Temasek upbeat on China as portfolio jumps by a fifth to record

Singapore state investment firm Temasek said the value of its portfolio jumped by almost a fifth to a record S$266 billion (HK$1.52 trillion) last financial year on the back of a surge in Chinese bank stocks and added it was confident in China’s long-term economic outlook.

The 19 per cent gain was Temasek’s largest in five years and reflected its investments in lenders such as China Construction Bank and Industrial and Commercial Bank of China as well as holdings in leading Singapore firms. The previous year, the value of its portfolio grew just 3.7 per cent.

Stocks in China surged last year after the country moved to open up its equity markets with a stock trading link between Hong Kong and Shanghai. But in the last three weeks, they have tumbled some 30 percent, prompting authorities to unleash a slew of support measures.

“We remain confident in the long-term prospect of the Chinese economy and we are very comfortable with the prospect of the Chinese banking system as well," Wu Yibing, Temasek’s head of China said at its annual review yesterday.

Wu said concerns about credit risks in China did not play out as feared last year.

“We actually not only stuck to our position. We increased our position in the Chinese banking system and we believe that has paid off,” he said.