A Singapore sovereign wealth fund has appointed a former World Bank President to its board, as it ramps up its reputation ahead of an American office launch.
(August 1, 2013) -- Temasek has appointed Robert Zoellick to
its board of directors, a man who formerly held the post of World Bank President
and worked as a US Trade Secretary.
Zoellick was president of the World Bank from July 2007
until June last year. Prior to this, he served as the US trade representative
in 2001 to 2005, during which America signed a free-trade agreement with
Singapore: its first in Asia.
The Singaporean sovereign wealth fund is understood to be
making efforts to ramp up its international reputation ahead of an office
launch in the US.
“Zoellick is probably
the most high-profile person that Temasek
has engaged and that says a lot about their global ambitions,” Wai Ho Leong, an
economist at Barclays in Singapore told Bloomberg.
“It’s potentially significant, depending on what they do
with that. It’s extending their feelers, at the very least, in the US space.”
Lim said in a statement on Temasek’s website: “[Zoellick]
brings a wealth of experience in international business, diplomacy and finance
that will be both welcome and valuable on our board.
“His appointment also comes at an opportune time, as Temasek
sets out to establish its first US office in the near future. Bob’s
insights will be especially helpful as we continue to explore opportunities in
US, Europe and also in the various growth markets.”
In the same statement, Zoellick praised the sovereign wealth
fund for its “strong corporate governance principles” and underlined his high
regard for Singapore as an international finance and business hub.
Temasek’s portfolio covers a broad spectrum of industries
and has produced a total return since inception in 1974 of 16% compounded
annually in Singapore dollar terms, or 18% in US dollar terms.
The company has had a corporate credit rating of AAA/Aaa
since its inaugural credit score in 2004, by Standard & Poor's and Moody's
In related news, Moody’s Investors Service has declared that
the assets contained in the sovereign wealth funds of all of the countries
composing the Gulf Cooperation Council (GCC) except for Bahrain now
exceed government liabilities.
GCC countries’ assets have recovered well after the oil
shock of 2009, reaching an aggregate $1.6 trillion in assets at the end of 2012
(equivalent to 107% of the aggregate GDP), up from $1 trillion in 2007.
This growth in sovereign wealth fund assets has reinforced
Moody's assessment of GCC governments' financial strength, given they could be
tapped if the world experienced a sharp decline in hydrocarbon prices.
However, other than Saudi Arabia, which reports its reserve
assets on a timely basis, the lack of transparent and timely reporting by other
sovereign wealth funds in the region makes Moody’s Investor Services concerned,
adding a degree of uncertainty to assessing the credit profiles of GCC
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