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Analysts Expect Singapore's Temasek To Report Record Portfolio Value

Analysts Expect Singapore's Temasek To Report Record Portfolio Value
A rally in global financial markets and the public listing of some of the holdings of Singapore’s state investor Temasek Holdings helped the firm to likely propel its portfolio value to touch a record in the year ending March.
In the year ending March, the value of Temasek's assets is expected to have surged by 20 per cent, according to analysts which likely pushed up the portfolio value of the company to about S$375 billion ($277.7 billion) following a dip of 2.2 per cent a year ago to S$306.  That drop was the first fall in the portfolio value of the company after three straight years of gains.
The support lend by Temasek for pandemic-hit businesses has arguably clouded the long term outlook for the company – one of the largest state investors of the world. The companies that were supported by Temasek during the pandemic included Singapore Airlines and Sembcorp Marine, an offshore marine services company, among others.
"We have seen broad economic growth and a rebound in financial markets, but there are industries which are facing headwinds, so the challenge for big long-term investors like Temasek and GIC really is about managing portfolios in which occasionally, some sectors will take a hit," said Song Seng Wun, an economist at CIMB Private Banking.
The exposure of the company is primarily centred in Asia and 66 per cent of its underlying asset portfolio is in this region – wherein the assets are mostly located in China and Singapore. However in recent times, the investing company has also increased investments in the United States, particularly among tech companies.
Annual performance of the company will be provided by Temasek this week while the larger investor GIC will publish its annual report later this month.
There is likely to be no major changes in the strategy of the company, according to expectations of analysts even though there will be a change at the top of the company with the company’s senior executive Dilhan Pillay slated to be replace Ho Ching, who is retiring after heading Temasek for 17 years, as the CEO of the investment firm.
The majority of the investments of Temasek are in equities, unlike many other state investors,  and about 48 per cent of its portfolio is comprised of unlisted assets – a record for the company, as of the fiscal year ended March 2020.
Here has been a surge in the global equities market over the past fiscal year with a 55 per cent jump in MSCI's Asia shares ex-Japan index and a 28 per cent jump in Singapore's Straits Times index.
"There remains a flood of liquidity, so competition for funding is still fierce," said Song.
"I don't expect Temasek's medium to long term strategy to change due to any result this year - it is obviously ruled by a long term horizon and aims at anticipating the market by being one of the world's largest and most active investors in VC (venture capital) and technology," said Diego Lopez, managing director of sovereign wealth fund tracker Global SWF.

Christopher J. Mitchell

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