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Temasek Holdings holds talks over Ant Group’s slashed valuation of its shares of US$150 billion to US$78.8 billion

Singapore’s state-owned investor, Temasek Holdings, seeks answers from Ant Group Co. regarding its diminished valuation before deciding on participating in a planned share buyback.

Rohit Sipahimalani, Chief Investment Officer at Temasek, confirmed this development in a recent interview with Bloomberg.

Temasek, one of Ant’s private shareholders, acquired shares in the Alibaba Group-affiliated financial company in 2018 when its value was estimated at US$150 billion.

However, the planned repurchase of stocks by Ant would slash the company’s value to approximately 567.1 billion yuan (US$78.8 billion), a drop that has prompted the need for talks between the two entities.

Ant’s valuation in the proposed buyback is almost 70% lower than its estimated US$280 billion market capitalization in 2020, before the scrapping of an IPO.

Sipahimalani stated, “With the recent developments around Ant, a line in the sand has been drawn and that should be good for the company.”

Temasek and other major shareholders have to determine whether they need liquidity or where they see the future prospects of the company.

This comes at a time when Temasek has been dealing with its own challenges. Earlier this week, the firm registered its worst performance in seven years, posting a decline of 5.1% for the fiscal year ending 31 March, with assets totalling S$382 billion (US$284 billion).

Simultaneously, Temasek, which holds about 22% of its net portfolio value in China, has expressed concerns about the Chinese market. Sipahimalani pointed to key challenges in China, such as consumer sentiment and property sector volatility, not forgetting geopolitical tensions with the U.S.

Despite these setbacks, Temasek has not entirely withdrawn from the Chinese market. It continues to back Chinese companies this year, increasing its holdings in U.S-listed shares of Alibaba and e-commerce rival JD.Com Inc. in Q1 of 2023.

In a further twist, Temasek has shifted away from its previous venture into the cryptocurrency market due to regulatory uncertainties.

This follows a decision to invest in crypto firm FTX, leading to a write-down of over US$275 million (~ S$369 million) in November 2022.

Reflecting on this experience, Sipahimalani indicated reservations about further investments in crypto exchanges, primarily due to the prevailing regulatory uncertainty.

However, he didn’t completely rule out future investments in this sector. “If you have the right regulatory framework and we are comfortable with it, and you have the right investment opportunity… there’s no reason for us not to look at it,” he concluded.

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