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.