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Coffeeshop Chit Chat - Govt Confident Of GIC & Temasek Returns</TD><TD id=msgunetc noWrap align=right>
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Singapore Confident of GIC, Temasek Long-Term Returns (Update1)
By Chen Shiyin
Feb. 10 (Bloomberg) -- Singapore is “confident” that state-owned investment companies Temasek Holdings Pte and the Government of Singapore Investment Corp. will deliver long-term returns even as stock markets tumble amid a global recession.
GIC and Temasek have the resources to weather market cycles, Lim Hwee Hua, senior minister of state with the finance ministry, said today in Parliament. The government will review the risk limits for the two state-owned investment companies, she said, adding that the existing guidelines aren’t aggressive.
The MSCI World Index tumbled 42 percent last year, the most on record, as the global financial crisis and a recession cut corporate profits. Losses at GIC and Temasek during the period were “much less” than the global slump and the companies have the ability and resources to weather the downturn, Lim said.
Temasek, which manages a portfolio of about $130 billion including stakes in Bank of America Corp. and Singapore’s DBS Group Holdings Ltd., must make its investment decisions on a commercial basis, and should itself determine whether to increase investments in local companies, Lim said.
She was responding to a question in Parliament asking if the government will ask the investment company to increase its holdings in Singapore companies as economic growth deteriorates and share prices slump.
The government will instead assess whether a separate fund is needed to rescue local companies, Lim said.
Ho Ching Steps Down
Temasek said last week Chief Executive Officer Ho Ching will step down after almost seven years and will be replaced by Chip Goodyear, a former CEO of BHP Billiton Ltd. Goodyear will be the first foreigner to run the sovereign wealth fund.
Temasek, along with GIC, reduced its equity holdings amid the global slump last year “early in the crisis,” helping the funds post smaller losses, Finance Minister Tharman Shanmugaratnam said on Jan. 19.
GIC and Temasek both have “proper, sound” risk management practices, Lim said today. They won’t be required to liquidate their investments to fund government spending, she said.
The government said last month it will use S$4.9 billion ($3.3 billion) of its national reserves to finance budget plans that include cash grants to employers in an attempt to save jobs. Singapore’s economy has contracted for three straight quarters and Prime Minister Lee Hsien Loong has said the island may remain in a recession through 2009.
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Singapore Confident of GIC, Temasek Long-Term Returns (Update1)
By Chen Shiyin
Feb. 10 (Bloomberg) -- Singapore is “confident” that state-owned investment companies Temasek Holdings Pte and the Government of Singapore Investment Corp. will deliver long-term returns even as stock markets tumble amid a global recession.
GIC and Temasek have the resources to weather market cycles, Lim Hwee Hua, senior minister of state with the finance ministry, said today in Parliament. The government will review the risk limits for the two state-owned investment companies, she said, adding that the existing guidelines aren’t aggressive.
The MSCI World Index tumbled 42 percent last year, the most on record, as the global financial crisis and a recession cut corporate profits. Losses at GIC and Temasek during the period were “much less” than the global slump and the companies have the ability and resources to weather the downturn, Lim said.
Temasek, which manages a portfolio of about $130 billion including stakes in Bank of America Corp. and Singapore’s DBS Group Holdings Ltd., must make its investment decisions on a commercial basis, and should itself determine whether to increase investments in local companies, Lim said.
She was responding to a question in Parliament asking if the government will ask the investment company to increase its holdings in Singapore companies as economic growth deteriorates and share prices slump.
The government will instead assess whether a separate fund is needed to rescue local companies, Lim said.
Ho Ching Steps Down
Temasek said last week Chief Executive Officer Ho Ching will step down after almost seven years and will be replaced by Chip Goodyear, a former CEO of BHP Billiton Ltd. Goodyear will be the first foreigner to run the sovereign wealth fund.
Temasek, along with GIC, reduced its equity holdings amid the global slump last year “early in the crisis,” helping the funds post smaller losses, Finance Minister Tharman Shanmugaratnam said on Jan. 19.
GIC and Temasek both have “proper, sound” risk management practices, Lim said today. They won’t be required to liquidate their investments to fund government spending, she said.
The government said last month it will use S$4.9 billion ($3.3 billion) of its national reserves to finance budget plans that include cash grants to employers in an attempt to save jobs. Singapore’s economy has contracted for three straight quarters and Prime Minister Lee Hsien Loong has said the island may remain in a recession through 2009.
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