Analysts estimate it has recovered to about $143b after 31% drop last year
By
Alvin Foo
Temasek also has a 'strong holding company balance sheet', with 'significant firepower to invest' and an estimated potential spending power of $31 billion, said Nomura. -- ST PHOTO: TAN SUAN ANN
TEMASEK Holding's portfolio rebounded by nearly 13 per cent from late November to mid-May as global financial markets recovered, according to an estimate made by Nomura analysts.
The share rally has given Temasek a much-needed boost after its net portfolio value was rocked by the financial tsunami.
It dropped $58 billion - from $185 billion to $127 billion - during the March 31 to Nov 30 period last year, a fall of 31 per cent.
But Nomura analysts Lim Jit Soon and Tsai Yuan Yiu noted in a Singapore strategy report out yesterday that Temasek's portfolio value had bounced back to around $143 billion as of May 15. This is a 12.5 per cent rise from the $127 billion seen in late November last year.
Finance Minister Tharman Shanmugaratnam told Parliament last week that Temasek had made 'large investment gains' during the market cycle, which began in 2003 and had included both boom and bust phases.
Its portfolio grew $56 billion from March 2003 to November last year even after taking recent sharp declines into account, averaging returns of slightly over 15 per cent a year.
Nomura said Temasek may trim its holdings in Singapore companies such as SMRT, SingTel, StarHub and Sembcorp Industries 'over the longer term'. 'This would be done opportunistically rather than under pressure.'
Temasek also has a 'strong holding company balance sheet', with 'significant firepower to invest' and an estimated potential spending power of $31 billion, said Nomura.
It added: 'While it is unlikely to gear up significantly, we think Temasek could use short-term facilities to finance its acquisitions, allowing time to divest other holdings when market conditions pick up.'
Read the full report in Wednesday's edition of the Straits Times
