Temasek portfolio value up

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 1.6pc to S$313 billion in the 12 months ended March 31 (pic). In U.S. dollar terms, the portfolio value fell by 1.7pc. One-year total shareholder return for the period was 1.49pc, while three-year TSR came in at 8.88pc 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.

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“Equity markets have been volatile for the past year and a half,” Dilhan Pillay, the chief executive officer of Temasek International, said.

Temasek struck a 3 billion euro ($3.4 billion) deal to buy a substantial stake in Bayer AG in April 2018, only to see the German healthcare and agricultural giant lose more than one-third of its value amid a flurry of lawsuits relating to claims a weedkiller brand it acquired when it took over Monsanto Co. causes cancer.

It also holds a large interest in U.S. telecoms provider CenturyLink Inc., whose shares slumped 27pc in the 12 months through March 31 after a string of setbacks including a customer lawsuit alleging fraud.

Financial services remain the largest share of Temasek’s portfolio, at 25pc. The investor is a shareholder in Industrial & Commercial Bank of China Ltd., down 14.6pc over the period, and DBS Group Holdings Ltd., down 8.3pc.

Net profit for the group slipped 46pc to S$11.8 billion, its lowest level since 2016, although Temasek explained this was mainly due to a change in accounting rules.

Sovereign Wealth Centre’s head of data and research Daniel Brett said Temasek’s portfolio was inextricably linked to the performance of Singapore’s economy.

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“With Singaporean assets representing more than a quarter of its portfolio, Temasek’s performance will be heavily influenced by the returns of its domestic holdings,” Brett said in an email ahead of the release.

“The decline in the FTSE Straits Times Index and the marked slowdown in the country’s GDP growth signal that heavy domestic exposure could undermine the sovereign investor’s total portfolio performance.”

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