Why not invest in Singapore?

Singapore’s Prime Minister Lee Hsien Loong’s wife Ho Ching is seventh on the Wall Street Journal’s list of “50 women to watch”. It said last week:

Ho Ching runs a portfolio of more than $134 billion at Singapore's state-owned investment firm, Temasek Holdings Pte. Ltd. And she is pushing Temasek, one of the world's most sophisticated sovereign wealth funds, further onto the global stage…

Ms. Ho is now reshaping Temasek from an Asia-focused deal machine into a global heavyweight -- selling some Asian assets, setting up outposts in Latin America and buying into Western banks.

Two days later, Reuters reported:

FountainVest Partners, backed by Singapore's Temasek Holdings, said that it had raised nearly $1 billion for its first China-focused private equity fund…

"Despite the global economic downturn, we are optimistic about China's long-term growth prospects," Frank Tang, co-founder and chief executive of FountainVest, was quoted as saying.

"We believe that the investment opportunities in China have just begun to emerge," said Tang, who was a senior managing director at Temasek.

How about fresh investments in Singapore? That would show the same optimism in Singapore’s long-term growth.

Of course, any investment has to make business sense. As the Temasek Holdings website says:

“Guided by an independent board, we operate autonomously on commercial principles to maximise long-term returns.”

But as the Wall Street Journal says:

Temasek's portfolio will undoubtedly suffer from declining equity markets world-wide given its heavy weighting in banks. Ms. Ho's biggest challenge will be to steer Temasek through the global financial crisis and keep its investments afloat.

Some of Temasek’s foreign investments have soured. ABC Learning Centres, the Australian childcare provider, collapsed. Merrill Lynch, Standard Chartered, Barclays – the banks in which it invested – have all been hit by the financial crisis.

So why not invest in new projects at home? Of course, any new enterprise takes time to succeed.

But Temasek Holdings should look at its own homegrown enterprises: Singapore Airlines, the world’s number one airline, SingTel, one of Asia’s largest telcos, DBS, Southeast Asia’s largest bank.

From business enterprises to educational institutions, Singapore has a history of producing winners.