Wednesday, April 17, 2013

TEMASEK goes shopping

Two thirds of the board of Temasek Holdings are visiting Korea these days, but if it weren't for KIM Jong-un antics, the whole company would have come.

Temasek CEO HO Ching is determined to invest in the country. The wife of Singapore's PM LEE Hsien Loong has run this government's investment arm* for nine years, and boosted its portfolio to S$ 198 bn (US$ 160 bn) end of march 2012.

Why Korea? A mature market doesn't fit into this profitable powerhouse's top priorities (China, India, nations with a growing middle class), but Temasek is also looking for countries with a clear technological and marketing edge, and future leaders in sectors like biomed or IT.

Temasek needs new growth drivers, and usually invests big. But if they were looking for quick bucks, they could also tap into the booming markets of Latin America (1% of their Asia-centered portfolio**) or Africa, Central Asia and the Middle East (2%)


Temasek holdings TSR
Total Shareholder Return since inception (1974). Temasek took a hit in 2009, rebounded the following year, remained flat afterwards 

First, the holding doesn't seem comfortable far from its comfort zone, and doesn't recruit board members far from the local political sphere - strong ties to the Ministry of Finance.

Second, Singapore is competing with Korea in many fields, and the government may be seeing an opportunity in the the nation's unbalanced ecosystem to shop promising SMEs for its own IT and biomed clusters.

S'pore dispersal?

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* not to be confused with GIC (Government of Singapore Investment Corporation)
** Temasek portfolio as of 2012/03/31: 30% in Singapore (controls many national champions, including Singapore Technologies Group, where HO Ching worked before joining Temasek), 42% in the rest of Asia, 14% in Australia and New Zealand, 11% in North America and Europe, 2% in Africa, Central Asia and the Middle East, 1% in Latin America.

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