Temasek sells Singapore stakes, boosts Indian buys

Updated: Aug 4 2005, 06:21am hrs
Temasek Holdings Pte, which has more than $54 billion of assets, is reducing its holdings in Singapore companies including SMRT Corp and boosting its investments in countries such as China and India.

The Singapore state-owned investment company said its selling a 7.3% stake in SMRT, Singapores biggest subway operator. The announcement came less than two months after Temasek sold 29.5% of CapitaCommercial Trust, a real-estate trust backed by rental income from Singapore office buildings and car parks.

Chief executive Ho Ching is increasing investments in countries such as China and India to boost returns from an average of 3% a year over the past decade. Temasek said in 2004 it has just over half its assets in Singapore, where the economy is forecast to expand in 2005 at less than half of last years 8.4% pace.

Singapore is a small market and the region is growing, said Pang Shun-Pen, a director at HSZ Singapore Pte, who helps manage $400 million in Asia outside Japan.

You have no choice but to look overseas. Temaseks purchases in 2005 include a 73% stake in Pakistans NDLC-IFIC Bank Ltd,

5% of China Minsheng Banking Corp, as well as a 15% holding each in Malaysian Plantations Bhd and Indias Shringar Cinemas Ltd.

The investment company said on Wednesday it raised S$122 million ($74 million) from the sale of shares in SMRT. Temasek will remain the single largest shareholder of the subway operator after reducing its stake to 54.8% from 62.1%.

Singapore-based SMRT said on July 29, its profit in the three months ended June rose 14% to S$23.9 million from a year earlier, as more people rode in its trains and taxis. The stock has risen 28 % in 2005, compared with a 15% gain in the benchmark Straits Times Index.

This placement will improve the liquidity of SMRT stock and widen the stocks investor base, benefiting all SMRT investors, Temasek said in its statement on Wednesday.

In June, it sold 200 million shares of CapitaCommercial Trust, raising S$396 million from the sale. It still holds about 18.8 million shares in the trust.

Mr Ho, who became Temaseks executive director in May 2002, has accelerated acquisitions outside Singapore, including stakes in Telekom Malaysia Bhd, Indias ICICI Bank Ltd and two Indonesian banks.

Temasek has also invested in the $30 million BioVeda China Fund, as well as the $100 million New Horizon Fund, both of which invest in companies in China, according to its Web site.

Temasek has said it wants a third of its investments each in Singapore, in countries that are members of the Organization for Economic Cooperation and Development and other Asian countries. Over half its assets are in the city-state, 31% in OECD countries, and 17% in other Asian countries, Temasek said in its first annual report, which was released last October.

Temasek was set up in 1974, nine years after Singapore gained independence, to own and manage the governments portfolio of investments.

It owns controlling stakes in DBS Group Holdings Ltd, Southeast Asias biggest lender, and Singapore Telecommunications Ltd, the regions largest phone company, two of the largest companies by market value on the benchmark Straits Times Index.