Temasek looks further afield for growth areas

As it approaches its 40th year, Singapore investment giant Temasek is stretching its legs, moving away from its finance-based comfort zone into sectors such as retail and African resources to ensure future growth, analysts say.

With worldwide holdings worth S$215 billion (HK$1.33 trillion) at the end of March, Temasek is listed as one of the top 10 global players by the United States-based Sovereign Wealth Fund Institute.

Its wide spectrum of interests spans banking, telecommunications, transport, life sciences and property, while more than 70 per cent of its investments are in Asia.

But with the global economy still readjusting five years after a crippling financial crisis, the firm, established in June 1974, is re-evaluating its portfolio to find new growth areas and minimise its exposure in the event of another downturn.

Analysts say businesses that cater to the needs of the growing middle class in emerging markets, as well as energy and resources, are expected to comprise the main areas of interest for the fund.

"One of the key investment strategies that Temasek has been pursuing in recent years has been to diversify its portfolio to tap into the rapid growth in spending by the middle class in emerging markets," said Rajiv Biswas, the chief Asia-Pacific economist at IHS Global Insight.