Singapore Inc's roving eye targets local assets
It is Australia's fourth-largest foreign investor, behind the US, Britain and Japan, with about $50 billion worth of investments at the end of 2011, according to the Australian Bureau of Statistics.
Through its investment arm, Temasek, the Singapore government indirectly has a stake in Australia's second-largest mobile carrier, Optus. And through Temasek's 56 per cent holding in Singapore Airlines, it is about to become a key investor in Virgin Australia.
The most controversial Singaporean foray into Australia is the failed effort by the Singapore Stock Exchange to acquire ASX more than two years ago.
Treasurer Wayne Swan rejected the idea and said the deal was not in Australia's "national interest".
There was deep suspicion over Singaporean state involvement in SGX, which is 23 per cent owned by the government. Lee Hsien Yang, son of the founder of the republic, Lee Kuan Yew, and the brother of the current Prime Minister, is not only a director of SGX but also the former boss of SingTel, the parent company
of Optus.
There also was fear that the island state wanted to achieve its dream of becoming a financial hub in the Asia-Pacific region at Australia's expense. It is widely believed in Canberra that the Singaporean government could exercise undue influence over the merged entity.
Aside from the failed attempt to take over ASX, the reach of Singapore Inc extends far into such other sectors of the economy as utilities, property and agribusiness.
The state-owned Singapore Power is a big player in the Australian utilities market and owns electricity and gas transmission networks across eastern states.
Singapore Power bought the assets of Alinta in 2007, when the company was in trouble, and its assets are estimated to be more than $10 billion.
Singapore's agribusiness giant Wilmar International also took over the country's largest sugar producer, Sucrogen, in 2010 for $1.75 billion. Temasek is also an active player in the Australian property market with billions in assets.
Frequently Asked Questions about this Article…
“Singapore Inc” refers to Singapore's network of state-linked companies and sovereign investors (notably Temasek). According to the Australian Bureau of Statistics cited in the article, Singapore was Australia’s fourth-largest foreign investor with roughly $50 billion of investments at the end of 2011, spanning sectors such as aviation, telecommunications, utilities, property and agribusiness.
Temasek is Singapore’s investment arm and is actively involved in Australia. The article notes Temasek has an indirect stake in Optus (Australia’s second-largest mobile carrier) and, via its 56% holding in Singapore Airlines, was positioned to become a key investor in Virgin Australia. Temasek is also active in the Australian property market with billions in assets.
Yes — through Temasek, the Singapore government indirectly holds a stake in Optus, which is Australia’s second-largest mobile carrier. For everyday investors, that means a major foreign investor has exposure to Australian telecommunications assets and may influence strategic decisions in the sector.
The article explains that Temasek’s 56% holding in Singapore Airlines positioned Singapore-linked capital to become a key investor in Virgin Australia, tying Singaporean aviation interests to Australia’s domestic airline industry.
More than two years before the article, the Singapore Stock Exchange attempted to acquire the Australian Securities Exchange (ASX). Treasurer Wayne Swan rejected the proposal, saying it was not in Australia’s “national interest.” Concerns included Singaporean state involvement in SGX (the government owns about 23%) and fears the merged entity could be subject to undue influence or that Singapore sought regional financial-hub ambitions at Australia’s expense.
Singapore Power, a state-owned company, is a significant player in the Australian utilities market. It purchased the assets of Alinta in 2007 when Alinta was struggling and now owns electricity and gas transmission networks across eastern states; those assets are estimated to be worth more than $10 billion.
Yes. The article highlights that Singapore agribusiness giant Wilmar International acquired Australia’s largest sugar producer, Sucrogen, in 2010 for $1.75 billion, showing Singaporean interest in Australian agribusiness assets.
The article outlines several concerns: public and government unease about strategic foreign ownership (especially after high-profile attempts like the SGX-ASX bid), worries that state-linked Singapore entities could exert undue influence over merged or strategic assets, and sensitivity about foreign control in sectors such as aviation, telecommunications, utilities, property and agribusiness.
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