Temasek has worst year since 2016

SINGAPORE: Temasek Holdings Pte reported a preliminary one-year total shareholder return of -2.3% for the financial year ended March 31, its worst performance since 2016, and warned fresh lockdowns imposed by coronavirus could further hamper global markets.

The Singapore state investor’s net portfolio value was S$306 billion (US$214 billion) versus S$313 billion a year earlier. Its portfolio had expanded by 1.5% the period prior. Due to Covid-19, finalised numbers have been slightly delayed this year and are set for release in September.

The decline comes as fund managers globally struggle with the pandemic’s effect on both financial markets and the realworld economy. Some stock markets have bounced back amid hopes of a fast recovery, yet rising case numbers have pushed many countries back into lockdown, hurting consumer spending and limiting already restricted travel.

“The market rebound we’ve seen in recent weeks should be viewed with caution,” Temasek International chief executive Dilhan Pillay said in pre-recorded comments released yesterday.

“The new Covid-normal will be even more complex. A lower-returns environment, geopolitics and strategic rivalries and the pandemic will create even more uncertainties for investors.”

Pillay said Temasek had been doing well in the three quarters leading up to the coronavirus outbreak, and that markets had rebounded since March.

He also emphasised that the company looks to long-term returns and said the portfolio, which includes both public and private holdings, had performed relatively well.

“We ended the year in a net cash position with a strong balance sheet,” Pillay said. “This positions us well to ride through the tough times to position our companies for future growth.”

Temasek has pledged to support several of its portfolio companies with billions of dollars in cash and other measures as the virus saps revenue and profits.

Singapore Airlines has a Temasek-backed plan to raise around S$8.8 billion, while Sembcorp Marine Ltd is embarking on a similarly supported capital round.

A unit of Temasek is in talks for a potential investment of at least $400 million in Singapore shipping tycoon Chang Yun Chung’s Pacific International Lines Pte, people familiar with the matter said in May.

It is also funding research efforts to fight Covid-19, as well as aiding the production of vital materials including swabs for test kits, face masks and hand sanitisers.