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Anonymous

21 Jul 2020

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How is the TEMASEK Portfolio performing during the current economy?

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Kenneth Lou

21 Jul 2020

Co-founder at Seedly

Temasek reports a preliminary portfolio value of S$306 billion ahead of its full release in September.

Summary: Impact of COVID-19 shows a strong and resilient portfolio amid some contraction.

Source: Official TEMASEK Press Release

Here is a TLDR version of the official report:

  • Preliminary net portfolio value (NPV) of S$306 billion as at 31 March 2020

  • One-Year Total Shareholder Return (TSR) of -2.3%

  • NPV tripled over last 16 years with TSR of 7.5%

  • Ended the year in a net cash position, with a strong balance sheet

More details and full reading:

Temasek is providing its preliminary portfolio performance for its last financial year ended 31 March 2020, ahead of the September release of its

final audited annual consolidated group financials and portfolio performance.

Temasekā€™s preliminary portfolio performance

Based on current unaudited management information, Temasekā€™s NPV was S$306 billion as at 31 March 2020.

One-year TSR was -2.3%. TSR since inception in 1974 remains a robust 14% compounded annually. TSR takes into account all dividends distributed to the shareholder, less any capital injections.

Temasekā€™s NPV has tripled over 16 years, up from S$90 billion as at 31 March 2004, reported in its inaugural Temasek Review. Its 16-year TSR was a compounded 7.5% from 31 March 2004 to 31 March 2020.

Impact of COVID-19 pandemic

Prior to the onset of the COVID-19 pandemic in the last quarter of the financial year ended 31 March 2020, Temasekā€™s NPV had been growing steadily and trending well.

As an investor with a long term horizon, Temasek does not manage its portfolio to short term mark to market changes, by benchmarking against public market indices, or comparing against the returns of other companies.

However, as a reference to how it has performed over the last financial year relative to market indices in Asia, the Temasek portfolio stayed resilient with a 2.3% decline, compared to the MSCI Singapore Index and the MSCI AC Asia ex-Japan Index, which declined 18.3% and 9.0% respectively. Globally, the MSCI World Index declined by 5.8%.

Most of these declines were the result of the sharp market correction in the last quarter up to 31 March 2020, in response to the onset of COVID-19.

As was evidenced during the SARS epidemic and the Global Financial Crisis, Temasek typically outperforms market indices during market downturns.

Temasek ended the year in a net cash position with a strong balance sheet.

This means Temasek has the capacity to work with its portfolio companies to position them for the future. It also stands ready to invest in opportunities arising from volatile market conditions during and post COVID-19 recovery.

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