Temasek Holdings on Tuesday (Jul 11) reported a 5.2 percent fall in the value of its net portfolio and signalled a “cautious” investment stance ahead amid a challenging macroeconomic environment.
For the financial year ended Mar 31, its net portfolio was valued at S$382 billion (US$287 billion), down S$21 billion from the record S$403 billion it achieved a year ago, according to its latest annual review.
Its one-year total shareholder return, which takes into account all dividends distributed to the shareholder minus any capital injections, turned negative to -5.07 percent from the 5.81 percent gain a year ago.
The performance for the past year can largely be attributed to a fall in equity valuations, both in the public and private markets, Temasek International’s chief financial officer Png Chin Yee said at a press conference.
While its portfolio companies in Singapore remained resilient, its global direct investments saw a reversal of gains from the high valuations in the last two years, particularly in the technology, healthcare, and payments space, as valuations de-rated in the higher interest rate environment.
The performance also factored in some impairments and write-downs over the past year, such as the write-down of its US$275 million investment into failed cryptocurrency firm FTX, according to Temasek’s representatives at the press conference.
The macro-environment was also a challenging one, marked by persistent inflation despite rate hikes by central banks, intensifying geopolitical tensions, and rising nationalism and protectionism that have led to a “marked shift” away from globalisation that has supported global growth over the past 20 years.
Temasek invested S$31 billion and divested S$27 billion in the last financial year, as it adopted a cautious approach amid global uncertainties. Deal activity globally also slowed down as liquidity tightened, it said.
Overall, Asia remained the anchor of the investor’s portfolio at 63 percent, with Singapore (28 percent), China (22 percent) and the Americas (21 percent) remaining the top three markets.
