Singapore’s Temasek says its portfolio fell for the first time in four years due to Covid-19

SINGAPORE — Singapore’s state investment company Temasek said Tuesday the net value of its portfolio fell for the first time since 2016 as the coronavirus pandemic hit global markets.

The size of Temasek’s portfolio fell to 306 billion Singapore dollars ($223.73 billion) for the financial year that ended March 31, around 2.2% lower than the previous year’s 313 billion Singapore dollars, the company said in its annual report.

Its one-year shareholder return was minus 2.28%, said the company. But returns were 5% over a 10-year period and 6% over 20 years, it added. Those returns take into account all dividends paid to Temasek’s shareholder, less any capital injections.

Temasek — an active equity investor in both the public and private space — is owned by the government of Singapore, a tiny but wealthy Southeast Asian nation.

Temasek attributed its investment performance in the past year to the spread of the coronavirus disease, or Covid-19, which caused global markets to plunge in March. The company noted markets have recovered since then, but warned of uncertainties such as U.S.-China tensions.

Dilhan Pillay Sandrasegara, executive director and chief executive of Temasek International, said both the U.S. and China have been “significant destinations” for the company’s investments in the last five to six years.

He explained that what happens to the U.S.-China relationship can affect other economies and companies that operate globally, and Temasek is keeping a close watch on the developments relating to the two economic giants.

The company — a closely followed global investor — invested mainly in Singapore companies in its early days, but has turned into a major global investor in recent years. About three-quarters of Temasek’s portfolio exposure is outside its home country and in places such as China, North America and Europe. Two-thirds of its underlying exposure is in Asia, the report said.

Assets in China accounted for 29% of Temasek’s investment portfolio in the last financial year — the largest geographical share. That was followed by Singapore at 24% and North America at 17%, according to the company’s annual report.

In terms of sectors, the investor has the largest exposure to financial services, which accounted for around 23% of the underlying assets of its portfolio.

Temasek said it continued to invest in the financial services, technology and life science sectors. Overall, the company invested 32 billion Singapore dollars ($23.42 billion) and divested 26 billion Singapore dollars in the last financial year.