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Singapore's Temasek sees deals slowing as trade tensions bite

Reuters  |  SINGAPORE 

By Anshuman and Jack Kim

(Reuters) - state investor cautioned it was looking to temper its pace of investments this year as trade tensions between world's top two economies ratchet up, after reporting a record high annual portfolio value.

The cautious outlook underlines the challenges that state investment firms like Temasek face as rising protectionist policies and anti-globalization sentiments put their investment and management capabilities to test. Investment Corp, earlier this week, struck a similar cautious note.

"We expect global growth to moderate and see the probability of risks increasing," Temasek's managing of investment, Sulian Tay, said at a conference on Tuesday. "These include geopolitical and trade tensions as well as monetary and financial stresses in important economies."

Escalating trade tensions between the and have shaken markets over the past month. implemented tariffs of 25 percent on $34 billion of Chinese imports just last week, with swiftly retaliating in kind.[MKTS/GLOB]

Recent data suggests "trade wars and overheated valuations are turning most sovereign wealth funds cautious", said Javier Capape, at

Temasek, the top investor in about a third of companies in Singapore's Straits Times index, said it was looking to temper its investment pace in the year ahead but was open to investment opportunities, including counter-cyclical ones.

"We do have a more cautious outlook right now compared to what we had in the past," said Rohit Sipahimalani, Temasek's joint head of portfolio strategy and group.

RECORD PORTFOLIO VALUE

Headed by Ho Ching, wife of Singapore's prime minister, Temasek has reshaped itself as a global investor, ploughing billions of dollars into and emerging markets, while retaining stakes in firms such as and Chinese banks including Construction Bank.

For the year ended March 2018, Temasek's portfolio value hit S$308 billion ($227 billion), an all-time high and 12 percent more than a year ago. It saw S$29 billion in new investments last year, versus S$16 billion in divestments.

In recent years, Temasek has raised its exposure to start-ups. Last month, Temasek and GIC, Singapore's bigger state fund, featured among main investors in a record-setting $14 billion fundraising by China's

The accounted for the biggest share of its new investments in the year just ended, with China coming in second.

Among its latest U.S. deals is a purchase of a portfolio of student accommodation properties in worth $1.6 billion. It also led a $502 million investment in Magic Leap Inc, a U.S. startup developing

Temasek said it was comfortable with its Chinese

($1 = 1.3542 dollars)

(Reporting by Anshuman and Jack Kim; Editing by Himani Sarkar)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 17:43 IST
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