October 18, 2021

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Huge bets placed by Temasek in Chinese tech firms right before market plunge

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© The Independent Singapore

Singapore — Temasek Holdings Pte Ltd placed huge bets in a number of Chinese tech companies right before the market plunged last month.

Bloomberg Markets and Finance, which called the sovereign wealth fund a behemoth, says the state-owned investor’s timing “couldn’t have been worse.”

No one saw the share collapse coming, it added, and neither did anyone know the collapse would be so widespread, as it spanned from gaming to education and others.

The risks and uncertainties are higher than ever, Bloomberg added.

One example that showed how badly hit Temasek Holdings is, is ride-hailing service Didi Global Inc., whose shares have lost over 42 per cent of their value.

The biggest plunge in market value is in online education, as seen in the losses in the share prices of New Oriental and TAL Education, which have recorded losses of over 75 per cent.

In the second quarter of this year, Temasek also bought 644,919 shares of 17 Education & Technology Group Inc. 

In January, the company’s shares traded at over $18, only to plunge all the way down to $1.04 per share in the third quarter.

Temasek told Bloomberg, however, that it is taking a longer-term approach.


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“So we have to wait and see how much risk appetite there is for Temasek to hold on to these investments,” said Bloomberg’s Haslinda Amin.

Temasek has historically been an early investor in China’s tech firms, being one of the earliest to buy shares in Alibaba, for example, although whether the state fund will continue on this trajectory, given the latest market plunge, is yet to be determined.

China’s tech firms have been affected on two fronts—heavy crackdowns from Beijing and more intense scrutiny from regulators in the United States.

Bloomberg added, “China was Temasek’s biggest geographic source of investments as of March 31, making up 27% of its S$381 billion ($280 billion) portfolio.” /TISG

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