http://www.bloomberg.com/news/2014-07-06/temasek-set-to-show-slower-asset-growth-on-banks-southeast-asia.html
Temasek Holdings Pte’s assets probably grew at a slower pace in the year to March because the value of some of its biggest financial assets declined.
Singapore’s state-owned investment company, which releases its annual review tomorrow, may have increased the value of its holdings by about 4 percent to a record S$224 billion ($180 billion) in the year to March 31, according to CIMB Research Pte and Institutional Investor’s Sovereign Wealth Center. That compares with an 8.6 percent gain in the previous year.
China Construction Bank Corp. (939) and Industrial & Commercial Bank of China Ltd., among the top four lenders in Temasek’s portfolio, declined as China’s economy heads for the weakest expansion in 24 years amid rising debt and a clampdown on shadow banking. Financial firms made up 31 percent of Temasek’s total holdings as of March 2013, according to the company.
“There was a tendency for sovereign funds to use banks as kind of a proxy exposure,” said Victoria Barbary, director at the London-based Institutional Investor’s Sovereign Wealth Center, which provides data on state investors. “They built up very big stakes in the Chinese banks, and it’s now going to be very difficult to divest that without making a loss.”
Temasek’s total shareholder return, which includes dividends, has averaged 16 percent in Singapore dollar terms through March 2013 since the firm’s inception 1974, according to its website. It had a negative return of 30 percent in the year ended March 2009, followed by gains of 42 percent and 4.6 percent gains respectively in the following two years. In the year ended March 2013, it posted a 9 percent increase.
Olam, Pavilion
Earlier in March, Temasek’s unit Breedens Investments Pte offered to take over Olam International Ltd. (OLAM) in a deal that valued one of the world’s top three coffee and rice traders at S$5.3 billion at the time. The offer closed on May 23 when Breedens said that it and related parties own or control 80 percent of Olam.
Temasek boosted its stake in the U.S. health-care industry in the first quarter. It bought 5.3 million shares in Thermo Fisher Scientific Inc., a manufacturer of scientific instruments and chemicals, directly or through its units, and 1.6 million shares in BioMarin Pharmaceutical Inc., a developer of therapeutic enzyme products, according to a May 15 filing with the U.S. Securities and Exchange Commission.
Temasek’s liquefied natural gas unit Pavilion Energy Pte said in November it will pay $1.3 billion for a 20 percent stake in three gas blocks off the shore of Tanzania in east Africa. It followed up with another acquisition in Africa in earlier this year, buying a stake in Nigerian closely held energy company Seven Energy International Ltd. for $150 million.
“Temasek stepped up its non-conventional investments in frontier markets like Africa and we might see more of that,” said Kelly Teoh, a Singapore-based managing director at consulting firm I.R. Resources. “However, for the foreseeable future, their portfolio will continue to be biased towards investments in Asia and Singapore.”
Temasek Holdings Pte’s assets probably grew at a slower pace in the year to March because the value of some of its biggest financial assets declined.
Singapore’s state-owned investment company, which releases its annual review tomorrow, may have increased the value of its holdings by about 4 percent to a record S$224 billion ($180 billion) in the year to March 31, according to CIMB Research Pte and Institutional Investor’s Sovereign Wealth Center. That compares with an 8.6 percent gain in the previous year.
China Construction Bank Corp. (939) and Industrial & Commercial Bank of China Ltd., among the top four lenders in Temasek’s portfolio, declined as China’s economy heads for the weakest expansion in 24 years amid rising debt and a clampdown on shadow banking. Financial firms made up 31 percent of Temasek’s total holdings as of March 2013, according to the company.
“There was a tendency for sovereign funds to use banks as kind of a proxy exposure,” said Victoria Barbary, director at the London-based Institutional Investor’s Sovereign Wealth Center, which provides data on state investors. “They built up very big stakes in the Chinese banks, and it’s now going to be very difficult to divest that without making a loss.”
Temasek’s total shareholder return, which includes dividends, has averaged 16 percent in Singapore dollar terms through March 2013 since the firm’s inception 1974, according to its website. It had a negative return of 30 percent in the year ended March 2009, followed by gains of 42 percent and 4.6 percent gains respectively in the following two years. In the year ended March 2013, it posted a 9 percent increase.
Olam, Pavilion
Earlier in March, Temasek’s unit Breedens Investments Pte offered to take over Olam International Ltd. (OLAM) in a deal that valued one of the world’s top three coffee and rice traders at S$5.3 billion at the time. The offer closed on May 23 when Breedens said that it and related parties own or control 80 percent of Olam.
Temasek boosted its stake in the U.S. health-care industry in the first quarter. It bought 5.3 million shares in Thermo Fisher Scientific Inc., a manufacturer of scientific instruments and chemicals, directly or through its units, and 1.6 million shares in BioMarin Pharmaceutical Inc., a developer of therapeutic enzyme products, according to a May 15 filing with the U.S. Securities and Exchange Commission.
Temasek’s liquefied natural gas unit Pavilion Energy Pte said in November it will pay $1.3 billion for a 20 percent stake in three gas blocks off the shore of Tanzania in east Africa. It followed up with another acquisition in Africa in earlier this year, buying a stake in Nigerian closely held energy company Seven Energy International Ltd. for $150 million.
“Temasek stepped up its non-conventional investments in frontier markets like Africa and we might see more of that,” said Kelly Teoh, a Singapore-based managing director at consulting firm I.R. Resources. “However, for the foreseeable future, their portfolio will continue to be biased towards investments in Asia and Singapore.”
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