Singapore’s sovereign wealth funds, Temasek Holdings and the Government of Singapore Investment Corp (GIC), have suffered some losses in their foreign investments due to the world financial meltdown last year.
“Investments by GIC and Temasek have inevitably been affected, like those of other global investors,” Finance Minister Tharman Shanmugaratnam said in Parliament today.
However, he said, their overall value had fallen by less than the decline in global equity markets, as they maintained diversified portfolios and had taken precautionary actions early in the crisis to reduce their exposures to the equity markets.
The minister was replying to a question by a member of Parliament who asked what was the extent of losses, paper or realised suffered by GIC and Temasek arising from the financial meltdown in the US last year and other related events worldwide.
Saying the challenging situation that global investors faced then still remained, the minister said the MSCI (Morgan Stanley Capital International) World (Equities) had declined by 42 percent in end of December last year, slightly worse than the 40 percent decline as at end of October 2008.
Tharman said GIC and Temasek’s strategies of investing on a diversified basis for the long term and maintaining sound governance and risk management practices enabled them to ride through market cycles including severe market declines such as in the current global crisis.
“These strategies also put them in a position to take advantage of any opportunities that may arise from the current downturn,” he said.
GIC and Temasek had spent several billion dollars last year buying into equities of global financial institutions such as UBS AG, Citigroup and Merrill Lynch prior to the world financial meltdown.