S'pore's Temasek pauses new investments in some Chinese internet platforms

Temasek will wait for more regulatory clarity.

Low Jia Ying | November 16, 2021, 05:30 PM

Editor's note: This article has been amended to reflect the Temasek chief investment strategist's comments and the state investor's statement. An update to this article can be read here.

Singapore's state investment arm Temasek Holdings will not be making any new investments in some Chinese internet platforms until Beijing provides clearer regulations on the sector, Nikkei Asia reported on Nov. 15.

Beijing has been cracking down on tech companies since 2020, causing new shocks and instability in share prices with each new regulation, according to Bloomberg.

Temasek's Chief Investment Strategist Rohit Sipahimalani told Nikkei Asia that Temasek will be waiting for more regulatory clarity from Beijing before making any new plays in Chinese internet platforms.

Temasek's Chinese investments surpass those at home

Temasek has been ramping up its Chinese investments over the years, so much so that its Chinese investments now outweigh those made in Singapore, according to figures released by Temasek in March this year.

Temasek is still overall positive about investment opportunities in China.

Earlier in 2021, Temasek had made substantial investments in both education and tech firms in China, including a big stake in ride hailing company Didi Global, South China Morning Post (SCMP) reported.

According to Nikkei Asia, Temasek has also backed Alibaba Group, Tencent Holdings and fintech giant Ant Group.

However, these companies have since come under intense scrutiny by the Chinese government, causing share prices to tumble.

In February 2021, then-deputy CEO of Temasek Dilhan Pillay Sandrasegara said Temasek was still optimistic on the long-term trajectory of China's markets, despite the Chinese government's crackdown on tech giants, reported Bloomberg.

China has clamped down on online gaming and even the private tuition industry in recent times, effectively putting a lid on profiteering by private companies, which has been characterised as occurring at the expense of wider society.

Temasek exits Chinese education stocks, reduces positions in Alibaba and Didi

According to SCMP, Temasek sold off all of its American depository shares in Baidu, Kanzhun, TAL Education, New Oriental Education Technology and reduced its holdings in Alibaba and Didi Global.

Temasek's Chief Investment Strategist Rohit Sipahimalani said Temasek would be holding off on making new investments in Chinese tech companies until they get more clarity on China's regulations on the sector, Nikkei Asia reported.

Addressing the crackdown on Didi Global, Sipahimalani told Nikkei Asia that it is currently unclear what exactly are the regulations that the company has to follow, making it "difficult" for Temasek to invest in Didi.

He added that once it becomes clearer what these regulations are, it would be better able to assess the impact to businesses like Didi, and whether it is worth investing in.

However, Sipahimalani said China still remains a focus for Temasek, specifically because of its "high growth spaces" such as electric vehicles and renewable energy, reported Nikkei Asia.

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Top image via Temasek