The bull market tide goes out, leaving the lion city’s sovereign wealth firm gasping on the shore
Nearly five months after its March 31 year-end, Singaporeans should be eagerly looking forward to the publication of the report of the guardian of so much of the national wealth, Temasek Holdings. The sovereign wealth fund run by Ho Ching, wife of Prime Minister Lee Hsien Loong, is not the biggest repository of money collected by the state on behalf of the people, but it is at least semi-transparent compared with its big brother the Government Investment Corp.
The lengthy wait for results could possibly be connected to issues of how to treat a series of rather spectacular disasters that Temasek faced last year, and that are continuing into the current year.
Even in 2006-07, when world markets were booming in unison, Temasek had to report a 29 percent profit fall. Neither chairman S. Dhanabalan nor Ho Ching were on hand at the press conference when these dismal results were delivered. So who will deliver any bad news for the latest year?
Of course, the bottom line for the year to March 2008 may be saved by the sale just before year-end of power station Tuas Power to China’s Huaneng Group for S$4.2 billion which should enable it to book a hefty capital profit. But selling local assets and buying foreign ones may not be such a smart idea, particularly if you are the kind of Singapore bureaucrat who has implicit faith in the masters of the universe on Wall Street.
Under Ho Ching’s leadership Temasek had supposedly been taken from being a safety-first bureaucracy to a smart, profit-oriented outfit, selling some assets and investing heavily overseas, particularly in the fast-growing emerging markets of Asia and Latin America. Almost fool can make money in a global bull market so for awhile Temasek seemed to prosper under Ho Ching’s dynamic leadership. But Temasek also swallowed plenty of bait on offer from Wall Street types.
In particular the government-owned investment vehicle vastly expanded its finance sector portfolio, buying banks and even setting up a Special Purpose Vehicle, Astrea, which borrowed US$810 million to invest in a slew of private equity and buyout funds.
It is hard to imagine that Astrea has avoided the hammering suffered by almost all buyout and private equity funds, some of which have had to close with large losses.
But Temasek seems to have compounded bull market errors by continuing to have faith in Wall Street deceptions when memory of the Asian crisis and the Japanese experience should have made it particularly aware that financial-sector problems almost always go deeper and last longer than those in other sectors. Temasek was keen to show how important it was so was among the first to jump in with equity bail-outs for distressed western banks, firstly with US$5 billion for Merrill Lynch at $48 a share.
The Merill shares are now worth about half that, and although under the terms of the deal Temasek has been partially compensated with additional shares it has had to also to put in new money – and must wonder just how long and deep the US financial crisis will be. Although it had recently increased its stake in the UK’s Standard Chartered, it also put ₤1 billion into Britain’s Barclays, a financial institution whose equity base remains perilously small compared with the weight of assorted instruments it carries and whose share price has fallen much further since the Temasek injection.
But it is not just the finance sector and in the west that gung-Ho Temasek has hit rough waters. The Shin Corp mess in Thailand may now be a thing of the past. But troubles elsewhere are many. In Indonesia it is being required to sell off its stake in Bank International Indonesia (BII) because it already owns Bank Danamon. But Malaysia’s Bank Negara (central bank) has vetoed an attempt by Maybank to buy the BII stake. Bank Negara evidently agreed with opinion in the market that Maybank was offering a silly price.
The best piece of luck Temasek has had was actually evidence of its own willingness to pay top dollar. Only the myopic greed of shareholders in China Eastern Airlines and hopes of a counter offer from China National Aviation Corp thwarted a generous joint offer by Temasek and Singapore Airlines for a 24 percent stake in the Hong Kong-listed company at HK$3.8 a share. They now trade at HK$1.80.
Real estate is not looking too hot either. Last month CapitalLand (part of the Temasek group) had to promise to inject A$300 million into its ailing listed Australian 54 percent owned subsidiary Australand Property. Without a huge capital injection, deeply indebted Australand might have gone under.
Temasek has also leaped heavily into one of China’s highest profile, and perhaps more vulnerable, property developers, Country Garden. When it went public in Hong Kong in April 2007, Country Garden was the second largest IPO in Hong Kong history, with Temasek joining local tycoons Lee Shau Kee and Robert Kuok as key investors. According to the mainland financial magazine Caijing, a subsequent S$800 million convertible bond issue in Singapore in February this year was made on terms which suggest the company is very stretched and badly needs to keep its share price from falling. It is now little more than half its initial price and down 75 percent from its peak.
