expansion strategy into Asia.

Last month, Temasek executive director Ho Ching said it planned to open its books to get a credit rating in a vital step towards demystifying the company.

Temasek holds substantial stakes in almost every sector of the Singapore economy spanning ports, banks, airlines, telecoms, media, shipping and utilities.

Last year it joined forces with Germany's Deutsche Bank in a winning bid for a 51 percent stake in Indonesia's fifth largest lender, Bank Danamon, valued at US$350 millions.

In December, it bought a 5.2 percent stake in India's largest private lender, ICICI Bank, worth an estimated $200 million.

There had also been news reports about Temasek being in talks to acquire a stake in a Malaysian bank.
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