UPDATE 2-Temasek recoups losses, eyes deals in emerging mkts

Thu Sep 17, 2009 7:00am EDT

* Portfolio up 32 pct from April to end-July

* Portfolio at $122 bln end-July; August in line with indexes

* Buys stakes in S.Korea's ENK and Brazil's San Antonio

* Still open to new investments in financials (Updates with details, quotes)

By Neil Chatterjee and Saeed Azhar

SINGAPORE, Sept 17 (Reuters) - Temasek recovered from most of its portfolio losses this year as markets rallied, saving the Singapore wealth fund's blushes after ill-timed exits from Wall Street banks and giving it firepower for new deals.

CEO Ho Ching said any dip in markets could be a buying opportunity for the $122 billion investment firm that is still open to buying financials and investing in emerging markets.

Temasek [TEM.UL] lost over an estimated $4 billion on selling its stakes in Bank of America (BAC.N) and Barclays (BARC.L), but said it had benefited from investing in rights issues for its portfolio firms such as Standard Chartered (STAN.L) since these investments more than doubled by the end of July.

"We are in a very good cash position," Ho said at Temasek's annual review on Thursday. "We think there are lots of opportunities in (China and India) over the long-term."

The review showed Temasek's portfolio slumped S$55 billion or around 30 percent to S$130 billion in the year to end-March. Its portfolio then rose 32 percent to S$172 billion by end-July, and its August performance was in line with market indexes, Ho said.

For changes in the value of Temasek's portfolio, click: here

The firm's value-at-risk was S$28 billion at the end of March, meaning it had a 16 percent probability it would lose that amount or more this financial year, down from a value-at-risk of S$40 billion a year earlier, the review said.

"We believe the worst of the global meltdown risks are behind us," said Ho. "While there are some green shoots of growth, some structural risks still remain for the medium term," she said.

Temasek is Singapore's second-biggest sovereign wealth fund after the Government of Singapore Investment Corp.

Ho, the wife of Singapore's prime minister, said Temasek's board would still search for her successor after CEO-designate and former BHP Billiton chief Chip Goodyear unexpectedly resigned in July over strategic differences.

"The big issue is new leadership. Strategy comes from the leadership. Until they sort out the issue of leadership, nobody is going to be clear what the strategy is," said the head of a private equity firm in Singapore, who declined to be identified.

For a newsmaker on Ho, click [ID:SIN529783]

PROFIT HIT

The investment company, whose sole shareholder is Singapore's Ministry of Finance, said net profit for the financial year fell two-thirds to S$6.2 billion, as it was hit by losses on financial stocks and lower contributions from earnings by its portfolio firms such as DBS Group (DBSM.SI).

"Like investors everywhere they're just relieved that the market pulled back from the brink," said David Cohen of Action Economics in Singapore.

The role of sovereign wealth funds around the world, which oversee about $3 trillion in assets, changed from a key source of capital for struggling Western banks early in the crisis, to governments redeploying funds to stabilise home markets.

For a factbox on Temasek, click [ID:nSIN192308].

Temasek said in its annual review it had bought a 19.5 percent stake in South Korea's ENK, a supplier of cylinders for compressed natural gas, and 15.4 percent of Brazil oilfield services firm San Antonio International.

For a breakdown of Temasek's investments by region and sector, click: here

Temasek has published an annual report since 2004, part of efforts to be more transparent. Wealth funds have come under scrutiny from Western governments worried their investments may be politically motivated. (Additional reporting by Nopporn Wong-Anan and Brenda Goh; Editing by Anshuman Daga))

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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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