Temasek sees opportunities in Latin America, food, energy
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SINGAPORE state investor Temasek said its portfolio slid by at least $40 billion, or more than a fifth, in the year to March but it will stick with banks and sees opportunities in food and energy.
The fund saw potential in Asia and Latin America and was comfortable with financial services as its core portfolio holding, despite being hurt by the market meltdown last year after its high profile investments in Western banks, CEO Ho Ching said on Wednesday.
'At this point, we are still comfortable with the financial sector as a sector that reflects the key economies we are interested in,' she said at a lunch talk organised by the Institute of Policy Studies think-tank.
She acknowledged, however, that the increased regulation of the financial sector may result in the rate of returns falling.
'In terms of sectors specifically, we are agnostic, we don't have a sectoral target,' she said, adding the fund would look at food and energy but without giving further details.
These were the first public comments by Ms Ho, also the wife of Prime Minister Lee Hsien Loong, after Temasek said last week that Charles 'Chip' Goodyear will not become CEO due to differences over strategy.
With 40 per cent of its holdings in financials, Temasek's portfolio lost nearly a third in the eight months to November, sparking unprecedented criticism in Singapore about its strategy. Ms Ho did not give the exact portfolio level as of March 2009.
'In our Temasek Review last year, we reported an annual value-at-risk of almost $40 billion last March. This meant a 16 per cent probability for our portfolio value to drop more than $40 billion by March this year. Indeed, it has turned out to be so, and more,' said Ms Ho in her speech.
Temasek had S$185 billion in assets as of end-March 2008, which fell to S$127 billion as of November 2008.
Mr Goodyear was widely expected to trim Temasek's financial holdings and move aggressively into commodities and energy and into emerging market infrastructure and consumer retail sectors, analysts and bankers have said. Ms Ho said Temasek would continue to look at internal and external candidates for her replacement.
Mr Goodyear's departure came less than six months after he was named by Temasek as the sovereign wealth fund's first foreign CEO. He would have replaced Ms Ho on Oct 1. -- REUTERS
