Temasek to in­vest more in China’s con­sumer sec­tors

China Daily (Hong Kong) - - BUSINESS - By LI XIANG lix­i­ang@chi­

Sin­ga­pore’s state-owned in­vest­ment firm Temasek Hold­ings Pte Ltd is op­ti­mistic about the world’s sec­ond big­gest econ­omy and it plans to bet more on con­sumer-re­lated sec­tors in China, two of its lead­ing ex­ec­u­tives said.

Wu Yib­ing, joint China head, said Temasek is tar­get­ing sec­tors such as health­care, tourism, and ed­u­ca­tion that will ben­e­fit from the rise of the Chi­nese mid­dle class and the re­bal­ance of the econ­omy to­ward a con­sump­tion and ser­vice-driven one.

“Over­all, we are cau­tiously op­ti­mistic about the Chi­nese econ­omy and we be­lieve the coun­try is ca­pa­ble of achiev­ing a suc­cess­ful eco­nomic re­bal­ance,” Wu said.

The firm is com­fort­able about see­ing slower but more sus­tain­able growth in China, which will al­low greater room for the gov­ern­ment to push through nec­es­sary re­forms in­clud­ing cut­ting ex­cess in­dus­trial ca­pac­ity, re­duc­ing lever­age and curb­ing sys­temic fi­nan­cial risks, Wu added.

China re­mained the big­gest coun­try by portfolio ex­po­sure for Temasek’s in­vest­ments out­side Sin­ga­pore for its fi­nan­cial year to end-March, ac­count­ing for 25 per­cent of its net portfolio.

Temasek, post­ing its full year re­sults ear­lier this week, re­ported a 13 per­cent share­holder re­turn, while the value of its portfolio reach­ing a record S$275 bil­lion ($197 bil­lion). Longer term 10 year and 20 year re­turns on its as­sets were 4 per­cent and 6 per­cent, re­spec­tively.

For the first time since 2009, the firm re­ported that it was in a net di­vest­ment po­si­tion, in­vest­ing S$16 bil­lion but di­vest­ing S$18 bil­lion of its portfolio. Temasek said the change un­der­scored its con­cern about high mar­ket val­u­a­tions glob­ally and pos­si­ble credit tight­en­ing in the US and Europe.

The firm sold part of its hold­ing in Chi­nese e-com­merce gi­ant Alibaba Group Hold­ing Ltd and State-owned China Con­struc­tion Bank Ltd, while in­vest­ing in Chi­nese on­line travel site In­ter­na­tional Ltd and ge­nomics in­for­ma­tion com­pany Wuxi Nextcode Ge­nomics Inc.

Wu Hai, a man­ag­ing di­rec­tor for China, said the firm was en­cour­aged by the re­form in the Chi­nese med­i­cal and health­care sec­tors, which would boost in­no­va­tion and gen­er­ate more in­vest­ment op­por­tu­ni­ties for Temasek.

The Sin­ga­porean firm also in­vested in Chi­nese ex­press de­liv­ery com­pany ZTO Ex­press last year and re­tained its hold­ing in Inc, the do­mes­tic ri­val of Alibaba.

The firm said its portfolio mix in China is in line with an ad­just­ment in its global in­vest­ment theme, with more fo­cus be­ing placed on new ar­eas such tech­nol­ogy, agri­cul­ture, life sciences, health­care, non­bank fi­nan­cial ser­vices, en­ergy and re­sources.

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