Singapore state investor Temasek Holdings said it does not expect last month’s liquidity crunch in Chinese banks to have an impact on its banking investments in the world’s second-largest economy.
“There is sufficient liquidity in the system, so we are not concerned abut a liquidity crunch over a prolonged period,” Chia Song Hwee, head of Temasek’s investment group and co-head of China, told a news conference on Thursday.
“The banks that we have invested in, they are actually very well capitalised.”
Temasek counts China Construction Bank as its second-largest investment with an 8 per cent stake in its portfolio. It has also invested about US$2.4 billion in Industrial and Commercial Bank of China since last year alone.
Chinese banks suffered an unprecedented cash crunch last month after the Chinese central bank allowed rates to shoot to record highs to punish banks for making risky loans and to force them to curtail dodgy lending.
Temasek also said it plans to step up investments in the United States and Europe and could take advantage of a restructuring in China by investing further in the world’s second-biggest economy.