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‘Short-term’ brexit volatility had ‘fairly modest’ impact: Temasek

SINGAPORE — Temasek said on Thursday (July 7) that market volatility post-Brexit had only a “fairly modest” impact on its portfolio, and that it was not overly concerned about the short-term gyrations in the markets, given that its focus is on the long term.

Temasek Holdings reported its financial earnings for FY15/16 on Thursday (July 7). PHOTO: Lee Yen Nee

Temasek Holdings reported its financial earnings for FY15/16 on Thursday (July 7). PHOTO: Lee Yen Nee

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SINGAPORE — Temasek said on Thursday (July 7) that market volatility post-Brexit had only a “fairly modest” impact on its portfolio, and that it was not overly concerned about the short-term gyrations in the markets, given that its focus is on the long term. 

As of March 31 this year, Europe accounted for about 8 per cent of the firm’s S$242 billion portfolio. It did not reveal its direct exposure to the United Kingdom, but said that it was “even smaller” and predominantly through its holdings in Standard Chartered bank.

Temasek is Standard Chartered’s biggest shareholder, with close to a 20 per cent stake. 

“While (StanChart) is listed in London, it does not have substantial banking exposure in the UK. We remain focused on the long term, so the short-term volatility from the last couple of weeks is not our focus,” said Mr Michael Buchanan, Temasek’s head of strategy and senior managing director, portfolio strategy and risk group, on Thursday (July 7).

However, Mr Buchanan warned that an incident like Brexit would weigh on confidence going forward. 

“Any time you have this type of political uncertainty, it’s going to weigh on confidence, both business confidence and consumer confidence, and we were already seeing that in the run-up to the referendum. We saw declines in PMI (Purchasing Managers’ Index) and other measures of confidence, so that is likely to continue,” he said. 

“In terms of the spillover onto Europe, I would put Brexit more in the context of it (being) one example of the Euroscepticism that is playing out in many different ways, rather than spilling over very directly elsewhere,” he added.

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