Jul 05, 2013

    Temasek assets hit record $215b

    TEMASEK Holdings' assets jumped to a record high as surging global stock markets bolstered the assets of Singapore's state-owned investment company.

    The value of Temasek's holdings increased by 8.6 per cent to S$215 billion in the year to March 31 from S$198 billion, the investment company said in its annual report yesterday.

    Total shareholder return, which includes dividends, widened to 8.9 per cent from 1.5 per cent in the previous year.

    Temasek, led by chief executive Ho Ching, benefited from a recovery in stocks around the world, with 73 per cent of its holdings in publicly-traded assets.

    The MSCI World Index gained 9.3 per cent in the year to March 31, while Singapore's Straits Times Index climbed 9.9 per cent.

    "We are almost entirely invested in equities," Madam Ho said in a statement. "This means a lot more year-to-year volatility, as we have seen over the last 10 years. We are prepared to ride through the large mark-to-market volatility on our portfolio value, because a portfolio of mostly equities also means we expect higher returns over the long term."

    The firm's total shareholder return averaged 16 per cent since its inception in 1974. The average return was 4.9 per cent over a three-year period, and 13 per cent over 10 years, it said.

    Financial services remained the biggest industry for Temasek, accounting for 31 per cent of its assets, unchanged from a year earlier, it said.

    Stakes in China Construction Bank, Standard Chartered and DBS Group Holdings are Temasek's biggest assets by value, after its holding in SingTel.

    SingTel, Construction Bank and Standard Chartered make up 29 per cent of its portfolio, said Mr Chia Song Hwee, head of Temasek's investment group. The stakes are worth US$46.5 billion (S$59 billion), according to data compiled by Bloomberg.

    Referring to Temasek's bank holdings, Mr Chia said: "There is sufficient liquidity in the system, so we are not concerned about a liquidity crunch. The banks we invested in are very well-capitalised."

    Temasek made S$20 billion of investments last year, down from S$22 billion a year earlier, it said.

    Those included 2 per cent of AIA Group and 1 per cent of Ping An Insurance, two of Asia's biggest insurers, as well as 6 per cent of Repsol SA, a Spanish oil company.

    Madam Ho said: "While Asia and Latin America will continue to be focus areas for us, we do see increasing opportunities in North America and Europe.

    "We are setting up offices in London and New York to support our investment activities in these markets."

    New investment opportunities include industries such as energy, resources, life sciences, consumer and technology, Mr Chia said at a briefing in Singapore.

    The company has the financial flexibility to step up its investments, he said.

    Divestments fell to S$13 billion from S$15 billion a year earlier, as it sold shares of Asia Pacific Breweries and Bharti Infratel, it said. Temasek also divested 2.5 per cent of SingTel, reducing its holding to 52 per cent.

    Assets in Singapore were unchanged at 30 per cent of its holdings, it said. Investment in the rest of Asia fell to 41 per cent from 42 per cent a year earlier, while those in North America and Europe rose to 12 per cent from 11 per cent.