Temasek raises stake in China's JD.com

MR LEE THENG KIAT, executive director and chief executive of Temasek International (above), in the firm's annual review.
MR LEE THENG KIAT, executive director and chief executive of Temasek International (above), in the firm's annual review.ST PHOTO: MARK CHEONG

Shares of e-commerce firm have fallen 36% this year, wiping $22b off its market value

Temasek Holdings has raised its stake in Chinese e-commerce firm JD.com, taking advantage of a rout in its share price.

Latest quarterly filings from the Securities Exchange Commission (SEC) in the United States show that Temasek raised its stake in JD.com from 0.54 per cent to about 0.64 per cent.

JD.com's shares have dropped 36 per cent this year, wiping out almost US$16 billion (S$22 billion) in market value.

The SEC filings show that among Temasek's largest US-based investments is another Chinese e-commerce player, Alibaba, with a stake valued at about US$3.7 billion.

China remains part of the investment firm's plans despite fears over a protracted slowdown and a debt overhang that some say could trigger the next financial crisis.

CHALLENGING ENVIRONMENT

In general, we see a more volatile market with a more challenging environment going forward... Meanwhile we are quite comfortable with the resilience of our portfolio.

MR LEE THENG KIAT, executive director and chief executive of Temasek International, in the firm's annual review.

In its annual review on Thursday, Temasek reiterated that it sees long-term growth potential in China despite Chinese stocks taking a big hit earlier this year.

Temasek reported a 9 per cent fall in its portfolio value, the first decline in seven years and the worst since the financial crisis.

"In general, we see a more volatile market with a more challenging environment going forward," said Temasek International executive director and chief executive Lee Theng Kiat.

"Meanwhile we are quite comfortable with the resilience of our portfolio."

Temasek Holdings also said during its annual review that it invested US$3 billion in a hedge fund managed by former GIC executives last year.

Avanda Asset Management was started by several former senior executives of the sovereign wealth fund, including Mr Ng Kok Song, its former chief investment officer, its former chief risk officer Sung Cheng Chih and its former president of asset management Quah Wee Ghee.

It was also partly seeded by funds from GIC.

The firm's Avanda Global Multi- Asset Fund trades bonds, equities and currencies with the multi- pronged strategy bearing a similarity to those plied by many hedge funds, Bloomberg reported.

It is not the first time Temasek has invested in hedge funds.

In 2014, it went into a partnership with Dymon Asia Capital, which backs new hedge fund managers and strategies. The investment firm committed $500 million to the venture.

In 2009, Temasek set up a wholly owned company called Seatown Holdings with a committed capital of more than $4 billion to invest in assets across the world, including stocks and bonds.

A version of this article appeared in the print edition of The Straits Times on July 09, 2016, with the headline 'Temasek raises stake in China's JD.com'. Print Edition | Subscribe