SINGAPORE: Temasek Holdings' portfolio of investments fell 31 per cent to S$127 billion as of 30 November last year, according to latest data revealed in Parliament on Tuesday.
This was down S$58 billion from S$185 billion eight months earlier in light of the global financial crisis.
Senior Minister of State for Finance and Transport, Lim Hwee Hwa, said: "This is less than the corresponding declines in the MSCI Singapore Index of 44 per cent and the MSCI Asia ex-Japan of 45 per cent both in Singapore dollar terms over the same period."
Despite this, the Singapore government said both Temasek as well as the Government of Singapore Investment Corp (GIC) have the ability and resources to weather the ups and downs over multiple economic and market cycles.
Responding to questions in Parliament, Mrs Lim said both Temasek and the GIC have sufficient liquidity to cope with Singapore's funding needs.
Mrs Lim added that Temasek and GIC are long-term investors, and as such they do not have to divest their investments in market downturns.
She said: "They do not have to sell in panic in a market downturn, and are in fact in an advantageous position to invest in good quality assets at prices that are attractive from a long-term perspective during a downturn. The government is confident that they will continue to deliver good long-term returns within the risk limits set."
Mrs Lim said this is not the first major downturn both soveriegn wealth funds had gone through. She noted that both Temasek and GIC had bounced back from significant reductions in asset values in previous slumps, including the 1997 Asian Financial Crisis.
And despite the downturns, the two investment companies had seen credible investment returns over the years.
Mrs Lim said: "In spite of these market gyrations, including the current downturn, for the 20-year period to late 2008, Temasek had achieved annualised returns of about 13 per cent. GIC, which has a diversified and more conservative portfolio, also had credible returns over the 20-year period.
"As at March 2008, the 20-year average return was 5.8 per cent in nominal Singapore dollar terms. The figure for March 2009 would have fallen as a result of the decline in 2008, but would not be sharply down."
Mrs Lim also reiterated that Temasek must continue to operate commercially without government interference. But she does not rule out the possibility of a third investment fund set up to buy into local companies hit by the current downturn. Mrs Lim was addressing suggestions for Temasek to play a role in rescuing local firms that have been affected by the economic crisis.
She said: "If Temasek is asked to undertake a national agenda, it will in fact validate some of the concerns over sovereign wealth funds having political objectives, and may ultimately impede Temasek's ability to participate in investments internationally."
- CNA/yt
This was down S$58 billion from S$185 billion eight months earlier in light of the global financial crisis.
Senior Minister of State for Finance and Transport, Lim Hwee Hwa, said: "This is less than the corresponding declines in the MSCI Singapore Index of 44 per cent and the MSCI Asia ex-Japan of 45 per cent both in Singapore dollar terms over the same period."
Despite this, the Singapore government said both Temasek as well as the Government of Singapore Investment Corp (GIC) have the ability and resources to weather the ups and downs over multiple economic and market cycles.
Responding to questions in Parliament, Mrs Lim said both Temasek and the GIC have sufficient liquidity to cope with Singapore's funding needs.
Mrs Lim added that Temasek and GIC are long-term investors, and as such they do not have to divest their investments in market downturns.
She said: "They do not have to sell in panic in a market downturn, and are in fact in an advantageous position to invest in good quality assets at prices that are attractive from a long-term perspective during a downturn. The government is confident that they will continue to deliver good long-term returns within the risk limits set."
Mrs Lim said this is not the first major downturn both soveriegn wealth funds had gone through. She noted that both Temasek and GIC had bounced back from significant reductions in asset values in previous slumps, including the 1997 Asian Financial Crisis.
And despite the downturns, the two investment companies had seen credible investment returns over the years.
Mrs Lim said: "In spite of these market gyrations, including the current downturn, for the 20-year period to late 2008, Temasek had achieved annualised returns of about 13 per cent. GIC, which has a diversified and more conservative portfolio, also had credible returns over the 20-year period.
"As at March 2008, the 20-year average return was 5.8 per cent in nominal Singapore dollar terms. The figure for March 2009 would have fallen as a result of the decline in 2008, but would not be sharply down."
Mrs Lim also reiterated that Temasek must continue to operate commercially without government interference. But she does not rule out the possibility of a third investment fund set up to buy into local companies hit by the current downturn. Mrs Lim was addressing suggestions for Temasek to play a role in rescuing local firms that have been affected by the economic crisis.
She said: "If Temasek is asked to undertake a national agenda, it will in fact validate some of the concerns over sovereign wealth funds having political objectives, and may ultimately impede Temasek's ability to participate in investments internationally."
- CNA/yt
