SINGAPORE: Temasek Holdings recorded a record net portfolio value for the previous financial year on Tuesday (July 13), while expressing cautious optimism for the global economy in the short to medium term. According to its most recent annual review, its net portfolio was valued at S$381 billion for the year ended March 31, up S$75 billion – or roughly 25% – from S$306 billion a year ago.
This is a significant improvement over the previous financial year, when the COVID-19 epidemic caused a 2.2 percent decline in the net portfolio value.
Its one-year total shareholder return, which includes all dividends paid to shareholders minus any capital infusions, increased to 24.53 percent from -2.28 percent the previous year.
Over a longer period, the company’s 10-year and 20-year total shareholder returns were 7% and 8%, respectively, up from 5% and 6% the previous year.
Temasek stated it invested S$49 billion and divested S$39 billion in the previous financial year, both record highs and considerable increases over the previous year’s S$32 billion and S$26 billion investments and divestitures.
New investments were most concentrated in the Americas, followed by Singapore and China. Overall, Asia accounted for 64 percent of Temasek’s portfolio, with China (27 percent) and Singapore (24 percent) ranking first and second, respectively. “Despite pandemic lockdowns and travel restrictions, it was a busy year. “As we adjusted our portfolio for a changing world, we invested to support innovation and growth,” the Singapore state investment firm stated in its annual report. READ: Temasek invests $500 million in LeapFrog’s impact investment “Based on our value tests, we invested amid market dislocations. We made similar investments in our portfolio firms and kept our investment sales disciplined.”
As markets recovered over the year, it reported that several of its unlisted investments went public.
Temasek also stated that it has increased its attention on new prospects associated with four structural trends: digitization, sustainable living, the future of consumption, and longer lifespans.
Financial services (24%) and telecoms, media, and technology (21%) remained the two largest industries in the company’s portfolio. However, the makeup of these two sectors have changed “substantially” in the recent decade, owing in part to digitalization. It’s interested in payments and financial technology companies that “stand to benefit from the acceleration of digitalisation,” for example. It has invested in FNZ, a UK-based wealth management services platform, and Nium, a local start-up that facilitates global digital payments and card issuance, over the last year. It also places a major emphasis on technology, as digitization has “become a mainstream enabler.” Software, the Internet, e-commerce, the sharing economy, cloud computing, and digital content are all examples. READ: ST Engineering and Temasek to Form Freighter Aircraft Leasing Joint Venture Its technological investments include Roblox, a US-based online entertainment platform, as well as Snyk, a software provider of cybersecurity technologies, and Hopin, a UK-based virtual live events management platform. Temasek expects the global economy to “recover steadily” as a result of supportive fiscal and monetary policies going forward, but warned of an uneven recovery across countries as some deal with fresh peaks of COVID-19 infections and poor vaccination rates. As tensions between China and the United States rise, the report warns of “possible geopolitical reverberations.” “Overall, we are cautiously optimistic about the global economy’s short- to medium-term recovery. In anticipation of future dangers and opportunities, we continue to design our portfolio for resilience,” Temasek said in a news release. “Our long-term objective is to maintain our performance, generate risk-adjusted returns, and mitigate climate risks.” Temasek also stated that sustainability remained a priority for the company, with a goal of halving its portfolio’s net carbon emissions by 2030, compared to 2010. It aspires to achieve net zero carbon emissions by 2050./n
