Temasek Holdings

Temasek Holdings

Type	Sovereign wealth fund
Founded	1975
Headquarters	Singapore
Key people	S Dhanabalan, Chairman Ho Ching, CEO Chip Goodyear, CEO Designate
Industry	Investment services
Products	N/A
Revenue	▲ $83.284 billion SGD (2008)
Net income	▲ $22.474 billion SGD (2008)
Total assets	▲ $185 billion SGD (2008)
Website	www.temasekholdings.com.sg

Temasek Holdings is an investment company owned by the government of Singapore. With an international staff of 350 people, it manages a portfolio of about S$185 billion, or more than US$127 billion, focused primarily in Asia. It is an active shareholder and investor in such sectors as banking & financial services, real estate, transportation & logistics, infrastructure, telecommunications & media, bioscience & healthcare, education, consumer & lifestyle, engineering & technology, as well as energy & resources. Temasek is one of a few global firms with the highest corporate credit ratings by both Standard & Poor's and Moody's, of AAA/Aaa respectively.^[1]

In addition, the Government of Singapore has another investment arm, the Government Investment Corporation (GIC), which invests primarily the country's foreign reserves.

Contents 1 History 2 Management 2.1 Board of Directors 2.2 Senior Management 3 Investments 4 Earnings & Losses 4.1 2004 4.2 2008 4.3 2009 5 Controversy 6 See also 7 References 8 External links

History

In the early 1960s, the Singapore government took stakes in a variety of local companies, in sectors such as manufacturing and shipbuilding. Prior to the incorporation of Temasek Holdings in 1974, these stakes were held by the Ministry of Finance (the Ministry remains Temasek's sole shareholder). Its initial portfolio was just over US$100 million.

In Jan 2008, The Economist reported that Morgan Stanley had estimated the fund's assets at US$159.2 billion^[2].

On 5 March 2008, Simon Israel, Temasek Holdings’ executive director, appeared in the US House of Representatives before a joint sub-committee of the House Financial Services Committee in a hearing related to foreign government investments in the United States^[3].

On 21 March 2008, the company declared that it is strictly not a sovereign wealth fund, as it "has to sell assets to raise cash for new investments and doesn't require the government to give approvals". Since it already meets disclosure guidelines and provides more details than sovereign wealth funds, Temasek says it was excluded from an agreement between United States Treasury and the government-run funds of Abu Dhabi Investment Authority and Government of Singapore Investment Corporation (GIC) to assuage US concerns on transparency and non-politicization of investments^[4].

Management

In January 2002, Ho Ching joined Temasek as a Director; subsequently she was appointed Executive Director in May 2002, and Executive Director & CEO in January 2004. She is the second wife of Prime Minister Lee Hsien Loong and daughter in law of 86-year old Lee Kuan Yew.

On 6 February 2009, Temasek announced the appointment of Charles W. "Chip" Goodyear as a Member of its Board and CEO-Designate, to commence on 1 March, succeeding Ho Ching, who will step down on 1 October 2009^[5].

Board of Directors

• Chairman of the Board: S Dhanabalan
• Deputy Chairman of the Board and Chairman Exxon Mobil Asia Pacific: Kwa Chong Seng
• Executive Director and CEO: Ho Ching
• Executive Director and Chairman Asia Pacific Breweries: Simon Israel
• Chairman DBS Group Holdings: Koh Boon Hwee
• Managing Director and Group CEO, ComfortDelGro: Kua Hong Pak
• Managing Director of GK Goh Holdings Ltd: Goh Yew Lin
• Permanent Secretary, Ministry of Finance: Teo Ming Kian
• Chairman, SEB, SAAB AB, Electrolux, Deputy Chairman, Ericsson: Marcus Wallenberg

Senior Management

• Chief Strategist: Charles Ong
• Corporate Development & Special Projects: Cheo Hock Kuan
• Chief Investment Officer: Tow Heng Tan
• Co-Chief Investment Officer: Gan Chee Yen
• International & Strategic Relations: Goh Yong Siang
• Special Projects: Hiew Yoon Khong
• Strategy: Jimmy Phoon
• Corporate Development & Chief Financial Officer: Leong Wai Leng
• Investment, International & India: Manish Kejriwal
• International: Michael Dee
• Corporate Development, Portfolio Management & Systems: Ng Yat Chung

Investments

Main article: Temasek Holdings' investments

As of 2004, it owns stakes in many large foreign companies, including Standard Chartered, Bank of America, Merrill Lynch, China Construction Bank, Global Crossing, as well as many of Singapore's largest companies, such as SingTel, DBS Bank, Singapore Airlines, PSA International, SMRT Corporation, Singapore Power and Neptune Orient Lines. It also holds investments in public icons like the Raffles Hotel and the Singapore Zoo. It also holds a stake in Singapore Pools, the only legal betting company in Singapore. On October 14, 2004, it announced that it was closing the operational headquarters of ST Engineering and transferring the latter's assets to itself.

