In the early 1960s, the Singapore government took stakes in a variety of local companies, in sectors like manufacturing and shipbuilding. Prior to the incorporation of Temasek Holdings in 1974, these stakes were held at first by the Minister for Finance (Incorporated). Minister for Finance (Incorporated) is Temasek Holding's single shareholder today.
In addition to Temasek, the government of Singapore has one other investment arm, the Government of Singapore Investment Corporation (GIC), which invests primarily the governments foreign reserves.
As of 2004, it owns stakes in many of Singapore's largest companies, such as SingTel, DBS Bank, Singapore Airlines, PSA International, SMRT Corporation, Singapore Power and Neptune Orient Lines. It also holds investments in public icons like the Raffles Hotel and the Singapore Zoological Gardens. It also holds a stake in Singapore Pools, the only legal betting company in Singapore. On October 14, 2004, it announced that it was closing the operational headquarters of Singapore Technologies and transferring the latter's assets to itself.
About half of its managed assets are external to Singapore and this includes stakes in telecommunication companies such as Telekom Malaysia. It has also taken up stakes in foreign financial institutions such as PT Bank Danamon in Indonesia. Temasek-linked companies (TLCs) also hold an extensive global portfolio, such as Singtel's ownership of Australian telco Optus.
Although 75% of Temasek's holdings is in Singapore, it has set a target of eventually reducing this to only one-third. One-third will be in developed markets and the final third is planned for investment in developing economies.
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Source: Temasek Holdings
To satisfy the legal requirements in issuing bonds to raise money from the public, Temasek reported its accounts to the public for the first time in its 30-year history on October 12. Net profit was S$7.4 billion (US$4.4 billion) on revenues of S$56.5 billion for the financial year closing on March 2004. Its 2003 profit was S$241 million on revenues of S$49.65 billion in the previous financial year, while its 2002 profit was S$4.92 billion on revenues of S$42.56 billion.
The 2004 report states that Temasek manages S$90 billion in assets. This represents an average total shareholder return of 18% year-on-year since 1974. This single year return was quite controversial as the average return over its 30-year history is only around 3%, far below the industry average. The fact that Government Linked Companies lack transparency, example, Temasek had never open its books until now, did not deter Standard and Poor's to assign Temasek Holdings with a AAA rating for "exceptionally strong", despite its past poor long term performance. At the time of this report, the various Temasek holdings held one-third of Singapore's stock market capitalization between them.
Temsak through its 100% owned subsidary Vertical Theme bought a 14.73% stake in MPlant(Malaysia Plantation) which in turns owns Malaysia smallest bank Alliance Bank. The deal was worth Ringgit 463.59million.
Temasek bought a 25% stake in one of Pakistan's smallest bank, NDLC-Ific Bank.
Temasek bought a 2.6% stake in Russian TeleSystems for US$300 000 000(S$491 million) thus expanding its investments to Eastern Europe.
Temasek Holdings has bought a stake in Mahindra & Mahindra - India's biggest maker of sport utility vehicles and tractors.Temasek made the purchase through its wholly-owned unit Aranda Investments (Mauritius) Ltd. It bought 5.5 million shares in the market representing a 4.7 percent stake. Temasek declined to give any financial details, but based on 30 March's closing price, it would have cost some US$62 million. The move comes after Mahindra & Mahindra and Ford Motor ended their partnership in India by selling their cross-holdings.
Vietnam's Pacific Airlines will sell a 30% stake to Temasek Holdings Pte., Singapore's state-owned investment company, in the second half of 2005. A Ministry of Finance official said Pacific Airlines is now valued at $167 million, and Temasek will invest $50 million to acquire the 30% stake. With the cash injection from Temasek, Pacific Airlines, which has accumulated debts of VND215 billion ($14 million) after more than 10 years in operation, will be able to pay off its debts and prepare for new developments, he said.
There is a perception that Temasek is an arm of the Singapore government and owned 100% by the Ministry of Finance. When ST Telmedia, a TLC, took a significant stake in Indonesian Indosat, workers went on strike to protest working for Singapore. In 2003, when ST Telemedia acquired a two-third share of Global Crossing, the acquisition had to be approved by the U.S. government for fear that the local government would gain control of the extensive network.
- Temasek Holdings
- US Embassy article (March 2001) on Singapore's Government-linked corporationszh:淡马锡控股
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