The relentless march of sovereign wealth funds continues apace as the Singapore Government's Temasek vehicle emerged with an 18 per cent stake in Asia-focused banking group Standard Chartered.

The stake, up from the previous 17 per cent holding, means Temasek holds more than 240 million shares, about 60.4 million of which have voting rights.

The stakebuilding helped push shares in the London-listed Standard Chartered up 29p to £18.64. The bank has a stock market worth of about £25.8 billion, with Temasek's holding worth more than £4.6 billion.

Continued stakebuilding in Standard Chartered has seen its shares change hands for record prices and in unprecedented trading volumes in recent weeks.

Temasek's increased stake flies in the face of market speculation earlier this month that it was coming under pressure to sell to unnamed Chinese investors.

Temasek is also in advanced talks with Merrill Lynch, the Wall Street securities broker, to take a stake worth about $5 billion.

It is understood that the deal with Merrill, the latest in a growing list of stakebuilding by sovereign funds, could yet fall through.

In recent weeks some of the biggest titans of the banking world have raised stop-gap capital from state-owned investment groups.

Citigroup, the world's biggest bank, received a $7.5 billion cash injection from the Abu Dhabi Investment Authority, while Morgan Stanley turned to the state-backed China Investment Corporation for $5 billion.

UBS, the Swiss bank, negotiated a SwFr13 billion stake sale to the Singapore Investment Corporation and an unnamed investor in the Middle East, thought to the Saudi Arabia Monetary Agency.

Bear Stearns sold a $1 billion stake to China-backed banking group CITIC.

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