China Puts Pressure on Singapore's Temasek

By IVCPOST Staff Reporter

Jul 06, 2013 07:22 AM EDT

Temasek Holdings Pte Ltd. came under pressure to force the review of its exposure to Chinese banks in the wake of China's current financial and economic conditions. China was currently facing its slowest growth in more than two decades.

Regarding the current Chinese situation, Temasek was faced with two options. First, it could reduce its holding on Chinese banks. Second, it could wait until the Chinese banking and economic transformation was over and take advantage of its recovery.

Temasek was most likely to take the second option, said an economist at CIMB. According to Song Seng Wun, "Temasek will have to ride out the short-term restructuring theme. Rather than head for the hills, it won't be out of character for them to take larger stakes should the opportunity arise."

The results of the review would most likely show an increase of at least 8.6% in Temasek's portfolio. This would be a record SGD$215 billion, said Seng Wun. 

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