GIC and Temasek have small exposure to Russia, says newsletter

SINGAPORE sovereign funds GIC and Temasek have a "surprisingly'' small exposure to Russia, said the Global SWF Times in its March newsletter.

The newsletter tracks exposures and activities of various state-owned investors (SOIs).

A listing of SOIs' Russia weightings shows Temasek with US$0.3 billion in holdings, equivalent to 0.1 per cent of its portfolio. GIC's exposure is listed as US$0.2 billion. Their response to the fast-moving crisis is listed as "monitoring".

On Tuesday, Temasek told The Business Times that its exposure to Russia and Ukraine was "insignificant". It will comply with legal and regulatory obligations, including sanctions, in the jurisdictions it invests and operates in.

Singapore on Feb 28 announced plans to impose sanctions on Russia, including the blocking of certain Russian banks and financial transactions connected to Russia.

The Global SWF newsletter said sovereign funds have varying degrees of exposure to Russia and the Commonwealth of Independent States (CIS). Middle Eastern funds have raised their allocation into the region in the past few years. European and North American pensions have been divesting positions due to geopolitical risk.

Since Russia began to mount attacks, SOIs such as Norway's NBIM and PensionDanmark announced their exit of Russia investments.

Most of their exposure comes via government bonds and stakes in major conglomerates - Gazprom, Rosneft, Lukoil (O&G), Alrosa and Polus (mining), and VTB and Sberbank (financial services). On average, according to the newsletter, the seven most popular stocks among sovereign funds lost 63 per cent in value between Feb 15 and 28.

Global SWF estimates that foreign SOIs hold US$44 billion or 0.14 per cent of their capital in Russian investments.