Temasek's assets jump to a record on stock-mkt recovery

The value of Temasek's holdings increased by 8.6% in the year to March 31 from S$198 bn

Temasek Holdings Pte, Singapore's state-owned investment company, said assets rose to a record S$215 billion ($169 billion) last fiscal year as surging stock markets drove an almost sixfold increase in returns.

The value of Temasek's holdings increased by 8.6 per cent in the year to March 31 from S$198 billion, the investment company said in its annual report on Thursday. 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 Officer 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 (FSSTI) climbed 9.9 per cent.

"We are almost entirely invested in equities," Ho said in a statement today. "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.

Bank holdings
Financial services remained the biggest industry for Temasek's holdings, accounting for 31 per cent of its assets, unchanged from a year earlier, it said. Stakes in China Construction Bank Corp, Standard Chartered Plc and DBS Group Holdings Ltd are Temasek's biggest assets by value after the holding in SingTel, according to data compiled by Bloomberg.

SingTel, Construction Bank and Standard Chartered make up 29 per cent of its portfolio, Chia Song Hwee, head of Temasek's investment group, said in a Singapore briefing. The stakes are worth $46.5 billion, according to data compiled by Bloomberg.

"There is sufficient liquidity in the system, so we are not concerned about a liquidity crunch," Chia said, referring to Temasek's bank holdings. "The banks we invested in are very well capitalised. The loan-to-deposit ratio for those banks that we invested in still has a lot of room as far as creating a buffer for cushioning any negative situation."

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 Ltd and 1 per cent of Ping An Insurance (Group) Co, two of Asia's biggest insurers, as well as 6 per cent of Repsol SA, a Spanish oil company.