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International Edition | Friday, May 9, 2014 4:43 AM AEST
International Business Times World Business > Asia/Pacific
Temasek loses $39.91 billion
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30 May 2009 @ 03:38 am AEST
Temasek Holdings, Singapore's state owned investment company lost US$39.91 billion between March and November 2008, or about half of its portfolio gains from the previous five years, the city state's finance minister, Tharman Shanmugaratnam said.
Mr. Tharman, speaking in parliament stated that the fall in the portfolio was due mainly due to the decline in the value of investments in Singapore caused due to the global financial crisis. He did not disclose the losses incurred by the fund from the recent sale of its holdings in Bank of America Corp.
Mr Tharman said, "Of the S$58 billion decline, S$32 billion was attributable to the drop in market value of just the 10 largest publicly listed Temasek-linked companies in Singapore,"
In Singapore, Temasek controls Keppel Corp., the world's largest rig-builder; Singapore Airlines Ltd.; property developer CapitaLand Ltd.; and Singapore Telecommunications Ltd., Southeast Asia's biggest telecommunications operator by revenue.
Mr. Tharman added that the S$58 billion fall also includes "all unrealized losses" including mark-to-market losses from Temasek's investment in Merrill Lynch. He said the full-year accounts ending March 2009 would not be too different from the losses disclosed since there haven't been any major changes in global equity markets from the end of November to March this year.
In December 2007, Temasek bought 14% in Merrill and this stake was converted into shares of Bank of America following Merrill's acquisition by the U.S. bank in September. Temasek confirmed that it had divested its entire stake in Bank of America during the first quarter of the year.
"The sale of its [Bank of America] stake does not signify a shift in Temasek's investment orientation, from long term to short term," Mr. Tharman said. "Temasek may divest an investment, even at a loss, to get a better mix of risks for its overall portfolio or to position itself to take advantage of opportunities elsewhere."
Mr. Tharman further stated that Temasek makes riskier investments as compared to the Government of Singapore Investment Corp., which invests Singapore's foreign-exchange reserves, and in turn is expected to generate higher returns.
"While Temasek has performed better than many other large investors over this six-year market cycle, it is not realistic to expect it to outperform in every cycle," he said. "It is also not realistic to expect it to avoid losses on every individual investment, or losses on its overall portfolio when the markets go through sharp corrections."
This article is copyrighted by Ibtimes.com.au.
International Edition | Friday, May 9, 2014 4:43 AM AEST
International Business Times World Business > Asia/Pacific
Temasek loses $39.91 billion
Comments Comment
Rating Unrated (0)
EMAIL EMAIL
PRINT PRINT
RSS RSS
SHARE SHARE
TEXT SIZE: A A A
30 May 2009 @ 03:38 am AEST
Temasek Holdings, Singapore's state owned investment company lost US$39.91 billion between March and November 2008, or about half of its portfolio gains from the previous five years, the city state's finance minister, Tharman Shanmugaratnam said.
Mr. Tharman, speaking in parliament stated that the fall in the portfolio was due mainly due to the decline in the value of investments in Singapore caused due to the global financial crisis. He did not disclose the losses incurred by the fund from the recent sale of its holdings in Bank of America Corp.
Mr Tharman said, "Of the S$58 billion decline, S$32 billion was attributable to the drop in market value of just the 10 largest publicly listed Temasek-linked companies in Singapore,"
In Singapore, Temasek controls Keppel Corp., the world's largest rig-builder; Singapore Airlines Ltd.; property developer CapitaLand Ltd.; and Singapore Telecommunications Ltd., Southeast Asia's biggest telecommunications operator by revenue.
Mr. Tharman added that the S$58 billion fall also includes "all unrealized losses" including mark-to-market losses from Temasek's investment in Merrill Lynch. He said the full-year accounts ending March 2009 would not be too different from the losses disclosed since there haven't been any major changes in global equity markets from the end of November to March this year.
In December 2007, Temasek bought 14% in Merrill and this stake was converted into shares of Bank of America following Merrill's acquisition by the U.S. bank in September. Temasek confirmed that it had divested its entire stake in Bank of America during the first quarter of the year.
"The sale of its [Bank of America] stake does not signify a shift in Temasek's investment orientation, from long term to short term," Mr. Tharman said. "Temasek may divest an investment, even at a loss, to get a better mix of risks for its overall portfolio or to position itself to take advantage of opportunities elsewhere."
Mr. Tharman further stated that Temasek makes riskier investments as compared to the Government of Singapore Investment Corp., which invests Singapore's foreign-exchange reserves, and in turn is expected to generate higher returns.
"While Temasek has performed better than many other large investors over this six-year market cycle, it is not realistic to expect it to outperform in every cycle," he said. "It is also not realistic to expect it to avoid losses on every individual investment, or losses on its overall portfolio when the markets go through sharp corrections."
This article is copyrighted by Ibtimes.com.au.
