Temasek's Rebranding
By The Void Deck on 11 Feb 2009 7:02 PM
Haloscan Comments Closed

The exit of Ho Ching can be seen as the rebranding of Temasek as a Government-Linked Company to a domestic crowd, and as a Sovereign Wealth Fund to an international audience. Ho Ching's send off is overall a nicely timed publicity move to restore some hope in Temasek, especially when its high profile strategic investments in Wall Street have suffered considerable short term paper loses brought about by the subprime crisis.

Objectively, Temasek practices going long and its investment time frame is minimally 10 years, according to the rhetoric and the rationale behind these modern imaginations of the East India Company. However, Temasek's declaration that its assets shrank by 31% from S$185 billion to S$127 billion in less than a year is still a painful national introspective moment. The fact that Temasek's assets in 2004 stood at S$90 billion and now it stands fatter at S$127 billion despite the recent crisis is easily forgotten when such significant losses are reported.

Temasek after Ho Ching

Ho Ching was in Temasek since 2002, and what a controversial reign. Under Ho Ching's watch, 40% of the SWF's investments are locked into financial institutions and with no bottom yet in sight, Temasek's rhetoric of buying low and value investing is increasingly harder and harder to sell in the prevailing gloomy short term mood. Moreover, Temasek's oblique involvement in destablising Thai politics because of the Shin Corp acquisition in 2006 is an embarrassing geopolitical and financial blight on Ho Ching's tenure at Temasek. Nevertheless, she has to be credited for the SWF's inaugural annual report in 2004 which transformed the SWF's image into one of more transparency and accountability, 30 years after the SWF was founded.

Since 2007 particularly, SWFs from the UAE to Singapore were viewed with suspicion, and the SWFs in turn made placating Vulcan split hand gestures to assure the US and other governments that they come in peace to live long and prosper together. The surprise appointment of Chip Goodyear as Temasek CEO from October 1 this year is a progressive marketing move and part of this assurance package. The SWF's glare as a Singapore government entity is dimmed a bit consequently. Although Temasek's next acquisition in Wall Street or in a regional telco would still be greeted with trepidation and conspiracy theories, it would probably be less so than if the wife of the PM is in-charge of the SWF. Local and international expectations of greater openness will increase after Chip officially takes over later this year. Hopefully, Temasek's attempts to charm partners and ward off xenophobic protectionism will continue if not expand .

The appointment of the American at the helm will drive the message that Temasek should be seen as any other big rejuvenated MNC. Furthermore, the new CEO also brings the promise of new ideas. There is already speculation that because of Chip's mining industry background, this would open doors for Temasek's diversification into commodities.

Ho Ching after Temasek

At the local front, Ho Ching's exit sends mixed political signals to a domestic crowd. Temasek now has the opportunity to rebrand itself as a proper GLC, if there is such a thing as a proper GLC, and not a Lee-Linked Company as critics like to see it as. Temasek's re-emphasised brand identity is that it is not related to the ruling elites, but it serves state interests first and foremost. The replacement of Ho Ching with an outsider, a non-citizen and an American even, is a political statement that there is no Lee Dynasty, and that Ho Ching is not after Temasek at any cost. Some might even say that it is a controversial endorsement of the "meritocratic" foreign talent policy and that there is no commercial job that a foreigner cannot hold, economic recession or not.

However, her abdication has opened up more questions on where the outgoing Temasek CEO might end up next. The Internet is already rife with crystal ball gazing as Ho Ching being the next President, CEO of another major GLC or local icon like DBS since Richard Stanley will be taking his bow soon presumably. If that is the case, then the small public relations gains from Ho Ching stepping down from Temasek, only to saunter into another Singapore political-economic position of power, could be wasted.

Comments (15)

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"The fact that Temasek's assets in 2004 stood at S$90 billion and now it stands fatter at S$127 billion despite the recent crisis is easily forgotten when such significant losses are reported."

If the difference of S$37 billion are entirely from capital gain through investment, then I must admit it is a very good return.

