Temasek wants to invest more than $1.8B

October 23, 2009
Singapore Democrats

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Costas Paris
Dow Jones Newswires

Singapore’s state-owned investment fund Temasek Holdings Pte. Ltd. wants to invest more than US$1.8 billion in the next few months, with a focus on China, India, Mexico and Brazil, people familiar with the situation said.

Investment teams are currently approaching Temasek with proposals on how the money might be put to work, one of those people told Dow Jones Newswires, adding that the amount to be invested could grow if a major opportunity comes along.

The investment drive will be led by Temasek’s Chief Executive Ho Ching. People familiar with the situation said Temasek isn’t actively searching for a new CEO to replace Ms. Ho, who has stayed on to continue running the fund after the surprise announcement in July that CEO-designate Charles “Chip” W. Goodyear, the former head of BHP Billiton, was resigning before taking up his post in October.

Those people said Mr. Goodyear encountered difficulties carrying out significant changes in the way Temasek worked and invested. Temasek attributed Mr. Goodyear’s departure at the time to strategic differences.

Ms. Ho is married to Singapore Prime Minister Li Hsien Loong.

Temasek’s new interest in investing comes as the value of its investment portfolio so far this year has recovered much of the ground it lost in 2008, when it fell 30%. Signs of a global economic recovery are mounting and market volatility has declined.

Temasek executives have said they are interested in investment opportunities that offer exposure to the long-term growth of consumer spending in Asia, especially China and India.

Late last year and early in 2009, Temasek suffered hundreds of millions of dollars in losses after exiting its investments in Western banks before global financial markets had begun to recover. Around the same time, it began a rebalancing of its portfolio that brought more of its money closer to home in Asia.

In China, Temasek already owns a 6% stake in China Construction Bank Corp. and a 4% in Bank of China Ltd. It has tried to invest in China’s airline industry, but a deal for Temasek and its unit Singapore Airlines Ltd. to pay $923 million for a 24% stake in China Eastern Airlines Corp. Ltd. fell through last year when China Eastern shareholders rejected the offer in hopes of a higher bid from Air China that never materialized.

Singapore Airliners is eager to restart talks with China Eastern if Beijing were to support foreign investment in the carrier, one of the people said.

In India, Temasek owns stakes in Tata Teleservices, conglomerate Mahindra & Mahindra, ICICI Bank, Bharti Airtel and logistics company Gateway Ditriparks. Manish Kejriwal, Temasek’s senior managing director, investment, international & India, said Temasek believes opportunities in consumer-oriented businesses and infrastructure in India “will lead to emergence of champions that are excellent proxies for economic growth.”

Temasek’s holdings also include major stakes in a cross-section of Singapore blue-chip companies. It has raised those stakes by subscribing to rights issues in a number of those companies that have turned out to be profitable.