Temasek may need US$14b for Asian investments: Analyst
Temasek may need US$14b for Asian investments: Analyst
Chan Sue Ling, Bloomberg, Singapore
Temasek Holdings Pte may have to invest as much as S$24 billion (US$14 billion) outside of Singapore to achieve its aim of having one-third of its portfolio in Asia, Citigroup Inc.'s Smith Barney unit said in a report.
Temasek, a Singapore government investment agency, has more than half of its assets worth S$90 billion in Singapore, 17 percent in other Asian countries, and 31 percent in members of the Organization for Economic Cooperation and Development, according to its first annual report that was released last week.
Temasek, which wants one-third of investments in each of those areas, has invested S$3.3 billion in 35 companies at home and abroad in the past two years, including a 53 percent stake in Bank Danamon Indonesia and a 28 percent stake in Bank Internasional Indonesia.
"Temasek would have to invest up to S$24 billion outside of Singapore or an investment rate of S$2.4 billion per annum over the next 10 years," to increase its exposure in Asia, excluding Singapore, Lim Jit Soon, an analyst at Smith Barney, wrote in a note published on Monday.
Lim's estimates assumed a compound annual growth rate of 5 percent a year over the next 10 years. Temasek said in its annual report that its shareholder returns averaged 3 percent every year over the past decade.
Temasek declined to comment on the report.
Lim said that changes at Singapore Technologies Pte last week may lead to a reorganization of companies in which Temasek has stakes, including Keppel Corp. or SembCorp Industries Ltd.
Temasek last week said it's taking over most of the assets and shareholdings of its wholly owned subsidiary, Singapore Technologies Pte. Temasek will directly oversee the unit's interest in companies such as SembCorp Industries.
The changes "could involve Keppel and SCI merging, a move which would enhance the combined group's strength in offshore and marine and infrastructure activities," Lim said in the note.
The state-owned company has controlling stakes in seven of the island's 10 biggest listed companies. It has also identified the need to improve the returns and focus of Keppel, Southeast Asia's biggest marine-engineering company, Singapore Technologies Engineering Ltd., the region's biggest defense company, national carrier Singapore Airlines Ltd., shipping company Neptune Orient Lines Ltd. and container terminal operator PSA International Ltd.
His report also suggested a possible merger between StarHub Ltd., Singapore's second-largest telephone company, and rival MobileOne Ltd. Singapore Technologies Telemedia Pte, a unit of Temasek, holds a 60 percent stake in Starhub.