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Singapore's Temasek portfolio value grows to record level

Singapore's Temasek portfolio value grows to record level

Singapore's state-owned investment enterprise, Temasek Holdings, experienced a record-breaking high on Tuesday.

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By Charles Bliss 11.07.2018

Singapore’s state-owned investment enterprise, Temasek Holdings, experienced a record-breaking high on Tuesday as the value of its portfolio soared above SGD $300bn (equivalent to $235bn) for the fiscal year ending 31 March.

This is the first time that the company’s value has exceeded this mark, which represents a significant 12% uptick compared to the previous financial year in local currency terms.

Temasek Holdings has been busy during the last 12 months, making investments worth a total of SGD $29bn and divesting more than half of that figure. Its milestone follows the news that the MSCI Index for Asian shares jumped by 18% year-on-year, and Singapore’s primary index rose by 8%.

While expanding portfolios and rising indexes are positive indicators, Temasek said in a statement that it may be difficult to sustain growth during the current financial year due to geopolitical and trade tensions driven by the trade war between China and the US as well as other factors.

Temasek added that certain financial and monetary stresses have become more evident in recent weeks in key economies around the world and that the jittery climate has played a role in its decision to slow down investment this year. It will continue to pursue opportunities that it believes are essential to growth and continuity.

Lim Boon Heng, Chairman of Temasek, noted in the enterprise’s annual report published on Tuesday: “We are tempering our investment pace in the year ahead but remain open to intrinsically investable opportunities, including counter-cyclical ones.”

Rohit Sipahimalani, Temasek’s Joint Head of Portfolio Strategy and Risk Group, added: “We do have a more cautious outlook right now compared to what we had in the past.”

Temasek’s upturn is quickly becoming a common trend, as several other companies that it has a stake in have also seen considerable increases in share prices during the last few months. The DBS Bank in Singapore experienced a 42% uptick recently, and in Hong Kong, the Industrial and Commercial Bank of China (32%) and the China Construction Bank Corp (29%) saw similar surges.

The Singaporean government owns Temasek, and the company has pivoted away from domestic investment in recent years and evolved into more of a global leader, which has put the small but wealthy country on the map. Almost three-quarters of Temasek’s portfolio exposure resides in foreign markets, including those in Asia, the Americas and Europe.

Temasek is also doubling down on investment in tech startups. Along with GIC, another Singapore state fund, it fronted a large portion of the $14bn raised by Ant Financial, a Chinese company and affiliate of Alibaba Group, which is now the highest-valued fintech enterprise in the world.

The company has also backed US tech startup Magic Leap, which specializes in augmented reality tech, and the Uber-style ride sharing company Go-Jek, based in Indonesia. Temasek said that it will continue to invest in sectors such as tech and life sciences, and the current climate is unlikely to affect these aims.

Temasek International Executive Director and Chief Executive Lee Theng Kiat added: “This ongoing active investment stance is focused on solutions for a better, smarter and more connected world over the medium to long-term.”

On the trade tensions that have been prevalent during the last ten days, Temasek said on Tuesday that it is “obviously worried that this could escalate” but is hopeful that policymakers in China will use the tools that they have at their disposal to ensure that there is not any significant spillover or fallout from the standoff. 

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