May 22, 2012

Singapore - Temasek warns of further pressure on financial markets


SINGAPORE: Temasek Holdings on Tuesday warned of further pressure on financial markets due to the European debt crisis.

In a letter published on its website relating to its position on investments in Chinese banks, Temasek said markets "may be entering a period of stress in the next 12 to 24 months due to the Euro zone crisis".

Temasek was responding to a letter published in TODAY newspaper on May 18 urging the Singapore investment company to disclose its exposure to China's banking industry.

Within the past two months, Temasek has reduced its holdings in Bank of China (BOC) and China Construction Bank (CCB) while increasing its stake in ICBC.

Temasek said "after the recent rebalancing of our stakes", Hong Kong Stock Exchange reports show Temasek's H-share holdings in ICBC (5.3 per cent), CCB (7.4 per cent) and BOC (3.7 per cent).

The investment company said its investment decisions are based on its "fundamental assessment of long term value".

China is in a transition towards a more "balanced and sustainable growth path", the company said.

"There will be some near term risks as well as opportunities for Temasek as we continue to invest and divest steadily," Temaseks said.

- CNA/wm


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