UPDATE 2-Temasek eyes food, energy after portfolio slump

miércoles 29 de julio de 2009 11:17 CEST
 

 * Portfolio fell over a fifth in year to March 2009
 * Temasek sees opportunities in Latin America, food, energy
 * Temasek looking for internal, external CEO candidates
 * CEO says staff bonuses to be cut again this year
 (Adds detail on portfolio loss, bonuses, fund manager comment)
 By Saeed Azhar and Kevin Lim
 SINGAPORE, July 29 (Reuters) - Singapore state investor
Temasek said its portfolio slid by at least $27 billion, or
more than a fifth, in the year to March but it will stick with
banks and sees opportunities in food and energy.
 The fund saw potential in Asia and Latin America and was
comfortable with financial services as its core portfolio
holding, despite being hurt by losses on high-profile
investments in Western banks after the market meltdown last
year, CEO Ho Ching said on Wednesday.
 "At this point, we are still comfortable with the financial
sector as a core sector that reflects the key economies we are
interested in," Ho said at a seminar.
 She acknowledged, however, that the increased regulation of
the financial sector may result in the rate of returns falling.
 "In terms of sectors specifically, we are agnostic, we
don't have a sectoral target," she said, adding the fund would
look at food and energy, but did not give further details.
 Sovereign wealth funds from Asia and the Middle East drew
attention and some criticism after investing billions in
Western banks at the start of the credit crisis. Despite big
losses since, the funds are still seen as a potential source of
capital.
 Temasek [TEM.UL] suffered an estimated loss of over $4
billion when it sold its stakes in Bank of America (BAC.N: Cotización) and
Barclays (BAC.N: Cotización) earlier this year.
 With 40 percent of its holdings in financials, Temasek's
portfolio lost nearly a third in the eight months to November,
sparking unprecedented criticism in Singapore about its
strategy.
 Ho did not give the exact portfolio level as of March 2009.
 "In our Temasek Review last year, we reported an annual
value-at-risk of almost S$40 billion ($27.8 billion) last
March. This meant a 16 percent probability for our portfolio
value to drop more than S$40 billion by March this year.
Indeed, it has turned out to be so, and more," Ho said in a
rare speech.
 Temasek, whose sole shareholder is the Ministry of Finance,
had S$185 billion in assets as of end-March 2008, which fell to
S$127 billion as of November 2008. For a factbox on Temasek and
its investments see [ID:nSIN129364].
 BACKING ASIA-FOCUSED BANKS
 Despite the portfolio fall, Temasek has backed the rights
issues of Asia-focused Standard Chartered (STAN.L: Cotización) and
Singapore's DBS Group (DBSM.SI: Cotización), and boosted its stake in China
Construction Bank (601939.SS: Cotización)(0939.HK: Cotización).
 "Banks are one of the best proxies that can benefit from
the growth of the economy," said Wong Kok Hoi, who helps manage
$1.5 billion in assets as chief investment officer of APS Asset
Management.
 Wong, who attended Ho Ching's talk, also said it made sense
for Temasek to invest in food and energy for diversification as
these sectors were critical in economic development.
 Ho's remarks on Temasek's investment losses and strategy
were her first public comments since Temasek said last week
Charles "Chip" Goodyear will not become CEO due to differences
over strategy. [ID:SIN435934]
 Ho, who is also the wife of Prime Minister Lee Hsien Loong,
did not elaborate on the differences between Goodyear and
Temasek.
 "I just want to reaffirm that the decision was both mutual
and amicable. We continue to hold Chip in very high regard for
his professionalism and his integrity," she said.
 Goodyear, who would have been Temasek's first foreign CEO,
was widely expected to trim Temasek's financial holdings and
move aggressively into commodities and energy and into emerging
market infrastructure and consumer retail sectors, analysts and
bankers have said. [ID:nSIN190820].
 Ho said Temasek would continue to look at internal and
external candidates for her replacement.
 She said the fund's performance would hurt staff bonuses,
leading to a second year of cuts to the bonus pool.
 ($1=1.439 Singapore Dollar)
  (Editing by Neil Chatterjee and Lincoln Feast)