Temasek Holdings cut losses on Chinese education and tech stocks while reducing its stakes in Alibaba Group Holding and Didi Global in the third quarter, after entering a regulatory minefield and a worldwide sale.
The Singapore State investment arm sold all of its US custodian shares in Kanzhun, TAL Education, New Oriental Education Technology, after accumulating positions in them in the second quarter, according to its 13F file with the Securities and Exchange Commission Monday night.
It also pulled out of Baidu and reduced its stake in Alibaba, which owns the South China Morning Post, and Didi Global, among the biggest Chinese tech giants to suffer from China’s antitrust crackdown that has eroded more than $ 1 trillion in market capitalization in the United States, Hong Kong and the mainland.
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Those six ADRs fell from 9% to 81% in the third quarter, according to Bloomberg data. On average, Temasek may have made about $ 160 million in losses on them, according to the Post’s calculation based on the IPO and the declines in those stocks during the quarter.
“We do not comment on specific activities around the holdings of our portfolio companies,” a spokesperson for Temasek said in an email response to To post Tuesday. “As an active investor, we are used to rebalancing our portfolio from time to time. “
Temasek is currently suspending further investment in Chinese tech companies due to uncertainty surrounding Beijing’s crackdown on the industry, Nikkei Asia reported on Monday, citing an interview with a senior executive. The Chinese government wants to tackle issues like the monopoly power of big tech platforms, data privacy and income inequality.
“It’s just that in China the way it’s executed has been a bit more brutal and quicker, and that’s why it’s created a lot of shock there,” said chief investment strategist Rohit. Sipahimalani in the report. Temasek will wait to deploy more capital until there is more regulatory clarity in this space, he added.
China began cracking down on the growing influence of powerful corporate groups a year ago, foiling Ant Group’s hit list and investigating antitrust violations at Alibaba and other platform operators. Internet. China then pushed the “Common prosperity” program to promote the distribution of wealth, prompting companies and tech moguls to set aside corporate profits and personal wealth for social services.
Ridesharing giant Didi Global was subjected to a cybersecurity review in July, two days after its US stock offering, sparking massive sales in the industry, while after-school tutoring companies also have been banned from making a profit this month.
Temasek’s 13F dossier on Monday listed investments in at least nine Chinese companies. In further portfolio adjustments in the third quarter, it bought more ADR from 17 Ed & Technology Group, Beigene, Gracell Biotechnologies, Pinduoduo and ZTO Express and maintained its stakes in Tencent Music Entertainment and 21Vianet Group.
In total, Temasek listed stakes in 91 companies with a combined market value of US $ 28.6 billion at the end of September, compared to 99 companies with a value of US $ 34.3 billion at the end of June. . They were a small part of the S $ 381 billion (US $ 281.6 billion) in assets he managed on March 31.
Temasek had about 27% of its assets invested in China in July, unchanged from March, according to its July investment review. China remains Temasek’s largest allocation by geography outside of its home base.
Additional reporting by Zhang Shidong
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