However, I seriously doubt this is so. It is not known how much of the gain is from fresh injection of capital. Bear in mind that proceeds from land sales go into the national reserve as well as the budget surpluses are also added to the coffers of Temasek and GIC for investments.


Nice commentary.

The so-called loss of 31% needs to be put in perspective. Harvard also supposedly lost about a quarter of its endowment in the recent financial meltdown.

Some of this losses is likely temporary paper losses that will be recovered once we're out of the current recession and confidence returns to the stock markets. Temasek's exposure to the banks is however somewhat of a concern.

Mischievous question: Would such a rebranding be better for GIC too? ;)

Also what do you think of two other big changes over the period of Ho Ching's tenure: (1) aggressive diversification outside of Singapore, followed by (2) aggressive diversification outside of East Asia. In hindsight, would it have been better then (and perhaps in the future) to retain/reintroduce the domestic/international division between Temasek and GIC?

WRT KTM's concern about Temasek's exposure to Western banks, I think perhaps the more important question is not the exposure per se but the quality of due diligence done (or not done) for those purchases and whether procedures and personnel involved require changes.


I beg to differ.

Face-saving rather than rebranding is the PR exercise that is being carried out here. And you fell for PR bit of it and miss the true substance of the whole affair here.

The losses have to be officially reported. So, she steps down first. No other Singaporean is better or more capable. Hence, a FT is found and claim credit for this as well. Even a FT needs her help for the next 6 months to fit in. Face-saving to me. Rebranding an afterthought for them.

Just ask oneself. Would a FT CEO change the perception of Temasek and who Temasek is?

The huge losses that we all know is unacceptable. Even the true extent of the losses may never be fully disclosed. What has been disclosed is only partial (face-saving again here). More losses are to be expected to be announced in the next few months.

Her exit may mean one of two things or both; (1) losses are much higher and expected to increase; (2) the huge losses are likely to remain for many years. Why stay?

Thanks, thought-provoking comments.

Yamasam: Interesting point about capital injection into Temasek by the government. I couldn't find enough details on how much and when the Ministry of Finance boosted the SWF's purse, but it does put the growth of the assets in perspective.

KTM: On the topic of perspective, I totally agree with you that many (deliberately) fail to see that it is all about cyclical paper gains and losses, in the grand scheme of long term state interests.

Ringisei: Mischievous indeed! With the benefit of hindsight, the move into regional telcos was a bit premature and turned into geopolitical fiascos. The Wall Street adventures initially sounded great but look where we are now. The true taste of the pudding however is when the global economy recovers, assuming that Temasek doesn't turn into a local convenience store by then.

Kharma: Perhaps face-saving too. Basically, since Ho Ching is confirmed to be on her way out and with no confirmation of her next appointment, in simple terms, she has lost her job. We just hope that she does not get a nice fat bonus on her way out.


Ah, this is a most interesting article, if I may be permitted to say so.

But I really don't believe, it is possible to rebrand Temasek, Void Deck - that would really ONLY be possible; if let's say we have 350 companies to make up the full spectrum of the fortune 500 like the Americans.

The problem is Singapore doesn't really have ANYTHING that compares to the size and clout of Temasek and its really the lack of corporate setpieces that militates against this whole idea of rebranding.

The problem here is in the pov of the experts (not that I am one); whilst it is certainly possible to take the man (woman) out of the jungle; it may not be possible to take the jungle out from the man.

Do you understand?

So it is fair to assume; even pundits will remain cautiously skeptical about this turn of events.

As it will always be difficult, if NOT impossible to completely extricate the persona of the ruling elite from Temasek.

As for the appointment of Goodyear, we can say many things here; some flattering others not so endearing, but for the time being, I would prefer to reserve judgement.

My feel is the true picture concerning how Temasek has performed in this recession is NOT really out yet; there will be more to come.

On that, I am quite certain.

Nonetheless, thank you for this article, it was indeed a pleasure to read and the perspective original in every way. And may I say, that it is indeed a pleasant surprise to see the Singapore Angle writing again.

Our hope is we can write alongside many of you to add further to our on going social narrative.

Thank you.

