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Bringing you news, views and analysis since 2013

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Temasek portfolio at record high of SGD215bn

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Temasek Holdings delivered a record net portfolio value of SGD215bn for the year ended 31 March 2013, up SGD17bn from SGD198bn the previous year, according to the company’s annual performance review.

 
S Dhanabalan, chairman, Temasek, says: “Last year, there were some signs of a recovery in the global economy. The severe disruptive risks from the global financial crisis subsided, but structural risks have not been completely resolved.
 
“Despite the turmoil over the last decade, the Temasek portfolio value more than tripled in Singapore dollar terms from a trough of SGD61bn in March 2003, when the SARS epidemic hit Asia.
 
“While we have increased our exposure in North America and Europe, Asia continued to attract the largest proportion of our investments. We remain anchored in Asia and are optimistic about its long term growth.”
 
A key performance measure for Temasek is Total Shareholder Return (TSR), which excludes capital injections from, and includes dividends to, Temasek’s shareholder.
 
This measures the compounded annual returns to its shareholder, the Government of Singapore.
In Singapore dollar terms, its TSR for the year was 8.86 per cent. Its three-year TSR was 4.94 per cent compounded annually. Longer term 10-year and 20-year TSRs were 13 per cent and 14 per cent respectively. TSR since Temasek’s inception in 1974 was 16 per cent.
 
Temasek has been an active investor over the past decade. Investments totalled SGD159bn, with divestments at SGD100bn over the period.
 
Newer investments made after March 2003 delivered annualised returns of 20 per cent to Temasek over the last 10 years. These newer investments include additional investments in long-held portfolio companies such as DBS and CapitaLand, where the firm participated in rights issues or other capital raising programmes. Tamasek’s older portfolio of investments such as shares held as at 31 March 2003 in SingTel and Singapore Airlines, delivered 16 per cent annualised returns to Temasek over the past 10 years.
 
Net investments for the year amounted to SGD7bn. Net investments of SGD4bn were made in the energy and resources sector, and in North America and Europe.
 
These investments included:
 
• Repsol, a Spanish-listed integrated oil company with substantial international operations;
• Cheniere Energy, a US company which is building a liquefied natural gas export terminal;
• Venari Resources, a US oil company focused on deep water exploration in the Gulf of Mexico;
• Turquoise Hill Resources, a Canadian-listed international mining company.
 
Temasek also participated in the bond cum warrants rights issue of Olam International, a global leader in the supply chain management of agricultural products and food ingredients. The company subsequently increased its stake to 23 per cent in the company, as at 31 March 2013.
 
Financial services continued to be Tamasek’s largest portfolio exposure by sector, at 31 per cent.
 
The company increased its stake in the Industrial and Commercial Bank of China, the world’s largest bank by market capitalisation, and deepened exposure to the Asian insurance sector with stakes in AIA and Ping An Insurance.
 
On a geographic basis, Singapore and China remained Tamasek’s largest exposures at 30 per cent and 23 per cent respectively, based on underlying assets, which included the assets in our portfolio companies.
 
Exposure to North America and Europe grew to 12 per cent during the year, arising from investments in the energy and resources sector, and other investments such as Evonik, a German specialty chemicals company. 

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