Singapore state investment giant Temasek said Thursday the value of its global portfolio rose to a record high of Sg$215 billion ($169 billion) in the year to March thanks to a rebound in stock markets.
The firm said in a statement its holdings jumped 8.6 percent from the previous financial year, and are more than three times larger than at the height of the SARS scare 10 years ago.
Temasek -- which has stakes in global names including Standard Chartered bank, Spanish energy giant Repsol and DBS bank -- was boosted by an equities rebound last year as the US economy picked up and eurozone fears abated.
"Last year, there were some signs of recovery in the global economy. The severe disruptive risks from the global financial crisis subsided," Temasek chairman S. Dhanabalan said in a statement.
However, he warned "structural risks have not been completely resolved".
"Despite the turmoil over the last decade, the Temasek portfolio value more than tripled from a trough of Sg$61 billion in March 2003, when the SARS epidemic hit Asia," he added.
Temasek executive director Ho Ching said however that the value of the company's portfolio would depend on the performance of global stocks each year.
"We are almost entirely invested in equities," she said in a statement.
"This means a lot more year-to-year volatility, as we have seen over the last 10 years," she added.
The company said it invested Sg$20 billion in the financial year ending March 31, with the bulk of the investments going into energy and resources firms. It said it divested Sg$13 billion.
However, financial services continue to make up a sizeable chunk of its portfolio, accounting for 31 percent, including stakes in the Industrial and Commercial Bank of China, the world's biggest lender by market capitalisation.
Temasek also said Asia remained the anchor of its investments, with the region accounting for 71 percent of underlying assets.
Singapore accounts for 30 percent of its total investments and China 23 percent, while exposure to North America and Europe was at 12 percent.
Temasek, one of Singapore's two sovereign wealth funds, said its three biggest holdings were in Singapore Telecom, China Construction Bank, and Standard Chartered PLC.
Stakes in the three firms make up 29 percent of Temasek's global portfolio.
Chia Song Hwee, head of Temasek's investment Group, said at a news conference that while Temasek would continue to be anchored in Asia, it would seek new opportunities in North America and Europe despite the market uncertainty in both regions.
"North America continues to be the centre stage for innovation... and Europe has many good and steady companies and we stand ready to assess them," he told reporters.
China's current liquidity crisis would not affect the Chinese banks Temasek had stakes in as they were well capitalised, Chia said.
"We invest in banks as a proxy to their underlying economies. Our view of the economy in China at least over the next 15 to 20 years continues to be positive mainly because of the demography," he added.
Desmond Chua, market analyst at CMC markets in Singapore, said China's ongoing economic reforms and a potential end of massive stimulus measures in the United States this year could hamper Temasek's growth opportunities.
He said the firm's rate of return could slow to at least 6.0 percent in the current fiscal year from 8.86 percent in the year ended March 2013.
But he added "it won't matter to them since they think long-term".
Temasek said it was looking to expand it stake in industries such as clean technology, life sciences and consumer technology.
AFP
Thu Jul 04 2013
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