COVID-19 Has Reportedly Wiped Off SGD$34 Billion Investments in Temasek Holdings in 3 Months

Last Updated on 2020-03-25 , 8:24 pm

After reading that headline you might be in a state of panic.

Or maybe you don’t quite give a hoot because S$34 billion is a number that’s too big for most people to put into perspective how big it really is.

Either way…

It doesn’t take a stock market analyst to tell you that every god damn stock you can think of is going down, down, down because of COVID-19.

And what this meant for Temasek Holdings is…

Top 12 Holdings of Temasek Holdings Decline in Market Value of Around One-third

Lest you think I’m pulling this number out of my behind, this was done by a Bloomberg analysis.

Temasek owns shares like Alibaba and Singapore Airlines, and then also some like Thai mobile phone operator Advanced Info Service (that is part-owned by Singtel).

And the top 12 biggest holdings that were worth US$73.8 billion on 2 Jan 2020 dropped to US$50.3 billion on 20 March.

Their biggest share, Singtel, dropped US$7.4 billion, followed by DBS, down US$5.3 billion, then Singapore Airlines, by US$1.7 billion.

But uh… what does this have to do with us ordinary poor folks with no money and no stocks?

Each year, our gahmen‘s budget is partly funded by a net investment return contribution, which is based on returns from Temasek, sovereign wealth fund GIC, and the Monetary Authority of Singapore.

And in the fiscal year 2020, that contribution was expected to be S$18.6 billion.

Which sounds really bad, because our budget for 2020 is projected to be in a deficit of S$10.9 billion, the highest in a decade.

Yep. That means our gahmen need to tap into reserves to help its people and businesses that are bleeding from the impact of the virus. And that’s not my words. That’s President Halimah Yacob’s.

The Temasek Portfolio Was Doing Good… Before COVID-19

Before all these apocalypse talks started, Temasek was actually doing pretty well despite things like the US-China trade war.

The firm’s portfolio value even rose by 3% in January.

To put things into perspective, as of 31 March 2019, the net portfolio value was S$313 billion, up 1.6% from the previous year.

Yeah, we were doing better than the year before until shit happens.

But, let’s take a step back and assess what’s going on.

Really, We Shouldn’t Be Talking About Stock Market Value

Again, not my words hor.

Temasek Holdings Chairman Lim Boon Heng spoke at a community event and said, “It’s pretty obvious with the way stock markets are behaving recently that we should expect the returns to be down. But now is not the time to think about whether you’ve made a loss or not. Now is the time to see how we can all get rid of this virus.”

And he’s god damn right. You shouldn’t be worrying about how much your house can sell for if it’s burning right now. You should be focused on putting out the fire.

Also, things might not be as grim as it looks.

As of 31 March 2019, 42% of Temasek Holdings assets are not publicly listed and are less affected by the stock market. The root cause for this is the virus anyway, so logically speaking if we focus on solving the COVID-19 issue, everything will turn back to normal.

I mean, it’s not like the virus means those big companies suddenly go bankrupt right? They still need to operate, and if the virus goes away they have to resume operations. It’s why Temasek employees froze their salary.

But for the full picture, I guess we have to wait until Temasek release their annual report ending 31 March 2020 in a few months time.

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