Singapore's Temasek reports record profit

Temasek's net profit rose to 18.2 billion Singaporean dollars ($12.8 billion) for the year ending March 31 from 9.1 billion Singaporean dollars a year earlier, it said in a statement.

Temasek Chairman S. Dhanabalan said the global credit crisis will drag on the American, European and Asian economies, with low growth and high inflation threatening to hamper investment returns for even longer.

"We are concerned with the emerging risks of stagflation," Dhanabalan said in the statement. "This presents huge socio-political as well as economic risks in the next three to five years. Opportunities may be limited in such a scenario."

The government-run investment company's portfolio grew to 185 billion Singaporean dollars ($131 billion) from 164 billion Singaporean dollars in the year ending March 30, 2007.

Temasek didn't break down its profit, but did say part of it came from its sale of Singaporean electricity generator Tuas Power for 4.2 billion Singaporean dollars ($3.0 billion) in March.

Total shareholder return by market value was 7 percent in the year, the company said.

Temasek, which over the past year has bought a 9 percent stake in U.S. brokerage Merrill Lynch & Co., said it has shifted focus from Asian banks to those in the U.S. and Britain.

"Recently we've concentrated a bit more in the U.S. and U.K. because we see value," said Manish Kejriwal, a senior managing director said at a news conference. "The financial service industry is one we believe in."

The company declined to comment on whether it may invest in U.S. brokerage Lehman Brothers, which has been the subject of speculation that it could be taken over.