Australia, once seen as a safe if unexciting location for Singapore cash, has also attracted top of the market deals from Singapore Power. Already well-established in Australia, it paid heavily in cash for the eastern Australia assets of pipeline company Alinta but with values in decline they have been unable now to flip them into their 51 percent owned local subsidiary SP Ausnet leaving SP meanwhile saddled with huge borrowings.
Even on home ground, things are looking sick for important parts of the Temasek empire. Chartered Semiconductor Industries has seen its shares fall more than 40 percent and its debt ratings have been cut so that its bond are no longer investment grade – otherwise known as junk status. Chartered has long been a state effort to make Singapore a semiconductor manufacturing leader but has never managed to keep up with the likes of Taiwan and Korea in technology and now also faces Chinese competition.
These various problems have not entirely dulled Temasek’s appetite for acquisitions. Its associate Neptune Orient Lines (NOL) is bidding to buy Germany’s Hapag-Lloyd just at a time when some commentators forecast huge problems looming for container lines. This time Temasek may be saved by German nationalism – Hamburg business is ganging up to keep it in local hands.
It remains to be seen who, if anyone, takes responsibility for Temasek’s blunders. Last year it was chief investment officer Jimmy Phoon who found he had better things to do, as did Jackson Tai at DBS, Temasek’s main banking investment, and the finance director of SembCorp who had landed the group with US$300 million in foreign exchange losses.
Meanwhile US former food and consumer products executive Simon Israel, appointed two years ago, remains CEO in conjunction with Ho Ching. And, despite everything, faith in Wall Street types is as strong as ever – Michael Dee from Morgan Stanley was last week been appointed managing director for international investments.
from yahoo, share price now only A$0.56 ie 56 Aussie cents vs A$7.30 that Temasek paid.
i.e. A$371m went up in smoke?
now want to take it private and hope to recoup back slowly?
Share plunge could land ABC Learning in Temasek's hands
Roger Maynard Thu, Feb 28, 2008 The Straits Times
SYDNEY - TEMASEK Holdings could be poised to take control of Australia's largest childcare centre operator.
The Singapore investment company was rumoured to be interested in raising its stake in ABC Learning, after a 43 per cent slump in the Australian firm's share price on Tuesday.
Temasek already owns 12 per cent of ABC Learning.
ABC Learning founder and chief executive Eddy Groves, who has sold a big part of his own holding, ordered a stop to ABC Learning's trading on the Australian Stock Exchange yesterday after receiving 'indications of interest' for part of his business.
This raised the possibility that Temasek could become a majority shareholder in the company. If so, it would have the power to appoint its own management.
An Australian broker, who declined to be named, said Temasek was a 'likely suitor' for ABC Learning, said to be the largest listed childcare centre operator in the world.
Temasek refused to either confirm or deny it was a bidder, the Sydney Morning Herald reported.
ABC Learning's share price crashed by 70 per cent at one point but later recovered to close down 43 per cent after an earnings drop fuelled fears that the company might struggle to repay its debts.
Investors were concerned that ABC Learning, which has extensive interests in the United States, might suffer from a downturn in the American economy. There were also worries that the value of its 1,000 US childcare centres could drop as a result, and trigger a breach of its covenants on more than A$1 billion worth of loans.
ABC Learning reported a 42 per cent fall in its first-half profits late on Monday. The subsequent plunge in its share price knocked nearly A$270 million off the value of Temasek's investment.
Temasek paid A$402 million, or A$7.30 a share, for its 12 per cent stake in May last year. The stake is now worth A$123.6 million.
SINGAPORE, Aug 21 (Reuters) - Singapore sovereign wealth fund Temasek Holdings said on Thursday its assets rose 13 percent in the year to March 2008 and it was prepared to invest more money in Western banks if the opportunity arose.
"Growing with our blue chip companies and our direct investment activities, Temasek now owns a net portfolio of about S$185 billion at market value as at 31 March 2008," Chairman S Dhanabalan said in a speech to a group of Singapore entrepreneurs.
He added that the Singapore fund, which already owns large stakes in lenders such as Merrill Lynch and Barclays, would look at opportunities to buy more shares in Western banks.
Sovereign funds from Asia and the Middle East have pumped billions into Wall Street and European banks hit by losses from the U.S. mortage market, though banking stocks have slid this year amid writedowns on risky debt.
"Our total shareholder return measuring changes in shareholder funds, including dividends paid and excluding new capital, is a healthy 17 percent compounded annually since inception," Dhanabalan said.
