Singapore’s Appetite in Australian Assets
While the government and public are jittery about Chinese state-owned investors buying mines and farms in Australia, Singapore Inc is snapping up shares in strategic industries, from aviation to telecommunications.
It is Australia’s fourth-largest foreign investor, behind the US, Britain and Japan, with about $50 billion worth of investments at the end of 2011, according to the Australian Bureau of Statistics.
Through its investment arm, Temasek, the Singapore government indirectly has a stake in Australia’s second-largest mobile carrier, Optus. And through Temasek’s 56 per cent holding in Singapore Airlines, it is about to become a key investor in Virgin Australia.
The most controversial Singaporean foray into Australia is the failed effort by the Singapore Stock Exchange to acquire ASX more than two years ago.
Treasurer Wayne Swan rejected the idea and said the deal was not in Australia’s ”national interest”.
There was deep suspicion over Singaporean state involvement in SGX, which is 23 per cent owned by the government. Lee Hsien Yang, son of the founder of the republic, Lee Kuan Yew, and the brother of the current Prime Minister, is not only a director of SGX but also the former boss of SingTel, the parent company of Optus.
There also was fear that the island state wanted to achieve its dream of becoming a financial hub in the Asia-Pacific region at Australia’s expense. It is widely believed in Canberra that the Singaporean government could exercise undue influence over the merged entity.
Aside from the failed attempt to take over ASX, the reach of Singapore Inc extends far into such other sectors of the economy as utilities, property and agribusiness.
The state-owned Singapore Power is a big player in the Australian utilities market and owns electricity and gas transmission networks across eastern states.
Singapore Power bought the assets of Alinta in 2007, when the company was in trouble, and its assets are estimated to be more than $10 billion.
Singapore’s agribusiness giant Wilmar International also took over the country’s largest sugar producer, Sucrogen, in 2010 for $1.75 billion. Temasek is also an active player in the Australian property market with billions in assets.