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<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published July 9, 2010
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Temasek's romance with Asia fattens its wallet
Portfolio hits new peak as Temasek prepares to deepen Asian affair even further
By LYNETTE KHOO
(SINGAPORE) Temasek Holdings, whose portfolio value climbed to a new high in the latest fiscal year, has found its focus on Asia paying off handsomely in shareholder returns.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>It now hopes to raise its Asian exposure further over the next 10 years.
'As a long-term investor, we remain optimistic on Asia, including Singapore, and in growth markets such as Brazil and other Latin American economies. Directionally, we are likely to increase our exposure to Asia over the next decade,' Temasek executive director Simon Israel told reporters yesterday.
'However, we will maintain full flexibility to shift our portfolio stance at any time in response to major market developments, trends or market opportunities.'
Temasek's annual report 2010 released yesterday showed its net portfolio value jumped $56 billion to $186 billion as at March 31, thanks to investments made and the robust recovery in global stock markets during the period.
Its portfolio value was $185 billion as at March 31, 2008 before diving to $130 billion as at March 31, 2009 amid the global financial crisis.
Temasek's one-year total shareholder return (TSR) hit 42 per cent by market value and 26 per cent by shareholder funds.
'Since the start of our Asia strategy in 2002, the new investments we made over the eight years have given us a good return of over 23 per cent,' said Mr Israel. 'As a consequence, this growth boosted our exposure to Asia, much faster than what we had expected.'
Temasek's portfolio exposure to Asia, outside of Singapore and Japan, has grown to 46 per cent in March 2010, compared to 16 per cent in March 2004 and 43 per cent in March 2009.
Its TSR since inception is 17 per cent by market value and 16 per cent by shareholder funds on a compounded annual basis.
'Some investments had not turned out as expected, while most other investments did well,' Mr Israel said. 'Overall, we were happy with our results.'
Chief financial officer Leong Wai Leng noted that while Temasek has underperformed key equity indices during the one-year period, it has outperformed these indices over the longer term.
But these benchmarks provide only an indication of Temasek's performance, she said. At least 23 per cent of Temasek's holdings are in unlisted assets, which are calculated at book value and don't reflect the rise in valuations.
During the year ended March 31, Temasek made $10 billion investments and $6 billion divestments.
The investments included $3 billion that was ploughed into rights issues and recapitalisations of existing holdings. Its investment in rights issues and recapitalisations over the past two financial years has given it a return of almost three times.
Other investments made during the year reflect Temasek's increased interest in the energy and resources sector as it bought into Olam International, US renewable products firm Amyris Biotechnologies, and Canada's Niko Resources. Its exposure to the sector increased to 6 per cent of its portfolio in fiscal 2010 from 5 per cent in the previous year.
Post-March 31, Temasek went on to invest in India's leading utility firm GMR Energy, mining companies Platmin of South Africa, Inmet Mining of Canada, and Chesapeake Energy of the US.
Recently, Temasek has agreed to subscribe for US$200 million of shares in Agricultural Bank of China (AgBank).
Asked about its exposure to risks in three Chinese banks including China Construction Bank and Bank of China, Temasek's head of strategy Jimmy Phoon said Temasek is 'comfortable' with its exposure to the Chinese banks.
He added that AgBank fits into Temasek's overall portfolio of Chinese banks and that financial institutions are a good proxy to the country's economic growth.
While Temasek declined to provide an update on its portfolio value since March 31, market watchers note that the change is unlikely to be material.
'I don't expect much change from March as not all of Temasek's investments are in stocks,' said Wong Sui Jau, general manager of Fundsupermart.
David Cohen, director of Asian Economic Forecasting for Action Economics, said Temasek is likely to have begun the new fiscal year with a setback.
'However, going forward, they should resume a positive return, as I expect that the market values will be supported by continued global economic growth,' he added.
Temasek's net profit over the year fell 26 per cent to $4.6 billion due to weaker contributions from portfolio companies like Neptune Orient Lines and Singapore Airlines, whose earnings took a beating from the global recession.
With a net cash position over the past three financial years, Temasek said it prefers to stay liquid over the next three years as it views developments globally with much caution.
Mr Israel noted that the austerity measures in Europe 'may dampen the fragile recovery in Europe and pose headwinds to the global recovery'.
In the near term, deleveraging will continue and trade protectionism is a major risk while credit will remain tight, he added.
'Notwithstanding these near-term structural weaknesses, the Asia story will continue to unfold with the re-emergence of China and India,' he said.
