SINGAPORE: The Government of Singapore Investment Corp, one of the world's biggest sovereign wealth funds, has bought a 5 percent stake in commodities trader Bunge Ltd worth $496 million, according to a regulatory filing.
The purchase is another sign that Asian sovereign wealth funds (SWFs) are increasing their bets on resources.
Sovereign investors, hurt by investments in Western banks during the 2008 financial crisis, have been moving away from financial services into new sectors such as commodities and infrastructure.
In recent years, China Investment Corp (CIC) and Korea Investment Corp have both bought shares in Asia's biggest commodities supplier, Noble Group, while Singapore's Temasek Holdings bought a stake in Olam International .
On Wednesday, Goldman Sachs said it was lowering its 12-month commodity returns forecast to 12 percent from 15 percent, saying that commodities had rallied substantially heading into 2012.
GIC said in a filing to the Securities and Exchange Commission, dated Feb 23, it had bought 7,305,865 shares of the New York-listed agricultural trading firm, valuing its stake at $496 million.
It did not say what price it paid for the stake.
A source familiar with the matter told Reuters the purchase was "a gradual buildup", explaining that the increase in its shareholding in Bunge came over a period of time.
The source did not disclose when GIC first bought the stake in New York-listed Bunge. GIC also owns a stake in commodities trader Glencore through convertible bonds and shares.
Earlier this month Bunge reported a higher-than-expected fourth quarter profit, benefiting from higher prices and volumes in sugar cane milling and better results in oilseed processing in Asia, Europe and South America.
The performance was better than rivals Archer Daniels Midland Co and Cargill, which reported weaker-than-expected results due to volatile markets and economic uncertainty.
"It is interesting that the SWFs are the ones who have the long view and they still see the attraction of having exposure to agriculture," said a Singapore-based analyst at a foreign brokerage firm, who asked not to be identified because he was not authorised to speak to the media.
"You would not expect people to make a big investment in this space after the terrible results that we have seen."
GIC is estimated to hold about $250 billion in assets and is ranked as the world's eighth-biggest sovereign wealth fund by the Sovereign Wealth Fund Institute.
GIC owns 6.45 percent of UBS AG and 3.86 percent of Citigroup Ltd, despite cutting its holdings of shares in developed markets to 34 percent of its portfolio from 41 percent in the fiscal year to the end of March, its annual report shows.
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