Temasek said in its annual report for the financial year to March 2007 that its assets stood at S$164 billion. It will release its 2007/2008 annual report on Tuesday.
The Singapore government had injected a little under S$30 billion in assets and cash into Temasek since it was set up in 1974, Dhanabalan said.
Temasek, the smaller of Singapore's two wealth funds, has been seeking investments outside its core markets of Asia excluding Japan in search of higher returns and to diversify its portfolio.
In his address, Dhanabalan said Singapore and Asia account for nearly 75 percent of Temasek's investments, down from 78 percent reported a year earlier.
Dhanabalan said Temasek aims to have in the long run about one third of its assets in Singapore, another one third in emerging markets and the remainder in the developed markets.
It is recruiting staff for new offices in Mexico and Brazil that will be set up this year.
Temasek is also looking at Africa and the Middle East, and has asked a small number of staff to spend part of their time looking at potential investments in the region, a source familiar with the firm said.
Dhanabalan, who has been chairman of Temasek since September 1996, is a former Cabinet minister who once helmed the city-state's trade & industry and national development ministries.
(SINGAPORE) Just a month after it injected an additional US$900 million in US securities firm Merrill Lynch, Singapore's Temasek Holdings has indicated that it may raise its stake even further in the troubled bank.
The investment company's chairman S Dhanabalan said yesterday that it would be willing to look at the possible opportunities to do so, but 'whether we do it depends on our assessment and risk diversification'.
The 71-year-old chairman was speaking to 175 business leaders at a Raffles Hotel luncheon organised by Talent ideas Enterprise, a non-profit organisation that promotes entrepreneurship.
Last December, Temasek paid US$5 billion for a stake in Merrill. Giving a deeper insight into the considerations leading up to the deal, Mr Dhanabalan said: 'We saw an institution that had good management, good business. We thought the price was attractive, but we also knew that it was very likely it would go below what we invested. But we look at it (for a period) of 5-7 years.'
Merrill's shares have dipped 55 per cent since last Christmas Eve, the day it announced Temasek's purchase of about 5 per cent of its stock.
In his speech, Mr Dhanabalan also revealed that Temasek's assets had increased to $185 billion at the end of March this year, 13 per cent higher from a year earlier.
'Growing with our blue- chip companies and our direct investment activities, Temasek now owns a net portfolio of about $185 billion at market value as at March 31, 2008,' he said.
These latest figures come ahead of Temasek's anticipated release of its annual report next Tuesday.
Mr Dhanabalan said that Singapore and Asia make up about 75 per cent of Temasek's investments, down slightly from 78 per cent a year ago.
Looking ahead, he said that Temasek's growth outside Singapore 'will be higher', meaning the proportion of investments here will inevitably shrink.
Of late, Temasek has been venturing into markets outside of Asia, excluding Japan, in a bid to seek higher returns and diversify its portfolio.
Besides the heavy investments in Merrill and Barclays, Temasek is also busy hiring for its new offices in Brazil and Mexico.
Temasek's original breakdown in terms of geography has been one third Singapore, one third Asia, and one third in the developed markets.
But Mr Dhanabalan explained that the ratios alone do not drive Temasek's investments.
'We are very opportunistic. We don't say we need to have so much in this market, so let's go invest. If the opportunity arises, we go and invest. We have no prior sort of proportion that we must invest in Brazil or Mexico,' he said.
Mr Dhanabalan also took the opportunity to once again reiterate Temasek's stance that it is an atypical sovereign wealth fund in that it owns its assets and is not a fund manager like most other SWFs.
Describing Temasek as an institution that 'often finds itself drawn unwittingly into this controversy', he said that while Temasek is seen as the 'gold standard', it still risks collateral damage from any backlash against SWFs in general.
The controversy surrounding these funds stems from how they have significantly increased their influence on global markets in recent years. UK-based research organisation IFSL says assets under the management of SWFs increased 18 per cent last year to hit US$3.3 trillion. This is likely to exceed US$10 trillion by 2015, it said.
'When the investor is government-linked, no matter how tenuously, the scrutiny is magnified manifold. A world of more restricted trade and capital flows is not good for Temasek and Singapore, nor for the world,' said Mr Dhanabalan.
