Finance Minister Tharman Shanmugaratnam said any view of Temasek's track record as an investor should not be based on any individual transaction but on how it had performed over the years.

"Temasek is a long-term investor... but being a long-term investor does not mean being locked into every individual investment, regardless of major changes in the environment or a new investment proposition," he told parliament.

"This means that Temasek may divest an investment, even at a loss, to get a better mix of risks for its overall portfolio or to position itself to take advantage of opportunities elsewhere."

Shanmugaratnam said Temasek incurred losses on some of its investments, including the one in Bank of America, but did not provide any details on the size of the loss.

Industry estimates put Temasek's losses at US$4.6 billion after it sold its entire 3.8 percent stake in Bank of America for US$1.3 billion.

Temasek had acquired the stake after Bank of America bought Merrill Lynch following last year's shake-up in the US financial market due to a housing mortgage crisis.

Temasek had earlier paid US$5.9 billion for a 14 percent stake in Merrill before it was taken over by Bank of America on January 1.

Shanmugaratnam said that despite a S$58 billion fall in the value of Temasek's portfolio between March and November 2008, the company's investments had grown by S$114 billion over five years from 2003.

"This means that even after taking into account the recent sharp decline, Temasek's portfolio had still grown by S$56 billion over the course of the (five-year) cycle," the finance minister said.

"What matters however is not how Temasek did in this last year, when the markets were in collapse, but how it has done over the cycle as a whole," he said.

"It is also not realistic to expect it to avoid losses on every individual investment, or losses on its overall portfolio when the markets go through sharp corrections."

Temasek and the Government of Singapore Investment Corp are the city-state's state investment vehicles.

They have sunk billions of dollars into Western banks shaken by the US-born financial crisis and have since seen the value of the investments fall as share prices tumbled.

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