SD (The Internet officer of the brotherhood)

On the topic of perspective, I totally agree with you that many (deliberately) fail to see that it is all about cyclical paper gains and losses, in the grand scheme of long term state interests.

It's quite a no-brainer. Seems that people don't understand (or deliberate fail to understand) that most of Temasek's holdings are in stock?

Look at how much the stock markets have tanked. If Temasek is holding an "market portfolio", the loss in value would have been exactly the same as the losses for the index. If the KTM remembers correctly, the STI has fallen like 40% in the last six months alone. In this light, even a 31% loss may even look good! Hiaz. :-P


"On the topic of perspective, I totally agree with you that many (deliberately) fail to see that it is all about cyclical paper gains and losses, in the grand scheme of long term state interests."

No this is NOT a "no brainer" - that would ONLY remain palpably true; if you subscribed to the belief: there is only ONE way to generate wealth.

I think the central question is NOT how much was lost; but rather was the strategy for wealth creation EVEN sustainable in the first place? Why were all the eggs put in one basket? Were there any risk mitigation strategies? How was risk hedged across the full spectrum of opportunity and cost?

This is a question that the MSM seems to conveniently elide in one masterful stroke by deliberately juxtaposing these losses against comparatives with other SWF's to perforce the idea, there remains ONLY one reliable way of wealth creation.

It would seem if get your news exclusively from the MSM, every firm in on this planet has lost out; that I am afraid is both a misrepresentation of fact and a travesty of rational logic.

Truth remains MANY firms and funds todate; both private and public have not only managed to weather this storm, but they have even emerged stronger from it, as they crafted good strategies and you must ask yourself why did Temasek not do the same?

That is the question. The rest is mere commentary.




Links, or it didn't happen.

Bernard Leong:


Nice article. For the current investment climate, the private equity market in the realm of mergers and acquisitions (M&A), IPO or capital will not be an area where Temasek will seek to improve their earnings. The few routes which some investors are moving towards are the resources and commodities market in the emerging markets (the third and fourth tier cities in China, South America and Africa). One industry where an investment can make returns within 1-3 years is the mining industry, where people are prospecting and open up mines. Hence it is not strange why they picked someone like Chip to run Temasek. In any case, a change of strategy is required. Temasek, as a SWF, will be able to hold out on their equity market investments since they have a rather diversified portfolio. They also have stakes in traditional industries in banking and shipping, so one can also view the company as a conglomerate, and this is the best time for them to buy weak and distressed assets.

Thanks again for the insightful comments.


Right on. The full extent of the damage will be known when Temasek issues its coffee table book annual report. Also, it is very difficult to make it seem that Temasek, with its unabashed affinity to the government, is actually a MNC rather than a SWF. Digressing slightly, from the subprime crisis, an MNC is just as, of not more, dangerous than a SWF in upsetting and taking hostage of economies. But packaging is still important however cosmetic. A product that has better packaging, all things equal, usually sells better. My sense is that a Goodyear Temasek is the fluffy ribbon on top of the wrapper in the Temasek package.


True, I'm no expert but bank M&A does seem taboo now. Perhaps Chip might breath new life into Temasek with a commodity focus although that market had its run already and just might, might, be where to park money into quickly as it is bottoming out, if any analyst can be believed nowadays.


I just wish to ask a very simple and straight question of the laison officer of the brotherhood.

(a) Why has nothing so far been written by the BP about the mega losses suffered by both Temasek and GIC?

(b) What about the new setting of the strategy for Temasek.

(c) What exactly went wrong?

(d) Will I ever get a question for a,b,c? As I didn't seem to have any luck when Darkness was around.

Many tanks

Martin D. Weiss:

The nation's largest banks are so close to collapse and the world economy is coming unglued so rapidly, a major Wall Street meltdown is now imminent.

Specifically, it's now increasingly likely that virtually all of our forecasts of recent months could come to pass in a very short period of time, including ...

* Stock market crash: A swift plunge in stocks to about 5000 on the Dow, 500 on the S&P 500 and 900 on the Nasdaq ... or lower. (For our reasons, see "Stocks to fall AT LEAST another 40%!")

