<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 18, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Home comfort for Temasek as portfolio bounces back
$42b rebound in 4 months claws back most losses; investment firm sharpens focus on S'pore, Asia
By CONRAD TAN
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Temasek Holdings said yesterday that it recovered most of the heavy losses it suffered last year in the four months to July-end as financial markets rallied and it rebalanced its investment portfolio.
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</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Temasek also said it could keep most of its money in fast-growing Asia - including Singapore - and other emerging markets in future after being badly burned by recent investments in the West.
The value of its portfolio slumped $55 billion or 30 per cent to $130 billion at end-March from a year earlier. But from March 31 to July 31, it rebounded $42 billion to reach $172 billion, down just 7 per cent from $185 billion at end-March last year, Temasek said.
Its performance in August was 'roughly in line' with market indices, which have 'softened a bit', chief executive Ho Ching said.
The decline in Temasek's portfolio value since March 31, 2008 includes the losses it suffered when it sold its stakes in Bank of America (BoA) and Barclays. It is estimated to have lost £pounds;500-600 million (S$1.2-1.4 billion) on its investment in Barclays and another US$2.3-4.6 billion on BoA.
Ms Ho said Temasek is still 'open' to new investments in developed economies such as the US and Europe, including banks. But the bulk of Temasek's investments now reside in Asia-Pacific, according to its latest annual report.
At end-March, 31 per cent of its portfolio exposure was in Singapore with a further 43 per cent in the rest of Asia excluding Japan. OECD economies such as the US accounted for 20 per cent of its portfolio exposure, but this was mainly in Australia. And the OECD component also includes Temasek's exposure to Japan, which Ms Ho said is less than 5 per cent.
Indeed, a big part of Temasek's exposure outside Singapore could be through its holdings in Singapore-based firms, since Temasek measures its investment exposure by underlying assets. Some of the Singapore-based companies in Temasek's stable that have substantial assets in Australia are SingTel, CapitaLand, Singapore Power and CitySpring Infrastructure Trust.
'We are comfortable to overweight Asia,' Ms Ho told reporters yesterday. 'We are also adding exposures to other growth regions like Latin America.'
Overall, 'our portfolio exposure today is almost equally balanced between the more developed economies and the newer growth regions', she added.
But she hinted that Temasek could sell some of its assets in Asia in the short term amid worrying signs of asset bubbles. Asked if Temasek was worried about bubbles forming in Asian assets such as real estate, she replied: 'Yes, there are some signs of that.'
'When we look at overweighting Asia, we are talking in terms of the longer term, not necessarily the short term.
'We maintain the full flexibility to shift our stance,' she added.
In the long run, however, Temasek believes China and India have 'very deep potential', she said. China is already Temasek's second largest investment destination after Singapore, making up 20-25 per cent of its portfolio.
It has offices in Beijing and Shanghai, and may open more to expand its reach into China's privately owned businesses, Ms Ho added.
In addition to making direct investments in China and India, Temasek is also likely to gain further exposure to both countries through the expansion of its portfolio companies such as SingTel, CapitaLand and Standard Chartered.
Asked what Temasek could have done better to prepare for the turmoil in financial markets last year, Ms Ho admitted that it had mistakenly believed that a big, advanced economy such as the US would be an unlikely source of a global financial crisis.
'We felt that there could be a downturn, but we were looking at the triggers in the wrong places. We made the assumption that the developed economies, particularly the large economies, are well managed and that the regulatory risks are low. Hence, we did not pay that much attention.
'Today, we pay a lot of attention to what is being said and done in the US, even when we don't have large exposures to the US, because that can affect the rest of us. That would be one major change that has happened.'
Asked if public opinion influences Temasek's investment decisions, Ms Ho said: 'We are human beings. We do track some of this, but we try our level best not to let that drive our investment decisions.'
During the year to end-March, Temasek divested $16 billion worth of assets - including $11 billion from the sale of power- generating companies Tuas Power, Senoko Power and PowerSeraya. It made $9 billion in investments, including $3 billion in rights issues by its portfolio companies such as Standard Chartered, DBS Group, and CapitaLand.