About half of its managed assets are external to Singapore and Temasek-linked companies (TLCs) also hold an extensive global portfolio, such as SingTel's ownership of Australian telco Optus, and Singapore Airlines' 49% stake in Virgin Atlantic.

Although 75% of Temasek's holdings is in Singapore, it has set a target of eventually reducing this to only one-third. Another one-third will be in developed markets and the final third is planned for investment in developing economies.

Earnings & Losses

Temasek Holdings's total shareholder return since inception more than 30 years ago is more than 18% compounded annually.^[6]

2004

• To satisfy the legal requirements in issuing bonds to raise money from the public, Temasek reported its accounts to the public for the first time in its 30-year history on October 12, 2004. Net profit was S$7.4 billion (US$4.4 billion) on revenues of S$56.5 billion for the financial year closing on March 2004. Its 2003 profit was S$241 million on revenues of S$49.65 billion in the previous financial year, while its 2002 profit was S$4.92 billion on revenues of S$42.56 billion.
• The 2004 report states that Temasek manages S$90 billion in assets. This represents an average total shareholder return of 18% year-on-year since 1974. Temasek Holdings has increased transparency over the years, opening its books in 2005. Standard & Poor's assigned Temasek Holdings a AAA credit rating for "the best companies". At the time of this report, the various Temasek holdings linked companies held one-third of Singapore's stock market capitalization between them.

2008

• In 2008, Temasek Holdings achieved a net profit of S$22.474 billion (about US$15 billion) on revenues of S$83.284 billion (about US$55 billion).

• In 2008, Temasek Holdings sold off half its investment in Merrill Lynch - or about 87m shares, according to a Mutual Fund Facts About Individual Stocks (MFFAIS) report on institutional trades on US stocks.^[7] Temasek would have suffered a loss of $17 a share - or a total loss of about US$1.48b for the 87mil shares. Temasek did not confirm or deny the MFFAIS report.

• In December 2008, Temasek Holdings sold its 70 percent stake in Singapore Food Industries Ltd., which operates food outlets in factories, hospitals and army camps, for S$334.5 million ($221 million). It also divested Singapore power generator PowerSeraya Ltd. for about S$3.6 billion. Temasek defended its $2.6 billion of divestments, saying the transactions created value for the Singapore sovereign investor and the assets weren’t sold to cover losses on past investments or fund future purchases. ^[8]

2009

• According to the Faber report, Temasek Holdings lost S4.6 billion on a $5.9 billion investment in Bank of America, the largest loss in a single investment that has ever been sustained by any sovereign wealth fund (SWF) anywhere in the world. This has been described by the Singapore government as a 'small setback' because Temasek's investment strategy was for the 'long term', thus viewing this present loss as a 'temporary' state of affairs.

• On February 10 2009, Temasek Holdings said that the value of its investment portfolio fell by 31 percent of its total, or about $39 billion, from March to November last year.^[9]

• On May 15 2009, Temasek Holdings sold its 3.8 percent stake in Bank of America Corp. at a loss that may total $4.6 billion, as the Singapore state-owned fund shifts bets from Wall Street to emerging markets.^[10]

• On June 3 2009, Temasek Holdings sold its entire stake in British lender Barclays Plc. and booked a loss of around $1 billion.^[11]

Controversy

Temasek is an arm of the Singapore government and owned 100% by the Ministry of Finance, and these close links to the government have on several occasions caused protests in foreign countries.

When ST Telmedia, a TLC, took a significant stake in Indonesian Indosat, workers went on strike to protest working for Singapore. In 2003, when ST Telemedia acquired a two-third share of computer networking telco Global Crossing, the acquisition had to be approved by the U.S. government to ensure a foreign government did not control the extensive network. Moreover, it is said that Temasek has been trying to take control of major competitors in other countries for the sake of Singapore's economy.

Main article: Thaksin Shinawatra $1.88 billion deal controversy

Temasek's 2006 acquisition of Shin Corporation, owned by the family of then Thai prime minister Thaksin Shinawatra, was particularly controversial, with protestors burning effigies of Lee and Ho in the streets of Bangkok.^[12] The deal was a factor in exacerbating the Thai political crisis, which eventually led to the downfall of Thaksin and a review of the transaction's legality. The military junta that overthrew Thaksin later forced Temasek to divest the majority of its investment in Shin Corp.^[13]

Temasek is cited by journalist Eric Ellis as being central to the Singaporean support for the Burmese military dictatorship.^[14] However, Singapore's High Commissioner to Australia has issued a response denying these claims.^[15]

See also

• Government of Singapore Investment Corporation

References

External links

• Temasek Holdings
• Singapore: Government-linked corporations face the future. Embassy of the United States, Singapore. March 2001
• Singapore: Buy High, Sell Low II Asia Sentinel 5 June 2009
• Temasek’s Investment in Barclays–A Lesson in Bad Timing The Wall Street Journal 4 June 2009
• Temasek’s portfolio significantly underperforms regional markets SG Politics 4 June 2009