Jan 08, 2014

    Temasek bonds for individuals?

    TEMASEK Holdings is looking at ways to offer bonds to individual investors in Singapore.

    Issuing fixed-income products will provide an "alternative investment opportunity" for investors seeking stable returns with lower risks, Mr Stephen Forshaw, a spokesman for the company, said in a statement.

    It could join companies such as Singapore Airlines, Genting Singapore and Fraser & Neave, which have sold bonds to individual investors.

    The investment firm has a US$10-billion (S$12.7-billion) medium-term note programme where the securities are typically offered to institutions. The bonds have received top ratings from Standard & Poor's Ratings Services and Moody's Investors Service since 2004, according to Temasek's annual report published in July.

    "Temasek is less risky than other corporate issuers," Ms Marie-Anne Garcia, a credit analyst at OCBC Bank in Singapore, said by telephone.

    Temasek's assets rose to a record S$215 billion in the year ended March as surging stock markets drove an almost sixfold increase in returns, it said in the annual report released in July.

    The value of its holdings increased by 8.6 per cent in the fiscal year from S$198 billion, while total shareholder return, which includes dividends, widened to 8.9 per cent from 1.5 per cent in the previous year.

    The investment company's total shareholder return averaged 16 per cent since its inception in 1974. The average return was 4.9 per cent over a three-year period, and 13 per cent over 10 years, it said in the annual report.

    Temasek is mostly invested in stocks, according to the statement yesterday. The market value of its holdings may rise or fall by more than 30 per cent during volatile periods, such as the global financial crisis, Mr Forshaw said in the statement.

    "We are mindful that past opportunities and conditions are not likely to repeat in the coming decades," he said. "Furthermore, global structural risks remain."