'Looking ahead, we believe the worst of the global meltdown risks are behind us,' Ms Ho said, although she warned that the global recovery is likely to be sluggish.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Home comfort for Temasek as portfolio bounces back
$42b rebound in 4 months claws back most losses; investment firm sharpens focus on S'pore, Asia
By CONRAD TAN
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) Temasek Holdings said yesterday that it recovered most of the heavy losses it suffered last year in the four months to July-end as financial markets rallied and it rebalanced its investment portfolio.<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>Temasek also said it could keep most of its money in fast-growing Asia - including Singapore - and other emerging markets in future after being badly burned by recent investments in the West.The value of its portfolio slumped $55 billion or 30 per cent to $130 billion at end-March from a year earlier. But from March 31 to July 31, it rebounded $42 billion to reach $172 billion, down just 7 per cent from $185 billion at end-March last year, Temasek said.
Its performance in August was 'roughly in line' with market indices, which have 'softened a bit', chief executive Ho Ching said.
The decline in Temasek's portfolio value since March 31, 2008 includes the losses it suffered when it sold its stakes in Bank of America (BoA) and Barclays. It is estimated to have lost £pounds;500-600 million (S$1.2-1.4 billion) on its investment in Barclays and another US$2.3-4.6 billion on BoA.
Ms Ho said Temasek is still 'open' to new investments in developed economies such as the US and Europe, including banks. But the bulk of Temasek's investments now reside in Asia-Pacific, according to its latest annual report.
At end-March, 31 per cent of its portfolio exposure was in Singapore with a further 43 per cent in the rest of Asia excluding Japan. OECD economies such as the US accounted for 20 per cent of its portfolio exposure, but this was mainly in Australia. And the OECD component also includes Temasek's exposure to Japan, which Ms Ho said is less than 5 per cent.
Indeed, a big part of Temasek's exposure outside Singapore could be through its holdings in Singapore-based firms, since Temasek measures its investment exposure by underlying assets. Some of the Singapore-based companies in Temasek's stable that have substantial assets in Australia are SingTel, CapitaLand, Singapore Power and CitySpring Infrastructure Trust.
'We are comfortable to overweight Asia,' Ms Ho told reporters yesterday. 'We are also adding exposures to other growth regions like Latin America.'
Overall, 'our portfolio exposure today is almost equally balanced between the more developed economies and the newer growth regions', she added.
But she hinted that Temasek could sell some of its assets in Asia in the short term amid worrying signs of asset bubbles. Asked if Temasek was worried about bubbles forming in Asian assets such as real estate, she replied: 'Yes, there are some signs of that.'
'When we look at overweighting Asia, we are talking in terms of the longer term, not necessarily the short term.
'We maintain the full flexibility to shift our stance,' she added.
In the long run, however, Temasek believes China and India have 'very deep potential', she said. China is already Temasek's second largest investment destination after Singapore, making up 20-25 per cent of its portfolio.
It has offices in Beijing and Shanghai, and may open more to expand its reach into China's privately owned businesses, Ms Ho added.
In addition to making direct investments in China and India, Temasek is also likely to gain further exposure to both countries through the expansion of its portfolio companies such as SingTel, CapitaLand and Standard Chartered.
Asked what Temasek could have done better to prepare for the turmoil in financial markets last year, Ms Ho admitted that it had mistakenly believed that a big, advanced economy such as the US would be an unlikely source of a global financial crisis.
'We felt that there could be a downturn, but we were looking at the triggers in the wrong places. We made the assumption that the developed economies, particularly the large economies, are well managed and that the regulatory risks are low. Hence, we did not pay that much attention.
'Today, we pay a lot of attention to what is being said and done in the US, even when we don't have large exposures to the US, because that can affect the rest of us. That would be one major change that has happened.'
Asked if public opinion influences Temasek's investment decisions, Ms Ho said: 'We are human beings. We do track some of this, but we try our level best not to let that drive our investment decisions.'
During the year to end-March, Temasek divested $16 billion worth of assets - including $11 billion from the sale of power- generating companies Tuas Power, Senoko Power and PowerSeraya. It made $9 billion in investments, including $3 billion in rights issues by its portfolio companies such as Standard Chartered, DBS Group, and CapitaLand.
'Looking ahead, we believe the worst of the global meltdown risks are behind us,' Ms Ho said, although she warned that the global recovery is likely to be sluggish.
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