4 comments:
Singapore’s Temasek Courts Disaster
Asia Sentinel
18 August 2008
The bull market tide goes out, leaving the lion city’s sovereign wealth firm gasping on the shore
Nearly five months after its March 31 year-end, Singaporeans should be eagerly looking forward to the publication of the report of the guardian of so much of the national wealth, Temasek Holdings. The sovereign wealth fund run by Ho Ching, wife of Prime Minister Lee Hsien Loong, is not the biggest repository of money collected by the state on behalf of the people, but it is at least semi-transparent compared with its big brother the Government Investment Corp.
The lengthy wait for results could possibly be connected to issues of how to treat a series of rather spectacular disasters that Temasek faced last year, and that are continuing into the current year.
Even in 2006-07, when world markets were booming in unison, Temasek had to report a 29 percent profit fall. Neither chairman S. Dhanabalan nor Ho Ching were on hand at the press conference when these dismal results were delivered. So who will deliver any bad news for the latest year?
Of course, the bottom line for the year to March 2008 may be saved by the sale just before year-end of power station Tuas Power to China’s Huaneng Group for S$4.2 billion which should enable it to book a hefty capital profit. But selling local assets and buying foreign ones may not be such a smart idea, particularly if you are the kind of Singapore bureaucrat who has implicit faith in the masters of the universe on Wall Street.
Under Ho Ching’s leadership Temasek had supposedly been taken from being a safety-first bureaucracy to a smart, profit-oriented outfit, selling some assets and investing heavily overseas, particularly in the fast-growing emerging markets of Asia and Latin America. Almost fool can make money in a global bull market so for awhile Temasek seemed to prosper under Ho Ching’s dynamic leadership. But Temasek also swallowed plenty of bait on offer from Wall Street types.
In particular the government-owned investment vehicle vastly expanded its finance sector portfolio, buying banks and even setting up a Special Purpose Vehicle, Astrea, which borrowed US$810 million to invest in a slew of private equity and buyout funds.
It is hard to imagine that Astrea has avoided the hammering suffered by almost all buyout and private equity funds, some of which have had to close with large losses.
But Temasek seems to have compounded bull market errors by continuing to have faith in Wall Street deceptions when memory of the Asian crisis and the Japanese experience should have made it particularly aware that financial-sector problems almost always go deeper and last longer than those in other sectors. Temasek was keen to show how important it was so was among the first to jump in with equity bail-outs for distressed western banks, firstly with US$5 billion for Merrill Lynch at $48 a share.
The Merill shares are now worth about half that, and although under the terms of the deal Temasek has been partially compensated with additional shares it has had to also to put in new money – and must wonder just how long and deep the US financial crisis will be. Although it had recently increased its stake in the UK’s Standard Chartered, it also put ₤1 billion into Britain’s Barclays, a financial institution whose equity base remains perilously small compared with the weight of assorted instruments it carries and whose share price has fallen much further since the Temasek injection.
But it is not just the finance sector and in the west that gung-Ho Temasek has hit rough waters. The Shin Corp mess in Thailand may now be a thing of the past. But troubles elsewhere are many. In Indonesia it is being required to sell off its stake in Bank International Indonesia (BII) because it already owns Bank Danamon. But Malaysia’s Bank Negara (central bank) has vetoed an attempt by Maybank to buy the BII stake. Bank Negara evidently agreed with opinion in the market that Maybank was offering a silly price.
The best piece of luck Temasek has had was actually evidence of its own willingness to pay top dollar. Only the myopic greed of shareholders in China Eastern Airlines and hopes of a counter offer from China National Aviation Corp thwarted a generous joint offer by Temasek and Singapore Airlines for a 24 percent stake in the Hong Kong-listed company at HK$3.8 a share. They now trade at HK$1.80.
Real estate is not looking too hot either. Last month CapitalLand (part of the Temasek group) had to promise to inject A$300 million into its ailing listed Australian 54 percent owned subsidiary Australand Property. Without a huge capital injection, deeply indebted Australand might have gone under.
Temasek has also leaped heavily into one of China’s highest profile, and perhaps more vulnerable, property developers, Country Garden. When it went public in Hong Kong in April 2007, Country Garden was the second largest IPO in Hong Kong history, with Temasek joining local tycoons Lee Shau Kee and Robert Kuok as key investors. According to the mainland financial magazine Caijing, a subsequent S$800 million convertible bond issue in Singapore in February this year was made on terms which suggest the company is very stretched and badly needs to keep its share price from falling. It is now little more than half its initial price and down 75 percent from its peak.
