Temasek
SINGAPORE: Temasek Holdings Pte held onto gains in its portfolio amid global trade uncertainties after selling S$28 billion ($20.6 billion) of holdings as U.S. equity markets hit record highs and its unlisted assets outperformed.
The Singapore state investor’s net portfolio value rose 1.6% to S$313 billion in the 12 months ended March 31. In U.S. dollar terms, the portfolio value fell by 1.7%. One-year total shareholder return for the period was 1.49%, while three-year TSR came in at 8.88% in Singapore dollar terms.
Investors globally are facing a tough environment as the trade war between China and the U.S. clouds the market outlook and potentially disruptive events like Brexit could dent returns.
Singapore’s sovereign wealth fund GIC Pte last week said overhyped valuations in developed markets were also a concern. London’s Sovereign Wealth Center and CIMB Private Banking economist Song Seng Wun had expected Temasek to report a decline in its net portfolio value for the period.
"Equity markets have been volatile for the past year and a half,” Dilhan Pillay, the chief executive officer of Temasek International, said.
"Concerns remain around escalating tensions, especially between China and the U.S. These tensions may further moderate global growth. We also remain watchful around the risks of a late cycle recession in the U.S., while Brexit and political fragmentation continue to weigh on Europe.”
Temasek said it had anticipated an increasingly challenging environment, and moderated its investment pace. Total investments during the year fell to S$24 billion from S$29 billion the year prior. Divestments at S$28 billion represent a peak reached only one other time (in 2016) over the past decade.
"We continue to build our portfolio for the future by increasing our exposure in unlisted companies,” Pillay said. "Investments in this space have generally performed well and provided us with better returns than listed ones since 2002.” Unlisted assets comprise 42% of the firm’s portfolio.
The state investor continued to expand its U.S. holdings, which rose to 15% of the portfolio from 13% a year earlier. Its Singapore exposure fell to 26% from 27% a year earlier, and now equals its exposure to China.
Monetary Authority of Singapore Managing Director Ravi Menon warned in June that the city-state was reviewing its growth projections due to a deterioration in the global economy.
Bayer, CenturyLink
Some of Temasek’s biggest bets have suffered governance and legal setbacks over the past year.
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