Temasek portfolio value climbs to record $266b

The Temasek Holdings office.
The Temasek Holdings office. PHOTO: ST FILE

One-year total shareholder return hits 19.2%, on good showing in China, S'pore markets

Temasek Holdings has posted a record performance on the back of a strong showing in the Singapore and China markets in its last financial year. Its net portfolio value climbed to an all-time high of $266 billion as of March 31, surging $43 billion over the previous 12 months, it said yesterday.

The investment company's one- year total shareholder return - a measure of how hard its investment funds are working - was 19.2 per cent, making this one of the strongest years on record.

This measure includes dividends paid to its shareholder, the Finance Ministry, but not capital injections from the ministry. Temasek's shareholder did not make any net capital injections in the last financial year.

Chairman Lim Boon Heng said the April 2014 to March 2015 period was the most active year for the investment company since the global financial crisis. It made $30 billion worth of new investments, almost half in Asia, with the rest in North America and Europe.

Mr Ravi Lambah, senior managing director of investments, said Temasek's top sectors for new investments over the year were consumer products, financial services, life sciences and agriculture.

It made $30 billion worth of new investments, almost half in Asia, with the rest in North America and Europe. The company's top sectors for new investments over the year were consumer products, financial services, life sciences and agriculture.

These included a US$5.7 billion (S$7.7 billion) investment in consumer giant A.S. Watson, a US$800 million stake in US-based biopharmaceutical company Gilead Sciences, as well as investments in transportation network company Didi Kuaidi in China and South-east Asia-based e-commerce platform Lazada.

Singapore remained the most significant country in its portfolio, with a 28 per cent exposure.

Temasek also sold a record $19 billion worth of assets in the 12-month period. It pared down its stake in China Construction Bank and sold 10 per cent of its long-held stake in Alibaba after the Chinese e-commerce giant went public in September last year.

Temasek is targeting investments in countries committed to structural reform, such as India, China and Mexico, as well as those companies at the forefront of new technologies, said Mr Lambah.

The company has been steadily increasing its exposure to China, which made up 27 per cent of its portfolio as of March 31.

Mr Nicholas Teo, a strategist at CMC Markets who has been following Temasek's annual results, said its latest performance was "a result to be celebrated". However, he noted that the strong numbers were due in part to Temasek's concentration on sectors that performed especially well over the past year, for instance, Chinese banks.

The Chinese stock market has slumped in recent weeks.

Temasek's returns fared well from a longer-term perspective. Its 10-year total shareholder return was 9 per cent, and 7 per cent over a 20-year period. Its total shareholder return since its inception in 1974 was 16 per cent.

The portfolio's 19.2 per cent returns outdid the MSCI Singapore index, which tracks the local stock market and rose 11 per cent over the same 12 months. But returns were lower than the MSCI AC Asia excluding Japan index's 21 per cent.

Speculation that Temasek chief executive Ho Ching might be leaving was shot down by senior executives at a briefing yesterday. They stressed that she still has oversight over key matters and will return after her sabbatical leave, which began in April.

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A version of this article appeared in the print edition of The Straits Times on July 08, 2015, with the headline 'Temasek portfolio value climbs to record $266b'. Print Edition | Subscribe