Published November 4, 2008

Black October eats into Temasek's paper wealth

$16.4b wiped off from portfolio of major listed S'pore companies

By TEH SHI NING

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(SINGAPORE) Last month's market upheaval swept away $16.4 billion in market value from Temasek Holdings' portfolio of major investments in Singapore-listed companies alone.

Calculations, based on the shrunken market capitalisation of 12 companies Temasek has a significant stake in, show that the value of its investments fell 25.7 per cent between Sept 30 and Oct 31. Compared to the beginning of the year, the drop is 45.7 per cent, or $40 billion.

Singapore's stock market capitalisation plunged $123.5 billion in the month of October.

Temasek saw a huge chunk of market value destroyed - on paper - from its 55 per cent stake in SingTel, which translated into $7.1 billion getting sliced off its portfolio's value in the month of October. The value of its SingTel stake fell $13.7 billion from Dec 31, 2007.

Its 29 per cent core interest in DBS Group meant that the bank contributed the second largest cut in value to Temasek's Singapore portfolio - $2.4 billion over the course of last month. DBS had borne the brunt of the sell-off among the three local banking stocks in October, losing 34 per cent of its market cap.

Temasek's 54 per cent share in Singapore Airlines' market cap dipped $2 billion in the month of October, and $4 billion this year so far. Its other transportation and logistics investments saw market value shrink too. Temasek's stake in SMRT Corporation meant a loss in market value of $360 million, while the value of its interest in Neptune Orient Lines fell by $563 million.

Market cap fell for the three infrastructure, industrial and engineering stocks with Temasek interest too.

Temasek's share of ST Engineering, Sembcorp Industries and Keppel Corporation's market value losses last month came to $584 million, $726 million and $1.1 billion respectively.

Technology stocks Chartered Semiconductor Manufacturing and STATS ChipPAC meant value cuts for Temasek of $232 million and $776 million respectively in October too. Its comparatively smaller 15 per cent stake in Fraser and Neave still led to a loss in value of $171 million last month.

CapitaLand was not hit as badly in October, so Temasek's 40 per cent interest in it led to a loss of $237 million, though for the year so far, the property developer has taken $3.8 billion off Temasek's portfolio.

Geographically, Singapore accounts for about a third of Temasek's net portfolio value.

It maintains a 12 per cent portfolio exposure to Asean countries, 22 per cent to North Asia, 23 per cent to the OECD economies, and a 7 per cent exposure to emerging South Asian economies such as India and Pakistan.