(Adds analysts’ comment)
* Temasek chief leaves after five years as CEO
* Former BHP CEO Goodyear to take over from Oct 1
* Move seen as building Temasek’s international image
By Kevin Lim and Saeed Azhar
SINGAPORE, Feb 6 (Reuters) - Ho Ching will step down as chief executive of Singapore state investor Temasek after a five-year stint, following a period of turmoil in global markets that has slashed the value of its investments.
Chip Goodyear, the former chief executive of BHP Billiton (BHP.AX) (BLT.L), will replace Ho, the wife of Singapore Prime Minister Lee Hsien Loong, on Oct. 1 as the sovereign wealth fund tries to build a more international image and move more aggressively into resources.
Goodyear will be the first foreigner to run Temasek, the smaller of Singapore’s two sovereign wealth funds. The Government of Singapore Investment Corp (GIC) manages an estimated $300 billion.
Temasek, which had assets worth S$185 billion ($123 billion) as of March 2008, had 40 percent of its portfolio in financials and is nursing losses from high-profile investments in Merrill Lynch and Barclays (BARC.L) as it aggressively expanded outside its core Asian market.
“These are turbulent times, and I‘m sure she must have had a stressful time this year,” said David Cohen, economist at Action Economics in Singapore.
Temasek’s $5 billion plus investment in Merrill alone has resulted in a paper loss of more than $2 billion. Temasek currently owns 3.8 percent of Bank of America (BAC.N), which took over Merrill. Banks around the world have written off $1 trillion in assets, and many stocks are trading at their lowest for several years.
Under Ho’s watch, the fund also made a controversial $1.9 billion acquisition of Thai telecom firm Shin Corp from the family of then prime minister Thaksin Shinawatra in early 2006 which triggered a street campaign that led to Thaksin’s ouster.
The fund also got into trouble in Indonesia, where it was accused of violating competition law through its indirect control of the country’s two largest mobile phone operators.
Temasek has been viewed in some quarters as too close to the Singapore government, in part because of Ho’s relationship with the prime minister, making host countries wary of its investments.
“When you look at any issue, there are always pros and cons. The main thing is that I have had the privilege of working with a wonderful team,” Ho told reporters on Friday.
“We have a strong balance sheet. This was built up over the years, and we continue to build on it,” she added.
Temasek controls some of Singapore’s biggest companies, including Singapore Airlines (SIAL.SI) and Singapore Telecommunications (STEL.SI), and has stakes in global firms such as Britain’s Standard Chartered (STAN.L) and India’s ICICI (ICBK.BO).
Temasek Chairman S. Dhanabalan said 55-year-old Ho’s decision to step down was not linked to performance and it was too early to determine if investments made in the last two years would lose money in the long term.
“The team has already embarked on a different stance since mid-2007, and has begun to review its long-term plans under different scenarios prompted by the economic downturn,” Dhanabalan said at a media briefing.
“If we are to bring in new leadership, it would be just as good a time as any to involve a new leader in this review.”
Goodyear, 51, left BHP Billiton in early 2008. He joined Temasek’s board on Sunday. Goodyear started his career as an investment banker at Kidder Peabody, where he advised corporations on mergers and acquisitions and financing, and he was CFO at BHP before becoming CEO.
“It is interesting, given his background; it will inevitably raise questions if Temasek is interested in the resources sector,” said Matthew Whittall, resources analyst at CLSA in Hong Kong.
The move also comes after Temasek last year said it was looking for investments in Brazil and Mexico to tap growth in Latin America’s emerging economies and booming demand for commodities.
Ho Ching, who will also resign from the Temasek board, joined Temasek as a director in January 2002 and has been CEO since January 2004. [ID:nSP85829] ($1=1.504 Singapore Dollar) (Additional reporting by Singapore bureau and Joseph Chaney in Hong Kong, editing by Will Waterman)