The Employees Provident Fund(EPF), Malaysia's biggest pension fund, sold a 4.5 per cent stake in RHB Capital Bhd (RHBCap)for RM746 million (US$237 million), two people with direct knowledge of the matter said.

The fund, RHB Capital's largest shareholder, sold 96.9 million shares at RM7.70 each, said the people who declined to be identified as the information is private.

The move comes after Prime Minister Datuk Seri Najib Razak called on state-linked institutions in March to cut their stakes in public companies to boost stock market liquidity and attract foreign investors.

Khazanah Nasional Bhd, a government investment agency, this year sold shares in companies including Malaysia Airports Holdings Bhd, CIMB Group Holdings Bhd and Telekom Malaysia Bhd.

EPF plans to gradually pare its 54 per cent stake in RHB Capital, Tajuddin Atan, RHB Capital's managing director, said in a November 8 interview.

Shares of RHB fell 1.3 per cent to RM7.80 at 10:08 am in Kuala Lumpur trading. It is the second-best performing stock on the FTSE Bursa Malaysia KLCI Index this year, having risen 47 per cent.

Nik Affendi Jaafar, an EPF spokesman, didn't answer calls to his mobile phone and wasn't immediately available when called at his office. - Bloomberg