SINGAPORE (July 5): The pressure is on for Singapore’s sovereign wealth fund GIC.
In May, GIC received an injection of funds totalling $45 billion from the Monetary Authority of Singapore. The funds are derived from MAS’ official foreign reserves, which the central bank had deemed as excess OFR that could be put to better use under GIC.
Now, all eyes are on GIC to generate attractive and sustainable returns.
However, the sovereign wealth fund earlier this week warned it is now more cautious about the investing environment than it was last year – and is bracing for low returns.
Among the main reasons for GIC’s cautious stance is the unresolved trade conflict between the US and China. While both sides have recently avoided an escalation of the conflict, a trade deal remains to be signed.
“We’re concerned that this can turn out to be a very prolonged scenario of a kind of inability to agree to a deal, resulting in de-globalisation and resulting in companies needing to change the way they operate,” says GIC CEO Lim Chow Kiat.
However, GIC says it continues to see opportunities in Asia, despite the challenging outlook.
Where are the investment opportunities it sees developing in the region?
Subscribers can log in to find out in our story, “GIC cautious in light of challenging investment outlook; returns for 20-year period at 3.4%”, in The Edge Singapore (Issue 889, week of July 8), which is available at newsstands now.
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