Business

Tuesday September 23, 2008 MYT 2:10:13 PM

Singapore govt's Investment Corp says: financial turmoil may not be over


SINGAPORE: A Singapore sovereign wealth fund that bought large stakes in banks UBS AG and Citigroup Inc. warned Tuesday that the worst of the U.S. financial crisis may not be over even if Washington implements a US$700 billion bailout plan.

The Government of Singapore Investment Corporation, or GIC, said the current turmoil in the U.S. banking system will likely undermine the future earnings of the fund, which manages more than US$100 billion.

GIC refused to be more specific.

"The proposal put forth by the U.S. Treasury should stabilize the markets to some extent,'' said GIC Deputy Chairman and Executive Director Tony Tan at a news conference.

"But we should not assume the worst is over. Financial markets and the economic situation have deteriorated significantly in the last five months.''

GIC also regretted the timing of its investment in the two banks - US$9.75 billion in UBS in December and US$6.9 billion in Citigroup in January - said Chief Investment Officer Ng Kok Song.

"We would have liked the timing of the investments to be better,'' Ng said.

"But these are long-term investments.''


For another perspective from The Straits Times, a partner of Asia News Network, click here.


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