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT></TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Temasek's romance with Asia fattens its wallet
Portfolio hits new peak as Temasek prepares to deepen Asian affair even further
By LYNETTE KHOO
(SINGAPORE) Temasek Holdings, whose portfolio value climbed to a new high in the latest fiscal year, has found its focus on Asia paying off handsomely in shareholder returns.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD></TD></TR></TBODY></TABLE>It now hopes to raise its Asian exposure further over the next 10 years.'As a long-term investor, we remain optimistic on Asia, including Singapore, and in growth markets such as Brazil and other Latin American economies. Directionally, we are likely to increase our exposure to Asia over the next decade,' Temasek executive director Simon Israel told reporters yesterday.
'However, we will maintain full flexibility to shift our portfolio stance at any time in response to major market developments, trends or market opportunities.'
Temasek's annual report 2010 released yesterday showed its net portfolio value jumped $56 billion to $186 billion as at March 31, thanks to investments made and the robust recovery in global stock markets during the period.
Its portfolio value was $185 billion as at March 31, 2008 before diving to $130 billion as at March 31, 2009 amid the global financial crisis.
Temasek's one-year total shareholder return (TSR) hit 42 per cent by market value and 26 per cent by shareholder funds.
'Since the start of our Asia strategy in 2002, the new investments we made over the eight years have given us a good return of over 23 per cent,' said Mr Israel. 'As a consequence, this growth boosted our exposure to Asia, much faster than what we had expected.'
Temasek's portfolio exposure to Asia, outside of Singapore and Japan, has grown to 46 per cent in March 2010, compared to 16 per cent in March 2004 and 43 per cent in March 2009.
Its TSR since inception is 17 per cent by market value and 16 per cent by shareholder funds on a compounded annual basis.
'Some investments had not turned out as expected, while most other investments did well,' Mr Israel said. 'Overall, we were happy with our results.'
Chief financial officer Leong Wai Leng noted that while Temasek has underperformed key equity indices during the one-year period, it has outperformed these indices over the longer term.
But these benchmarks provide only an indication of Temasek's performance, she said. At least 23 per cent of Temasek's holdings are in unlisted assets, which are calculated at book value and don't reflect the rise in valuations.
During the year ended March 31, Temasek made $10 billion investments and $6 billion divestments.
The investments included $3 billion that was ploughed into rights issues and recapitalisations of existing holdings. Its investment in rights issues and recapitalisations over the past two financial years has given it a return of almost three times.
Other investments made during the year reflect Temasek's increased interest in the energy and resources sector as it bought into Olam International, US renewable products firm Amyris Biotechnologies, and Canada's Niko Resources. Its exposure to the sector increased to 6 per cent of its portfolio in fiscal 2010 from 5 per cent in the previous year.
Post-March 31, Temasek went on to invest in India's leading utility firm GMR Energy, mining companies Platmin of South Africa, Inmet Mining of Canada, and Chesapeake Energy of the US.
Recently, Temasek has agreed to subscribe for US$200 million of shares in Agricultural Bank of China (AgBank).
Asked about its exposure to risks in three Chinese banks including China Construction Bank and Bank of China, Temasek's head of strategy Jimmy Phoon said Temasek is 'comfortable' with its exposure to the Chinese banks.
He added that AgBank fits into Temasek's overall portfolio of Chinese banks and that financial institutions are a good proxy to the country's economic growth.
While Temasek declined to provide an update on its portfolio value since March 31, market watchers note that the change is unlikely to be material.
'I don't expect much change from March as not all of Temasek's investments are in stocks,' said Wong Sui Jau, general manager of Fundsupermart.
David Cohen, director of Asian Economic Forecasting for Action Economics, said Temasek is likely to have begun the new fiscal year with a setback.
'However, going forward, they should resume a positive return, as I expect that the market values will be supported by continued global economic growth,' he added.
Temasek's net profit over the year fell 26 per cent to $4.6 billion due to weaker contributions from portfolio companies like Neptune Orient Lines and Singapore Airlines, whose earnings took a beating from the global recession.
With a net cash position over the past three financial years, Temasek said it prefers to stay liquid over the next three years as it views developments globally with much caution.
Mr Israel noted that the austerity measures in Europe 'may dampen the fragile recovery in Europe and pose headwinds to the global recovery'.
In the near term, deleveraging will continue and trade protectionism is a major risk while credit will remain tight, he added.
'Notwithstanding these near-term structural weaknesses, the Asia story will continue to unfold with the re-emergence of China and India,' he said.
<SCRIPT language=javascript> <!-- // Check for Mac. var strAgent; var blnMac; strAgent = navigator.userAgent; strAgent.indexOf('Mac') > 0 ? blnMac = true:blnMac = false; if (blnMac == true) { document.write('
'); } //--> </SCRIPT></TD></TR></TBODY></TABLE>
