Singapore's Temasek hit by first portfolio drop in 7 years

Singapore state investment giant Temasek Holdings said Thursday its global portfolio suffered its first annual loss since the financial crisis seven years ago, as global stock markets were hit by a series of China-linked routs.

Temasek announced that the value of its global assets was Sg$242 billion ($180 billion) by March, down nine percent from last year's record Sg$266 billion.

The investment company said its net profit over the past year plunged 43 percent to Sg$8.0 billion.

Equity markets worldwide were hammered last summer by fears over China's economy as Beijing announced a shock devaluation of its yuan currency.

Another rout followed in January and February as questions were again raised about China's outlook and its leaders' ability to handle a long-running growth slowdown.

Both events wiped trillions of dollars off company valuations worldwide.

Temasek said in its annual report Thursday that the outlook was still tough, with the US economy heading for a modest growth path while China continues to see slowing expansion.

Europe's growth outlook has been dented by Britain's surprise vote last month to leave the European Union, it said.

"The external environment will remain quite challenging for Singapore given its intimate links to global trade and demand," Temasek said in a statement.

"However, Singapore's openness also means exposure to both mature and growth economies, which can provide opportunities for a balanced growth in future."

Temasek -- a strategic investor that stresses long-term performance rather than year-on-year gains -- holds among its portfolio telecoms group SingTel, Singapore Airlines and banking giant China Construction Bank.

Total shareholder return, which includes dividends, was minus 9.02 percent during the financial year ending March, but has averaged 15 percent since Temasek's inception in 1974.

Song Seng Wun, a Singapore-based economist with CIMB Private Banking, said Temasek performed better than expected as he had projected global assets to decline 10-15 percent.

"It's not so bad given the rout in equities in 2015," he told AFP.

Temasek said it made Sg$30 billion in new investments last year but also divested a record Sg$28 billion as the company adjusted its holdings amid the rapidly changing landscape.

Among its major investments was a $540 million injection in Univar, a US-based distributor of commodity and specialty chemicals. Temasek also continued its investments in biotechnology firms.