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.