Australia, once seen as a safe if unexciting location for Singapore cash, has also attracted top of the market deals from Singapore Power. Already well-established in Australia, it paid heavily in cash for the eastern Australia assets of pipeline company Alinta but with values in decline they have been unable now to flip them into their 51 percent owned local subsidiary SP Ausnet leaving SP meanwhile saddled with huge borrowings.
Even on home ground, things are looking sick for important parts of the Temasek empire. Chartered Semiconductor Industries has seen its shares fall more than 40 percent and its debt ratings have been cut so that its bond are no longer investment grade – otherwise known as junk status. Chartered has long been a state effort to make Singapore a semiconductor manufacturing leader but has never managed to keep up with the likes of Taiwan and Korea in technology and now also faces Chinese competition.
These various problems have not entirely dulled Temasek’s appetite for acquisitions. Its associate Neptune Orient Lines (NOL) is bidding to buy Germany’s Hapag-Lloyd just at a time when some commentators forecast huge problems looming for container lines. This time Temasek may be saved by German nationalism – Hamburg business is ganging up to keep it in local hands.
It remains to be seen who, if anyone, takes responsibility for Temasek’s blunders. Last year it was chief investment officer Jimmy Phoon who found he had better things to do, as did Jackson Tai at DBS, Temasek’s main banking investment, and the finance director of SembCorp who had landed the group with US$300 million in foreign exchange losses.
Meanwhile US former food and consumer products executive Simon Israel, appointed two years ago, remains CEO in conjunction with Ho Ching. And, despite everything, faith in Wall Street types is as strong as ever – Michael Dee from Morgan Stanley was last week been appointed managing director for international investments.
posting some extracts here:
no choice have to average down?
from yahoo, share price now only A$0.56 ie 56 Aussie cents vs A$7.30 that Temasek paid.
i.e. A$371m went up in smoke?
now want to take it private and hope to recoup back slowly?
Share plunge could land ABC Learning in Temasek's hands
Roger Maynard
Thu, Feb 28, 2008
The Straits Times
SYDNEY - TEMASEK Holdings could be poised to take control of Australia's largest childcare centre operator.
The Singapore investment company was rumoured to be interested in raising its stake in ABC Learning, after a 43 per cent slump in the Australian firm's share price on Tuesday.
Temasek already owns 12 per cent of ABC Learning.
ABC Learning founder and chief executive Eddy Groves, who has sold a big part of his own holding, ordered a stop to ABC Learning's trading on the Australian Stock Exchange yesterday after receiving 'indications of interest' for part of his business.
This raised the possibility that Temasek could become a majority shareholder in the company. If so, it would have the power to appoint its own management.
An Australian broker, who declined to be named, said Temasek was a 'likely suitor' for ABC Learning, said to be the largest listed childcare centre operator in the world.
Temasek refused to either confirm or deny it was a bidder, the Sydney Morning Herald reported.
ABC Learning's share price crashed by 70 per cent at one point but later recovered to close down 43 per cent after an earnings drop fuelled fears that the company might struggle to repay its debts.
Investors were concerned that ABC Learning, which has extensive interests in the United States, might suffer from a downturn in the American economy. There were also worries that the value of its 1,000 US childcare centres could drop as a result, and trigger a breach of its covenants on more than A$1 billion worth of loans.
ABC Learning reported a 42 per cent fall in its first-half profits late on Monday. The subsequent plunge in its share price knocked nearly A$270 million off the value of Temasek's investment.
Temasek paid A$402 million, or A$7.30 a share, for its 12 per cent stake in May last year. The stake is now worth A$123.6 million.
Temasek says assets up 13 pct, eyes Western banks
By Kevin Lim and Saeed Azhar
SINGAPORE, Aug 21 (Reuters) - Singapore sovereign wealth fund Temasek Holdings said on Thursday its assets rose 13 percent in the year to March 2008 and it was prepared to invest more money in Western banks if the opportunity arose.
"Growing with our blue chip companies and our direct investment activities, Temasek now owns a net portfolio of about S$185 billion at market value as at 31 March 2008," Chairman S Dhanabalan said in a speech to a group of Singapore entrepreneurs.
He added that the Singapore fund, which already owns large stakes in lenders such as Merrill Lynch and Barclays, would look at opportunities to buy more shares in Western banks.
Sovereign funds from Asia and the Middle East have pumped billions into Wall Street and European banks hit by losses from the U.S. mortage market, though banking stocks have slid this year amid writedowns on risky debt.
