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"It was a rollercoaster ride. It's like a bungee jump, but it bounced back. Fundamentals of real economies are sound." -- ST PHOTO: JOYCE FANG
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DAVOS (Switzerland) - SINGAPORE'S sovereign wealth funds (SWFs) are open and invest commercially to pursue long-term returns, Prime Minister Lee Hsien Loong told Reuters on Friday.
He added that the SWFs will further improve their transparency.
Mr Lee, speaking on the sidelines of the World Economic Forum, also said Asian capital markets had experienced a rollercoaster ride this week but he hoped that this would not seriously affect real economies of the region.
Singapore's investment fund GIC injected $7 billion (S$10 billion) into Citi in January and bought up to 9 per cent of UBS for $9.75 billion in December.
Temasek, another investment arm of Singapore, provided fresh capital to Merrill Lynch in December and already has stakes in Barclays and Standard Chartered.
Mr Lee brushed off suggestions that sovereign wealth funds lacked transparency, saying the GIC and Temasek were transparent in their disclosures.
'We are quite open about what we do and what our intentions are and also the way we have the governance ... (Our policy is) not to make bold and exciting moves but move cautiously and preserve the value, invest commercially for long-term sustainable returns,' Mr Lee said.
Temasek has published audited annual reports since 2004.
'The GIC... has been much more circumspect about disclosure but going the forward we've decided to (do) more,' Mr Lee said.
Bungee Jump
Asian markets suffered sharp falls earlier this week as worries over the US recession rattled investors.
In India, for example, falls on Tuesday were so sharp that they triggered automatic circuit breakers and halted trading for one hour.
'It was a rollercoaster ride. It's like a bungee jump, but it bounced back. Fundamentals of real economies are sound,' Mr Lee said.
'There is no decoupling of markets possible. Once the US market goes down ... it affects markets all over the region. The big question is whether it affects real economies all over Asia? We are hopeful we have some buffer.'
The island's economic growth slowed slightly last year from 7.9 per cent in 2006 and Mr Lee affirmed a further slowdown in 2008.
'We see it coming off. We had 7.5 per cent last year, this year we forecast somewhere between 4.5-6.5 per cent. Obviously there is some uncertainty because we don't know how the US economy will perform and it will affect us,' Mr Lee said. -- REUTERS
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