Temasek, the parent of Singapore Technologies Telemedia (STT) which is poised to take over Eircom, recovered from most of its portfolio losses this year as markets rallied, giving it firepower for new deals.
Chief executive Ho Ching said any dip in markets could be a buying opportunity for the $122bn (€83bn) investment firm that is still open to buying financials and investing in emerging markets.
Temasek, which has telecoms investments across the globe, lost over an estimated $4bn on selling its stakes in Bank of America and Barclays, but said it had benefited from investing in rights issues for its portfolio firms such as Standard Chartered, since these investments more than doubled by the end of July.
“We are in a very good cash position,” Ms Ho said at Temasek’s annual review yesterday. “We think there are lots of opportunities in (China and India) over the long term.”
The review showed Temasek’s portfolio slumped S$55bn or around 30pc to S$130bn in the year to end-March. Its portfolio then rose 32pc to S$172bn by end-July, and its August performance was in line with market indexes, Ms Ho said.
The firm’s value-at-risk was S$28bn at the end of March, meaning it had a 16pc probability it would lose that amount or more this financial year, down from a value-at-risk of S$40bn a year earlier, the review said.
“We believe the worst of the global meltdown risks are behind us,” said Ms Ho. “While there are some green shoots of growth, some structural risks still remain for the medium term,” she said.
Temasek is Singapore’s second biggest sovereign wealth fund after the Government of Singapore Investment Corp.
Ms Ho, the wife of Singapore’s prime minister, said Temasek’s board would still search for her successor after chief executive-designate and former BHP Billiton chief Chip Goodyear unexpectedly resigned in July over strategic differences.
The investment company, whose sole shareholder is Singapore’s Ministry of Finance, said net profit for the financial year fell two-thirds to S$6.2bn, as it was hit by losses on financial stocks and lower contributions from earnings by its portfolio firms, like DBS Group.
“Like investors everywhere they’re just relieved that the market pulled back from the brink,” said David Cohen of Action Economics in Singapore.
Eircom is preparing for its fifth change of ownership since its flotation to STT.
Eircom’s parent company, Australian fund Eircom Holdings, has recommended shareholders accept the AU$225m (€133m) cash and shares offer made by STT.
The deal involves the transfer of the entire share issue of ERC to the new entity called Emerald Communications SPC and values the firm at just over €132.5m.