* Corporate bankruptcies: A chain reaction of Chapter 11 filings or federal takeovers, including not only General Motors and Chrysler, but also Ann Taylor, Best Buy, Jet Blue, Macy's, Saks Fifth Avenue, Sears, Toys "R" Us, U.S. Airways and even giants like Ford or General Electric.

* Megabank failures: Bankruptcies or nationalization not only of Citigroup and Bank of America, but also JPMorgan Chase and HSBC. (See my January issue, "Megabanks Could Fail Despite Federal Aid.")

* Nationwide epidemic of small and medium-sized bank failures: Outright FDIC takeovers, with little prospect of nationalization. (I'll give you a link to our free guide with a more extensive list in a moment.)

* Insurance failures: State takeovers of companies like Ambac Assurance, Bankers Life and Casualty, Conseco, FGIC, Medical Liability Mutual, Mortgage Guaranty Insurance, Nuclear Electric Insurance, PMI Mortgage, Standard Life of Indiana and many others. (Our free guide also contains a more extensive list of insurers.)

* Cities and states: An epidemic of defaults by thousands of cities, states and other issuers of tax-exempt municipal bonds.

* Stock market shutdowns: Trading halts on major, big-cap stocks ... plus on-again, off-again exchange shutdowns, making it increasingly difficult for investors to liquidate their holdings at any price.

* Credit market deep freeze: A virtual shutdown in all debt markets except U.S. Treasuries. An avalanche of selling -- and virtually no buyers -- for corporate bonds, commercial paper, asset-backed securities, municipal bonds and all forms of bank loans.

* Government bond collapse: A steep decline in the price of medium-and long-term government securities, as the U.S. Treasury bids aggressively for scarce funds to finance a ballooning budget deficit.

Shocking? Perhaps. Avoidable? No.

Nor am I alone in anticipating this rapid unraveling of the economy and financial markets. This past Friday, at a Columbia University dinner reported by Reuters ...

* George Soros said the financial system has effectively disintegrated, with the turbulence more severe than during the Great Depression and with the decline comparable to the fall of the Soviet Union, while ...

* Paul Volcker said he could not remember any time, even in the Great Depression, when things went down so fast and quite so uniformly around the world.

Both recognize that we're in a new era of chaos. What's the landmark event that separates us from the past era of relative stability?

According to Soros, it's precisely the same event we forecast in 2007 and the same event we have repeatedly highlighted here in Money and Markets: The bankruptcy of Lehman Brothers. (See "Dangerously Close to a Money Panic," December 3, 2007 and "Closer to a Financial Meltdown," March 17, 2008.)

That was the final straw that punctured the already imploding bubble. And it was the first major domino that set off the chain reaction of events now careening out of control: The collapse of consumer credit markets ... surging unemployment ... and now, a new set of even larger financial failures looming.

The Raging Debate Right Now Is How To Prevent
A Banking Collapse: To Nationalize Or Not To
Nationalize. But It's A Moot Point.

Based on the analysis we presented here in August 2008 ("The Next Big Failures") ...

Based on the frank recognition of the catastrophe by Soros and Volcker on Friday ...

And based on the trillions in government bailout funds already spent, lent or guaranteed ("The Obama Stimulus: Truth and Consequences") ...

The fact is that the banking collapse has already occurred!

So the relevant question is not "How can we prevent it?" Instead, it's "How can you protect yourself from the inevitable fallout?"

Washington and Wall Street, however, are either too cowered or too confused to give you the answers you need.

They won't tell you which banks are the most likely to fail or which ones are the most likely to survive.

They won't offer you alternative safe havens for your money.

They won't even guide you to publicly available information provided by the U.S. Treasury Department itself.

I believe in Temasek. Overall, they did not fare too bad. Still made a bit in the 5 year cycle

Investment with such a big funds is never easy. With transparency in place, there are advantages and disadvantages. There might be pressure for future investment to focus on shorter term like many listed companies are. However, it can instill confident that our money are managed properly.

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