Singapore state investor Temasek posts worst return since 2016

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  • Temasek’s total shareholder return fell 5.07% in Singapore dollars for the year.
  • The net value of the portfolio was S$382 billion in 2023, compared to S$403 billion in 2022.
  • A combination of global events, not seen in recent decades, has raised the cost of capital and squeezed capital flows.

Singapore’s state-owned investment firm Temasek posted its worst earnings in seven years in 2023 under the weight of a difficult macroeconomic and geopolitical environment.

A statement issued on Tuesday said Temasek saw a 5.07 per cent decline in its full-year total shareholder return in Singapore dollars for the fiscal year ended March 31. Temasek’s annual shareholder return also turned negative for the first time since 2020.

The net value of the portfolio was S$382 billion ($284.77 billion), compared to S$403 billion in the same period last year. This is his fifth time since 2003 that the company’s one-year total shareholder return has been negative.

β€œ2022 has been a challenging year for the market in the last decade,” Lim Bun Heng, chairman of Temasek Holdings, said in a statement. β€œThe world is changing rapidly against the backdrop of restrictive macro policies, slow growth and a highly polarized geopolitical environment.”

Still, Temasek’s decline in annual shareholder return in 2022/23 is relatively good compared to global stock market returns.

Temasek Holdings saw a 5.07% decline in total shareholder return in Singapore dollars for the financial year ending March 31, 2023, according to a statement issued on Tuesday. The net portfolio value was S$382 billion (S$403 billion in the same period last year). This is his fifth time since 2003 that the company’s one-year total shareholder return has been negative.

Roslan Rahman | AFP | Getty Images

The S&P 500 and MSCI Asia ex-Japan benchmarks each fell nearly 20% in 2022, plagued by persistent inflation despite multiple rate hikes by central banks. Intensifying geopolitical tensions, such as the US-China conflict and the Russia-Ukraine war, did not help.

Singapore’s state-owned investors invest in both public and private markets. Private assets accounted for 53% of the portfolio as of March 31, with listed assets generating higher returns. The company said bringing its unlisted portfolio to the market would add S$18 billion in value.

The company had a three-year total shareholder return of 8%, a 10-year profit margin of 6% and a 20-year profit margin of 9%.

Singapore’s state investor said a combination of global events over the past year has pushed up the cost of capital and squeezed capital flows.

“It has also impacted the pace of the energy transition as the demand for energy security and resilience increases,” he added.

Temasek said global direct investment saw a “reversal of returns” in the 12 months to March 31, especially in the technology, healthcare and payments sectors, as valuations were cut in a high interest rate environment. Stated.

Temasek said it has slowed its investment pace over the past year as a result and adopted a cautious approach amidst tight liquidity. He invested $23 billion and sold $20 billion for a net investment of $3 billion.

Still, Temasek said it has made new investments in payments platform Stripe and IT security provider Kaseya. This investment enabled the acquisition of Datto, a provider of security and cloud-based software solutions.

Temasek announced that it has increased its stake in Mastronardi, a Canadian-based company that grows and sells greenhouse-grown fresh produce.

Singapore’s state-owned investor said it had cut its 2022/23 portfolio’s exposure to financial services to 21% from 23% the previous year, and increased its exposure to transportation and industry to 23% from 22%. These he two sectors are the largest in the company’s investment portfolio.

Early-stage investments are capped at 6% of the portfolio, Temasek said.

In November, Temasek wrote off its $275 million investment in bankrupt crypto exchange FTX. Then, in May, the company cut compensation for the team and its senior management that recommended investing in the bankrupt cryptocurrency exchange FTX.

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