LOL!!!By P.R. VENKAT and SE YOUNG LEE
SINGAPORE -- Singapore state-owned investment company Temasek Holdings Pte. Ltd.'s total portfolio value as of end-March fell more than 40 billion Singapore dollars (US$27.75 billion) from a year earlier, Chief Executive Ho Ching said Wednesday.
"We are certainly not happy with the negative wealth added in March last year as well as March this year," Ms. Ho said in a speech at the Institute of Policy Studies in Singapore.
However, the figures show that Temasek has recouped some of the initial losses made at the height of the financial crisis as global markets begin to rally on hopes that the worst of the downturn has passed. The Singapore government had said earlier that Temasek's overall portfolio had fallen by 58 billion Singapore dollars to 127 billion Singapore dollars from end-March to November of 2008. Still, Ms. Ho said the bulk of incentives to senior management has been deferred by three to 12 years.
She also said that Temasek's chief executive succession review continues with the impending departure of Chief Executive-Designate Charles "Chip" Goodyear.
Last week, Temasek said it and Mr. Goodyear mutually agreed to part ways -- just a little more than two months before the former BHP Billiton Ltd. chief was to replace Ms. Ho. Temasek said that time that the decision was due to "differences regarding certain strategic issues."
Mr. Goodyear will leave the company on Aug. 15. Ms. Ho said in her speech that his departure was "unfortunate."
"This does not mean, however, that we should stop this discipline of succession review," she said.
In February, Temasek surprised many when it named U.S.-born Mr. Goodyear as successor to Ms. Ho, who is married to Singapore Prime Minister Lee Hsien Loong and is daughter-in-law of the founder of modern Singapore, Lee Kuan Yew. The move was considered by many as an attempt to inject fresh blood into Temasek, which suffered from losses from the sharp global market downturn and under public scrutiny over big losses from investments in Western banks, including Merrill Lynch & Co. – later taken over by Bank of America Corp. – and Barclays PLC.
A person familiar with the situation told Dow Jones Newswires that Mr. Goodyear's proposals for the firm's new strategic direction were considered too risky by some, without elaborating. He also said Mr. Goodyear planned changes in senior management that weren't well received by Temasek's board.
Ms. Ho said Temasek will keep its portfolio exposure to Asia at 70% or more, its current exposure to members of the Organization for Economic Cooperation and Development at around 20%, and its exposure to new regions like Latin America, Africa and others at up to 10%.
"We continue to anticipate opportunities, not just within Asia, but also in Latin America and elsewhere, too," Ms. Ho said in her speech. Temasek's investment exposure levels are consistent with Ms. Ho's comments about portfolio realignment in May.
The executive said at the time that Temasek plans to reduce its OECD exposure to 20% from about a third of its portfolio previously and instead allocate up to 10% of its portfolio to assets for Latin America, Russia and Africa. The executive also said the company remains comfortable with investing in financial services despite heavy losses from Western banks, noting that in emerging markets, the sector often serve as proxy for economic growth.
Ms. Ho said the company will also look at opportunities in the food and energy sectors, but that Temasek doesn't target specific sectors.
Separately, she said the company was exploring the possibility of creating "one more group of stakeholders." The executive said Temasek was exploring various options, including inviting the public to co-invest with the firm. She didn't elaborate further on the matter. Temasek, a company set up in 1974 as a vehicle to hold government investments and assets, including major stakes in some of the city-state's more prominent businesses, is fully owned by the government at this time.
Write to P.R. Venkat at [email protected] and Se Young Lee at [email protected]
