Market analyst: Temasek Holdings’ investment in Europe runs against stream of ‘common thinking’
Posted by temasektimes on June 2, 2012
Just when most investors are getting out of Europe which is currently gripped by a crippling debt crisis with Greece looks set to exit the Eurozone soon, Singapore’s sovereign wealth fund Temasek Holdings is making a bold leap into the unknown by looking for opportunities there.
In an interview with the state media, Temasek’s head of strategy Chia Song Hwee said the investment firm is now looking at European firms with good operations and strong businesses outside the region:
“In the current market environment, as you know, there are market imbalances… So there is an abundance of opportunities for us to tap. However, the most difficult part of picking up opportunities in such an environment is what is the right time, what is the right valuation for the risk-reward proposition,” he said.
Acquisitions in Europe would mark a departure from Temasek’s recent investment activities, which focused on top banks in China and other other emerging economies.
One market strategist for IG Markets Singapore Justin Harper described Temasek’s European foray as flying in the face of market sentiment on the region:
“They seem to be contradicting what most people are doing, a lot of people are saying get out (of Europe), if they have not done that already they’ve got more problems to come…That raises eyebrows from the point of view that they’re going against the stream of common thinking.”
During the peak of the financial crisis in 2009, Temasek Holdings snapped up ailing banks Bank of America and Merrill Lynch on the ‘cheap’. Its investment decision was then criticized by U.S. investment guru Jim Rogers who predicted that Temasek will lose ‘a lot of money’ which eventually came true.