SINGAPORE: Singapore's Temasek Holdings said market valuations had not yet priced in a global economic recession and that the state investor was waiting for further declines before stepping up investments.
On Friday September 30th, Sipahimalani told the Milken Institute Asia Summit in Singapore that current valuations don't reflect the risk of downturn we see in the next 12 to 18 months.
Temasek is committed to four major investment trends, including digitisation, longer lifespans, sustainable living and the future of consumption, he said.
He said that the trends are still valid. For the long term, we will continue investing alongside them with a few nuances. Stock markets have fallen sharply this year as interest rates increase due to inflation-fighting central banks raise concerns about a recession or economic slowdown.
Sipahimalani said the markets had not predicted a major decline in earnings and instead were focusing on growth in 2023.
Even in a mild recession, you will probably see a double-digit decline in earnings, he added, adding that earnings could decline by as much as 15 per cent.
Temasek is mainly anchored in Asia and has a 63 per cent exposure to the region as measured by the underlying assets of its portfolio companies, most of which are in Singapore and China.
The UK hasn't been a significant investment destination for us, said Sipahimalani.
The main areas we have seen happen in markets like the US and China are digitisation or longer lifespans, health tech, biotech or sustainable living. Sipahimalani said that Temasek remains bullish on China in the long term based on its investment themes.