IS TEMASEK HOLDINGS GAMBLING WITH S’PORE’S HARDEARNED RESERVES?

Temasek divested a record S$10 billion plus in 19 listed US companies from September to December last year.

As at 30 Sep 2015, Temasek had 20 positions worth about US$10.5 billion/S$14 billion. Some of these investments were held for years, others only a few months. At the end of Q4 2015, 19 positions were closed out. These 19 investments were valued at about S$11 billion at the end of Q3.

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During Q3 2015 (previous quarter) when global stock markets underwent a huge correction, Temasek had already reduced its holdings by about US$5.45 billion/S$7.6 billion (below). (market value at end of quarter, actual value not disclosed by Temasek)

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All in, Temasek divested S$18 billion worth of ‘long-term’ investments within 6 months.

Temasek’s definition of long-term investments:

In Q2 2015, Temasek made the following new investments:

1) Bought 22.6 million Univar Inc shares valued at S$847 million. (US$1 = S$1.347) Divested in Q4 2015.

Source: Yahoo

2) Bought 11.56 million EMC COrp shares valued at S$411 million and divested in Q4 2015.

3) Bought 12.3 million Virtu Financial Inc shares valued at S$389 million, divested in the same quarter.

Is this long-term investment?

What is more troubling – Temasek has been betting billions and liquidating positions without regard to the risks involved. An example would be Alibaba (below).

For Temasek, long term = short term = tikam tikam. No?

Questions:

Have the 19 listed US companies become risky overnight?
Did ‘sound’ fundamentals of every company become unsound?
Why does Temasek need to raise so much cash?
Is the cash needed because of possible capital raising by its Chinese investments?
Has Temasek been forced to sell US assets because its Chinese investments are mostly underwater?  etc.

The public has been repeatedly informed our SWFs are long-term investors. When Temasek divested a large number of long-term investments at one go, there is a lot to be explained in Parliament, if parliament represents the people.

Failure to explain to Singaporeans how tax dollars are managed will breed more distrust, ie the public will perceive Temasek to be a speculator/punter and not a long-term investor.

 
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