Temasek Holdings

Singapore’s Temasek assets rise 13.6pc to a record US$197b

Singapore state investment firm Temasek Holdings reported an upbeat year, with portfolio value rising to a record US$197 billion for the 12 months to March

PUBLISHED : Tuesday, 11 July, 2017, 6:19pm
UPDATED : Wednesday, 12 July, 2017, 2:17pm

Singapore state investment firm Temasek Holdings on Tuesday said the value of its portfolio rose on an improved global economic environment.

The firm said its portfolio value rose S$33 billion (US$23.84 billion) to a record S$275 billion in the year to March. In contrast, its assets had fallen to S$242 billion in 2016 from the previous year.

Net profit rose to S$14 billion from S$8 billion.

Total shareholder return for the year was 13 per cent, and 10-year and 20-year returns were 4 per cent and 6 per cent respectively, the firm said.

A more stabilised global economy, however, is not without challenges from the interplay of variables of stretched market valuations, liquidity and political risks.

As such, the firm said it would take a “cautiously positive” view moving forward.

“As we look ahead, global growth is likely to be supported by both emerging and mature economies,”

said Michael Buchanan, head of strategy at Temasek.

“This positive trend may already be reflected in market valuations, which now look a bit stretched.”

Nonetheless, Temasek has benefited from the equity rally in the past year.

It invested S$16 billion and divested S$18 billion, resulting in net divestment for the first time since 2009. New investment for the year included Ctrip, Amazon and Koubei, an Alibaba-affiliated platform for offline merchants in China.

The firm, which counts stakes in regional financial institutions such as Standard Chartered, China Construction Bank, Ping An Insurance (Group) and AIA Group, as well as in major Singapore companies such as Singapore Airlines and CapitaLand, has been expanding its exposure in the sharing-economy space in search of new growth engines.

“We continue to rebalance our holdings towards longer-term macro opportunities such as the transforming economies as well as emerging new trends such as the digital enablers for new businesses,” Temasek chairman Lim Boon Heng said.

The firm’s telecommunications, media and technology component now makes up 23 per cent of its portfolio, slightly down from 25 per cent in 2016, as financial services regained a bigger proportion of 25 per cent.

As one of the biggest major investors in Chinese commercial banks, Temasek said it was “comfortable” with the investments despite mounting credit risk concerns over Chinese lenders.

“The banks that we have invested in, we believe that they are well positioned to manage their credit risks,” said Chia Song Hwee, president of Temasek.

“The banks are also adjusting the way they have been doing business and earning their income with the transition of the Chinese economy from one of an investment-led to a consumption-and-service-led economy.”

Geographically, China continues to account for a substantial portion of the portfolio, at 25 per cent, followed by the US.

Alibaba owns the South China Morning Post.