22 June 2012
HONG KONG - Singapore investment giant Temasek Holdings expects smaller returns for the asset management industry amid a very difficult outlook with the United States market posing considerable risks, according to its President, Mr Gregory Curl.
"We're interested in sustainable returns over what we believe is going to be a very difficult and volatile environment for a number of years globally. Going forward, we would expect that returns will be between one-half and two- thirds of what they have been historically," Mr Curl said yesterday, referring to the returns for asset managers.
"We are still confident that the 70 per cent of our portfolio that's in Asia will perform at a level in excess of other geographies," he said.
Temasek, which sold its Bank of America shares at a multi-billion dollar loss about three years ago, said it had "no position" in the US financial industry. Investments in the US are held mainly in energy and agriculture, Mr Curl said.
The Federal Reserve on Wednesday slashed its estimates for US economic growth this year to a range of 1.9 to 2.4 per cent, down from an April projection of 2.4 to 2.9 per cent.
In addition, Fed officials said they expected the US job market to make slower progress than they forecast only a few months ago, with the unemployment rate now seen hovering at 8 per cent or higher for the rest of this year.
The Fed expanded its "Operation Twist" by US$267 billion (S$339 billion), meaning it will sell that amount of short-term securities to buy longer-dated ones to keep long-term borrowing costs down.
The programme, which was due to expire this month, will now run through the end of the year. AGENCIES
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