Temasek ends fiscal year with record S$266b assets

SINGAPORE — Temasek Holdings’ net portfolio value jumped to a record of S$266 billion in the financial year ended March, with growth driven by rallies in global equity markets.

The 19 per cent rise from S$223 billion in the previous 12 months also came as the firm increased its focus on investments outside banking and financial services, such as technology, consumer and life sciences — areas that Temasek continues to watch for opportunities.

“We see that innovation is driving many consumer and business patterns across the globe … In order to embrace the opportunities of the future, we are interested in companies that are at the forefront of innovating new technologies and business models. Such companies, we believe, have the potential to become global champions,” said Mr Ravi Lambah, senior managing director for investments, at Temasek’s annual review today (July 7).

The fiscal year ended March was Temasek’s “most active” year, noted chairman Lim Boon Heng. The investment firm made S$30 billion of new investments — the most since the global financial crisis — and a record-high S$19 billion of divestments to capitalise on the bull market.

About half of the new investments were in Asia, including Hong Kong health and beauty retailer AS Watson, Singapore commodities firm Olam, as well as Chinese Internet company Tencent. Key divestments included a stake sale in China Construction Bank and Alibaba, where it continues to hold substantial positions. 

CMC markets analyst Nicholas Teo said: “Temasek has the ability to spot key investments and the skill to take sizeable positions that matter. And these worked well in a wonderful year because we saw markets hit their peaks in the fiscal year. That clearly helped Temasek lock in a good year.”

“The increased focus on technology or innovation is part and parcel of portfolio management. That’s clearly a growth area, what with the world moving towards more technology adoption, e-commerce and so forth,” Mr Teo said. 

According to sectors, Temasek’s holdings in telecommunications, media and technology accounted for 24 per cent of its portfolio as of end-March, up from 23 per cent the previous year. Financial services dropped to 28 per cent from 30 per cent, while transportation and industrials declined to 17 per cent from 20 per cent.

By geography, Asia continued to dominate. Excluding home market Singapore, the region accounted for 42 per cent of Temasek’s portfolio as at March 31, up from 41 per cent in the previous 12 months. The firm’s holdings in North America and Europe rose to 17 per cent from 14 per cent.

Singapore remained its largest country exposure at 28 per cent, though that narrowed from 31 per cent previously. 

Going forward, Mr Lambah said the investment firm would seek opportunities in “countries that have committed to structural reforms”, including in China, India and Mexico.

Dr Wu Yibing, Temasek’s head of China, said that despite the recent sell-off in the Chinese stock market, the company remains optimistic about the country’s long-term prospects and is looking for opportunities to invest.

“We are actively building our position in the Chinese capital market … We actually think the volatility may present a bit of opportunity for us to invest,” Mr Wu said.

On mature markets, Mr Lambah said the United States looks set to continue its recovery path, while Europe has benefited from easy monetary policy. However, Europe’s political dimension warrants close monitoring, as the developments there could “have some destabilising effects”.

Temasek’s chief executive Ho Ching, who has been on a sabbatical since April, will return as planned this month, the company said today.