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Saudi wealth fund PIF joins Temasek of Singapore in reporting steep 2022 investment losses amid slump in US, China markets
- Saudi Arabia’s US$778 billion sovereign wealth fund reports an US$11 billion loss from investment activities in 2022
- Temasek to ‘apply a geopolitical lens’ to its investments, avoid areas that are in the cross hairs of US-China tensions, CIO Sipahimalani says
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Two of the world’s biggest sovereign wealth funds lost a combined US$16 billion on their investments in 2022. Chinese stocks produced a mixed outcome, while US companies and Credit Suisse likely caused some of the biggest mark-to-market blows.
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Saudi Arabia’s Public Investment Fund (PIF) incurred a loss of US$11 billion on investment activities last year, according to media reports on Wednesday, versus a US$19 billion gain in 2021. Temasek Holdings lost S$7 billion (US$5.2 billion) in the 1 months to March 2023, its worst annual results since 2016, the state investment firm said on Tuesday.
The losses underscored the challenges in navigating global stock markets in 2022 when the Federal Reserve began its policy “lift-off” with consecutive rate hikes throughout the year. The S&P 500 slumped 19.4 per cent last year, while the Hang Seng Index lost 15.5 per cent, erasing a combined US$8.8 trillion of value from their constituents.
“In the challenging investment environment of 2022, sovereign wealth funds became more cautious and reduced their risk exposure,” the International Forum of Sovereign Wealth Funds said in a recent report. “This cautious approach was most evident in their retreat from emerging markets.”
The challenges of investing in China under the zero-Covid policy were “particularly stark,” it added.
PIF, which managed US$778 billion of assets, owned stakes in Alibaba Group Holding, BeiGene and PDD Holdings, according to its fourth quarter regulatory 13F filings. Alibaba, the owner of this newspaper, fell 26 per cent in New York trading while biotech firm BeiGene slumped 19 per cent. Alibaba’s e-commerce rival PDD gained 38 per cent last year.
The Saudi fund also owned minority stakes in SenseTime and Flat Glass Group, based on Hong Kong stock exchange filings. Both stocks tanked by more than 50 per cent in 2022.
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