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Temasek Scrambles to Fight Challenging Market Conditions

Temasek Holdings, Singapore’s state-owned investment company, experienced a dramatic portfolio decline of about 24 billion Singapore dollars ($14 billion) in the year to March 31. This just after the company’s stock fell to S$242 billion ($180 billion), last fiscal year, from around S$266 billion ($194 billion). Temasek’s financial instability has many in the region unsure about the market’s stability, but company leaders are poised to keep the fund on track.

In a recent presentation to reporters, Temasek attempted to reassure the public and investors by pointing out that the company outpaced the benchmark indexes in both Singapore and Hong Kong. Michael Buchanan, Temasek’s head of strategy, noted that the world market has been volatile and the added political pressures of the Brexit has increased investment risk in the market.

Despite increased investment risk, Buchanan notes that there are opportunities as well. In June, the CEO Bill Winters began a restructuring program to help Temasek’s fortunes, including plans to cut about 15,000 jobs. The company has also been shifting investments towards areas with potential growth in media, technology and telecommunications.

Buchanan also pointed to investments which include companies that utilize the “sharing economy,” like AirBNB. Last year, Temasek raised $1.5 billion for the home-sharing company. Buchanan believes that sharing-economy companies are more resilient to an economic downturn. In addition, Temasek is investing in sustainable concepts, like environmentally friendly product packaging, vertical farming, and “smart energy” distribution.

The fund is also looking into increasing its presence in the insurance industry, especially in Asia, where competition is low. Plus company leaders are researching the payment services industry because of its strong recurring cash flows, and hopes to cash in on the conversion from physical money to digital money. Temasek will also open offices in San Francisco to investigate technology opportunities.

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