Temasek May Sell Bonds to Individual Investors in Singapore

January 8, 2014 Leave a comment

Temasek May Sell Bonds to Individual Investors in Singapore

Temasek Holdings Pte, Singapore’s state-owned investment firm, is looking at ways to offer bonds to individual investors in the city state. Issuing fixed-income products will provide an “alternative investment opportunity” for investors seeking stable returns with lower risks, Stephen Forshaw, a spokesman for the company, said in a statement on its website in a response to a letter published in Today newspaper on Jan. 4.Temasek could join companies including Singapore Airlines Ltd., Genting Singapore Plc and Fraser & Neave Ltd., which have sold bonds to individual investors. The investment firm has a $10 billion medium-term note program where the securities are typically offered to institutions. The bonds have received top ratings from Standard & Poor’s Ratings Services and Moody’s Investors Service since 2004, according to Temasek’s annual report published in July.

“Temasek is less risky than other corporate issuers,” Marie-Anne Garcia, a credit analyst at Oversea-Chinese Banking Corp. in Singapore, said by telephone. “They will offer to retail investors a broader range of means to invest in.”

Rising Assets

Temasek’s assets rose to a record S$215 billion ($169 billion) in the year ended March as surging stock markets drove an almost sixfold increase in returns, it said in the annual report released in July. The value of Temasek’s holdings increased by 8.6 percent in the fiscal year from S$198 billion, while total shareholder return, which includes dividends, widened to 8.9 percent from 1.5 percent in the previous year.

The investment company’s total shareholder return averaged 16 percent since its inception in 1974. The average return was 4.9 percent over a three-year period, and 13 percent over 10 years, it said in the annual report.

Temasek is mostly invested in stocks, according to the statement today. The market value of its holdings may rise or fall by more than 30 percent during volatile periods such as the global financial crisis, Forshaw said in the statement.

“We are mindful that past opportunities and conditions are not likely to repeat in the coming decades,” Forshaw said. “Furthermore, global structural risks remain.”

To contact the reporter on this story: Klaus Wille in Singapore at kwille@bloomberg.net

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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