Temasek Holdings Reported Increase in Net Portfolio of Nearly 25%

While economic downturns seem like they’ll last for ever, history tells us otherwise.

Whether it takes a year, several years, or more than decade, the economy can recover from even the most severe of depressions.

Here in Singapore, one company has not only rebounded nicely from the downturn, but had a record net portfolio.

Temasek Holdings Reported Increase in Net Portfolio of Nearly 25%

Yesterday (13 July), Temasek Holdings reported a record net portfolio value for the last financial year, with an increase of nearly 25%.

Last year, its portfolio was valued at S$306 billion. This figure has shot up to  S$381 billion – an increase of S$75 billion – for the year ended 31 Mar.

Given that it saw a 2.2% drop in its portfolio value in the previous year, this was quite a turnaround, to say the least.

It’s one-year shareholder return for the financial year was 24.53%, while its 10-year and 20-year total shareholder returns came in at 7% and 8% respectively.

So, what accounts for this remarkable reversal?

Boost in Global Equities & Public Listings

Temasek said that its value was boosted by the recovery in global equities and the public listing of some of the companies in its portfolio.

It invested a total of S$49 billion in the last financial year, with the Americas taking up the largest chunk of new investments.

With 64% of the portfolio, Asia still has the majority of holdings in the portfolio. China takes up 27% of the portfolio, while Singapore has 24%.

Due to global lockdowns and travel restrictions, Temasek had to reposition its portfolio by divesting a whopping S$39 billion, S$13 billion more than the previous financial year.

The two biggest sectors in its portfolio remained are still financial services (24%), and telecommunications, media, and technology (21%).

Cautious Optimism 

Despite the recovery, Temasek remains cautiously optimistic, as some countries are still grappling with fresh COVID-19 outbreaks and sluggish vaccination rates.

It also pointed to growing tensions between China and the US, which could have “potential geopolitical reverberations”.

“Overall, we are cautiously optimistic on the global economic recovery in the short to medium term. We continue to shape our portfolio for resilience in anticipation of future threats and opportunities,” it said.

Ho Ching to Retire as CEO, Will Be Replaced By Dilhan Pillay

Earlier this year, Temasek announced that Ho Ching will vacate her post as CEO on 1 Oct this year, and will be replaced by Dilhan Pillay Sandrasegara.

Mr Pilay succeed her as CEO and executive director on the same day.

Temasek Holdings chairman Lim Boon Heng said Ho has been part of the succession process, and praised her for her work in the past 17 years at the company.

“The board wishes to recognise that she has led Temasek through a remarkable period of transformation,” he told CNA.

“We have evolved from a relatively passive owner of the shares in former government-owned companies in Singapore to a globally recognised and respected investor, forward-looking institution and trusted steward.”

Featured Image: temasek.com.sg