Temasek’s Net Portfolio Value Down!

Singapore state-owned investment firm Temasek Holdings has reported a net portfolio value of S$382 billion (RM1.3 trillion) for FY2023, 5.2% lower than its previous net portfolio value of S$403 billion in FY 2022.

The group reported a loss of S$7.3 billion, from last year’s net profit of S$10.6 billion. This was attributable to changes in accounting standards, which includes mark-to-market (MTM) gains and losses. 

Source: https://www.pionline.com

Temasek’s one-year total shareholder return (TSR) was -5.07%, while its TSR since its inception in 1974 remained at 14%, unchanged from last year. The group’s 20-year and 10-year TSRs for this FY stood at 9% and 6% respectively.

Over FY2023, Temasek invested $31 billion and divested $27 billion, resulting in a net investment of $4 billion.  As at March 31, Temasek’s portfolio remains anchored in Asia with a total of 63%. In terms of geography, Singapore, China and the Americas remained the group’s three largest markets by underlying exposure with 28%, 22% and 21% respectively.

In terms of sectors, transportation and industrials made up the majority of Temasek’s portfolio at 23%, one percentage point higher y-o-y. Financial services, which stood on top in the year before, fell to second place at 21%, down two percentage points y-o-y.

Telecommunications, media and technology rounded up the top three sectors at 17% in FY2023, down one percentage point y-o-y.

Temasek’s unlisted assets also outperformed its listed assets with an internal rate of return (IRR) of 14.4% over a 20-year period. This is compared to the IRR of 8.0% for its listed assets and 10.1% for its overall assets over the same period. Early stage investments, which are capped at 6% of Temasek’s portfolio, have also outperformed the group’s overall portfolio with a seven-year IRR of 10.9% versus its overall portfolio’s IRR of 7.8%. As at March 31, the group ended the year with net cash. Of its portfolio, liquid and sub-20% listed assets stood at 27% while unlisted assets made up 53% of its portfolio.

On FTX, chief investment officer viewed the decision to invest into the crypto firm was one that the group was “disappointed” in. Temasek had made the decision to write down over US$200 million ($268.3 million) that was invested into FTX in November 2022. The group subsequently announced that they had cut the pay of those who were responsible for the investment in FTX in May due to the “reputational hit”.

There are consequences for certain investment losses – pay-cut for staff responsible. Do we do that at Khazanah?

Reference:

Temasek’s net portfolio value down by 5.2% y-o-y to S$382 bil; reports S$7.3 bil loss, TheEdgeSingapore.com, 12 July 2023