GOVERNMENT of Singapore Investment Corp and Temasek Holdings, the nation's investment companies, can take advantage of financial turmoil to add assets instead of being forced into 'panic' sales, said Senior Minister of State for Finance, Mrs Lim Hwee Hua on Monday.

Volatile global equity, currency and credit markets have 'inevitably' affected investments of Singapore's reserves, she Parliament. Still, the reserves are invested in a diverse range of assets and with a long-term strategy, she said, reported Bloomberg news.

'The investment climate has indeed been challenging. Precisely because of the philosophy we have adopted, both GIC and Temasek are in comfortable position to take advantage of any opportunities that may arise from the current downturn,' said Mrs Lim.

Financial institutions worldwide have reported more than US$600 billion in losses and writedowns.

The credit crunch, triggered by a US housing slump, led Lehman Brothers Holdings Inc to file for bankruptcy and forced the sale of Merrill Lynch & Co to Bank of America Corp last month.

Temasek, the state-owned investment company with a US$130 billion portfolio, increased investments in Merrill Lynch and Barclays Plc as the credit market collapsed in the past year.

It's the biggest shareholder of London-based Standard Chartered Plc and Singapore's DBS Group Holdings Ltd., and owns stakes in India's ICICI Bank and lenders in Indonesia, South Korea and Pakistan.

GIC, the government's fund manager that oversees more than US$100 billion of Singapore's reserves, last month said it's turning to emerging markets, private equity and other asset classes to boost returns after cutting back stocks and investments in developed nations.

The fund spent US$18 billion on stakes in UBS AG and Citigroup Inc. in the past year.

'Our investments are well diversified across a wide range of assets and currencies, which has helped to mitigate risks to the overall portfolio,' Mrs Lim said.

'This strategy has served us well, so unless there are compelling reasons to depart from this long-term approach, the ministry will not direct GIC nor Temasek to change its portfolio approach.'