"Our total shareholder return measuring changes in shareholder funds, including dividends paid and excluding new capital, is a healthy 17 percent compounded annually since inception," Dhanabalan said.
Temasek said in its annual report for the financial year to March 2007 that its assets stood at S$164 billion. It will release its 2007/2008 annual report on Tuesday.
The Singapore government had injected a little under S$30 billion in assets and cash into Temasek since it was set up in 1974, Dhanabalan said.
Temasek, the smaller of Singapore's two wealth funds, has been seeking investments outside its core markets of Asia excluding Japan in search of higher returns and to diversify its portfolio.
In his address, Dhanabalan said Singapore and Asia account for nearly 75 percent of Temasek's investments, down from 78 percent reported a year earlier.
Dhanabalan said Temasek aims to have in the long run about one third of its assets in Singapore, another one third in emerging markets and the remainder in the developed markets.
It is recruiting staff for new offices in Mexico and Brazil that will be set up this year.
Temasek is also looking at Africa and the Middle East, and has asked a small number of staff to spend part of their time looking at potential investments in the region, a source familiar with the firm said.
Dhanabalan, who has been chairman of Temasek since September 1996, is a former Cabinet minister who once helmed the city-state's trade & industry and national development ministries.
Temasek willing to pump more into Merrill Lynch
By LEE U-WEN
August 22, 2008
(SINGAPORE) Just a month after it injected an additional US$900 million in US securities firm Merrill Lynch, Singapore's Temasek Holdings has indicated that it may raise its stake even further in the troubled bank.
The investment company's chairman S Dhanabalan said yesterday that it would be willing to look at the possible opportunities to do so, but 'whether we do it depends on our assessment and risk diversification'.
The 71-year-old chairman was speaking to 175 business leaders at a Raffles Hotel luncheon organised by Talent ideas Enterprise, a non-profit organisation that promotes entrepreneurship.
Last December, Temasek paid US$5 billion for a stake in Merrill. Giving a deeper insight into the considerations leading up to the deal, Mr Dhanabalan said: 'We saw an institution that had good management, good business. We thought the price was attractive, but we also knew that it was very likely it would go below what we invested. But we look at it (for a period) of 5-7 years.'
Merrill's shares have dipped 55 per cent since last Christmas Eve, the day it announced Temasek's purchase of about 5 per cent of its stock.
In his speech, Mr Dhanabalan also revealed that Temasek's assets had increased to $185 billion at the end of March this year, 13 per cent higher from a year earlier.
'Growing with our blue- chip companies and our direct investment activities, Temasek now owns a net portfolio of about $185 billion at market value as at March 31, 2008,' he said.
These latest figures come ahead of Temasek's anticipated release of its annual report next Tuesday.
Mr Dhanabalan said that Singapore and Asia make up about 75 per cent of Temasek's investments, down slightly from 78 per cent a year ago.
Looking ahead, he said that Temasek's growth outside Singapore 'will be higher', meaning the proportion of investments here will inevitably shrink.
Of late, Temasek has been venturing into markets outside of Asia, excluding Japan, in a bid to seek higher returns and diversify its portfolio.
Besides the heavy investments in Merrill and Barclays, Temasek is also busy hiring for its new offices in Brazil and Mexico.
Temasek's original breakdown in terms of geography has been one third Singapore, one third Asia, and one third in the developed markets.
But Mr Dhanabalan explained that the ratios alone do not drive Temasek's investments.
'We are very opportunistic. We don't say we need to have so much in this market, so let's go invest. If the opportunity arises, we go and invest. We have no prior sort of proportion that we must invest in Brazil or Mexico,' he said.
Mr Dhanabalan also took the opportunity to once again reiterate Temasek's stance that it is an atypical sovereign wealth fund in that it owns its assets and is not a fund manager like most other SWFs.
Describing Temasek as an institution that 'often finds itself drawn unwittingly into this controversy', he said that while Temasek is seen as the 'gold standard', it still risks collateral damage from any backlash against SWFs in general.
The controversy surrounding these funds stems from how they have significantly increased their influence on global markets in recent years. UK-based research organisation IFSL says assets under the management of SWFs increased 18 per cent last year to hit US$3.3 trillion. This is likely to exceed US$10 trillion by 2015, it said.
'When the investor is government-linked, no matter how tenuously, the scrutiny is magnified manifold. A world of more restricted trade and capital flows is not good for Temasek and Singapore, nor for the world,' said Mr Dhanabalan.
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