IT IS regrettable that Temasek Holdings' decision to sell its entire stake in the Bank of America (BoA) has resulted in one of the largest realised losses from a single investment in Singapore's history.
The loss is estimated to range between US$2.3 billion (S$3.4 billion) and US$4.6 billion.
Although it is easy to say that any investment involves risk, a large government-linked company like
Temasek can tap its pool of financial experts, who can make detailed analyses of a situation before sinking its funds into a big investment. This stands in contrast to an individual investor's approach to the market.
As the writer of a commentary in the press queried, did Temasek take sufficient measures to protect itself against downside risk?
What lessons can Temasek draw from this painful decision so that it can prevent subsequent losses and will not incur one as big as the BoA loss?
Most importantly, it should ensure that all its investment decisions are prudent, well-thought and as transparent as possible.
