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Feb 19, 2010
TEMASEK BOND SALE
Raising the stakes risky
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I AM concerned about Temasek Holdings' upward revision of its private fund-raising scope from US$5 billion (S$7 billion) to US$10 billion ('Temasek to raise $1b in bond sale', Feb 9).
By raising funds via placement of public bonds which Temasek fully and unconditionally guarantees, Temasek is no longer only managing Singapore's surplus funds. It has, in fact, morphed into a semi-private fund management company.
The long-term borrowing of US$10 billion will be more than 5 per cent of the current total holding value of Temasek.
Temasek is indirectly leveraging on its triple A status - which comes from Singapore's surplus funds - to access global private funds.
Overall, Temasek's performance has gone reasonably well, except for some major write-offs and a few recent losses from investments.
As with all investments, there are two possible outcomes, winning or losing. Should Temasek lose all of Singapore's surplus funds, that would be sad (only?), but Singapore would be able to painfully bear with it. On the other hand, should Temasek also lose with its borrowed money, it will not only hurt Singapore's pockets, but may also shake the world's confidence in Singapore as a top financial centre.
The recent Dubai debacle is one extreme example of such a possibility. Fortunately, Dubai had a rich 'brother', Abu Dhabi, to come to the rescue.
Singapore's financial strength and stability is a key pillar of its economy. Should Temasek be allowed to leverage on and trade with the nation's future?
Lim Kay Soon
TEMASEK BOND SALE
Raising the stakes risky
<!-- by line --><!-- end by line -->
<!-- end left side bar --><!-- story content : start -->
I AM concerned about Temasek Holdings' upward revision of its private fund-raising scope from US$5 billion (S$7 billion) to US$10 billion ('Temasek to raise $1b in bond sale', Feb 9).
By raising funds via placement of public bonds which Temasek fully and unconditionally guarantees, Temasek is no longer only managing Singapore's surplus funds. It has, in fact, morphed into a semi-private fund management company.
The long-term borrowing of US$10 billion will be more than 5 per cent of the current total holding value of Temasek.
Temasek is indirectly leveraging on its triple A status - which comes from Singapore's surplus funds - to access global private funds.
Overall, Temasek's performance has gone reasonably well, except for some major write-offs and a few recent losses from investments.
As with all investments, there are two possible outcomes, winning or losing. Should Temasek lose all of Singapore's surplus funds, that would be sad (only?), but Singapore would be able to painfully bear with it. On the other hand, should Temasek also lose with its borrowed money, it will not only hurt Singapore's pockets, but may also shake the world's confidence in Singapore as a top financial centre.
The recent Dubai debacle is one extreme example of such a possibility. Fortunately, Dubai had a rich 'brother', Abu Dhabi, to come to the rescue.
Singapore's financial strength and stability is a key pillar of its economy. Should Temasek be allowed to leverage on and trade with the nation's future?
Lim Kay Soon
