Temasek Holdings believed that its stock holdings on China would remain resilient against the current interbank credit crunch. The Singapore-based investment company also believed that structural changes in China may also yield favorable investment climate for both public and private enterprises.
Temasek Holdings' optimism is remarkable when considering how fast other foreign investment banks are letting go of their stock holdings and cutting back on their direct exposure to China's banking sector. The recent interbank crisis made many investors nervous.
The squeeze is said to be a preview of what is yet to come for China -greater and more damaging instability in China's banking sector, especially if the country would continue to implement capital controls and push for liberalising interests.
Experts agreed at the how great the risk Temasek Holdings is engaged in by holding on to China's securities.
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