Temasek to step up investments as soon as market valuations drop additional, government says

SINGAPORE, Sept 30 (Reuters) – Singapore’s Temasek Holdings (TEM.UL) mentioned that market valuations had not but priced in a worldwide financial recession and that mentioned the state investor was ready for additional declines earlier than stepping up investments.

“Present valuations usually are not reflecting the chance of downturn we see within the subsequent 12 to 18 months,” Temasek’s chief funding officer, Rohit Sipahimalani, mentioned on Friday.

“I do anticipate as these valuations right, we are going to once more step up our tempo of funding,” Sipahimalani informed a session on the Milken Institute Asia Summit in Singapore.

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Temasek stays dedicated on its 4 main funding traits, together with digitization, longer lifespans, sustainable residing and the way forward for consumption, he mentioned.

“I believe these traits are nonetheless legitimate,” he mentioned. “For the long run, we are going to proceed investing alongside them with just a few nuances.”

Inventory markets globally have fallen sharply this 12 months as large will increase in rates of interest by inflation-fighting central banks increase worries a couple of recession or financial slowdown.

Sipahimalani mentioned the markets had not forecast any main decline in earnings and have been as an alternative factoring in progress in 2023.

“Even in a gentle recession, you’ll in all probability, normally see a double-digit decline in earnings,” he mentioned, including that earnings might decline by as a lot as 15 p.c.

Temasek, which owns a number of the greatest Asian firms, akin to DBS Group (DBSM.SI), China Building Financial institution (601939.SS) and Normal Chartered (STAN.L), is especially anchored in Asia.

The funding agency has a 63% publicity to the area as measured by underlying property of its portfolio firms, most of that are in Singapore and China.

“The UK hasn’t been a major funding vacation spot for us,” Sipahimalani mentioned. “Whether or not it is type of digitization or longer lifespans, and well being tech, biotech or sustainable residing, the primary areas we have seen that occur are in markets just like the U.S. and China.”

Temasek stays bullish on China in the long term primarily based on its funding themes, Sipahimalani mentioned.

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Reporting by Yantoultra Ngui; Enhancing by Anshuman Daga and Gerry Doyle

Our Requirements: The Thomson Reuters Belief Rules.

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