SINGAPORE, July 29 - Singapore state investor Temasek said on Wednesday its portfolio had fallen by S$40 billion as of end-March 2009 from a year ago.

“In our Temasek Review last year, we reported an annual value-at-risk of almost S$40 billion last March. This meant a 16 percent probability for our portfolio value to drop more than S$40 billion by March this year. Indeed, it has turned out to be so, and more,” CEO Ho Ching said in a speech.

Temasek had S$185 billion in assets as of end-March 2008, which fell to S$127 billion as of November 2008. Ho did not give the exact portfolio level.

This was the first public comment by Ho, also the wife of Prime Minister Lee Hsien Loong, after Temasek said last week that Charles “Chip” Goodyear will not become CEO due to differences over strategy.[ID:SIN435934]

Ho said Temasek would continue to look at internal and external candidates for her replacement.

Treasury- No comment on Temasek,investment welcome

WASHINGTON, July 29 (Reuters) - A senior U.S. Treasury official declined to comment on Tuesday on Singapore state-run Temasek Holdings’ [TEM.UL] likely expansion of its stake in U.S. investment bank Merrill Lynch & Co (MER.N: Quote, Profile, Research, Stock Buzz) but said the United States welcomed foreign investment.

“As a general perspective, investment in the United States has been a great driver of innovation and is something that we welcome. It is a great validation,” David McCormick, U.S. Undersecretary of the Treasury for International Affairs, told reporters after delivering a speech.

Merrill said on Monday it would raise $8.5 billion of fresh capital by selling new stock, including a $3.4 billion purchase by Temasek. (Reporting by Alister Bull; Editing by James Dalgleish)