CICHY China Construction Bank Corp (PK)

   By P.R. Venkat and Gaurav Raghuvanshi 
 

SINGAPORE--Singapore's Temasek Holdings Pte. Ltd. will slow its investment pace over the next one to two years due to concerns about the global economy, especially given trade tensions.

The Singapore state investment firm invested 29 billion Singapore dollars (US$22 billion) in sectors including technology, life sciences and nonbank financial services in the fiscal year that ended March 31. During that period, some of the companies that Temasek invested in included U.S firm Global Healthcare Exchange LLC, an exchange for health care providers, and Chinese tech giant Tencent Holdings Ltd. (0700.HK).

So far this year, Temasek has participated in the US$14 billion fundraising by Ant Financial, the Chinese fintech firm that operates the Alipay payments platform. It also invested 3 billion euros (US$3.5 billion) to increase its stake in Bayer AG (BAYN.XE).

"We continue to maintain a disciplined approach. Given the market outlook, we may recalibrate and slow our investment pace over the next nine to 18 months," Alpin Mehta, Temasek's managing director of investments, said.

Temasek has stakes in companies like Standard Chartered PLC (STAN.LN) and China Construction Bank Ltd. (0939.HK). It also owns controlling stakes in some of Singapore's largest companies, from airlines to ports. Its net portfolio value for the period ended March. 31 rose 12% to S$308 billion from S$275 billion a year earlier.

It said it will seek opportunities in sectors that ride on "transformational" technologies and changing consumption patterns of rising middle class populations.

During the past year, the company's investment in the U.S. took a larger share, followed by China and Europe. Temasek has stepped up its exposure to the U.S and Europe, which now account for nearly a quarter of its overall portfolio.

During the last fiscal year, divestments totaled S$16 billion, including the sale of stake in Swiss duty-free stores Dufry AG (DUFN.EB) and a partial divestment of its stake in Industrial & Commercial Bank of China Ltd. (1398.HK).

Michael Buchanan, Temasek's head of strategy, said that the chances of "broader and wider" trade tensions were higher than before. However, a full-blown trade war isn't expected at this stage, he added.

Temasek officials also said that downside risks to the global economy have increased in the near term, amid rising global interest rates and political risks in Europe.

Net profit last fiscal year rose to S$21 billion from S$14 billion and the company said its balance sheet gives it the flexibility to ride out short-term market volatility.

Write to Gaurav Raghuvanshi at gaurav.raghuvanshi@wsj.com and P.R. Venkat at venkat.pr@wsj.com

(END) Dow Jones Newswires

July 10, 2018 04:37 ET (08:37 GMT)

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