Temasek releases its latest annual review

“This year has been one of our most active years for new investments – the most active since the global financial crisis – driven by softer Asian markets of interest, as well as the continued recovery of the global economy," said Temasek chairman Lim Boon Heng.

"In the course of the past year, the US tapered its loose monetary stance and China reined in its debt fuelled growth. This bodes well for the longer term, though major central banks will most likely take some years to unwind the massive balance sheet expansions of the past five years," noted Lim.

Accordingly, Temasek's one-year total shareholder return, or TSR, was 1.5 per cent in Singapore dollar terms, mainly due to weakness in the company’s key markets in Asia.

Its 10-year TSR was 9 per cent, reflecting steady growth in its portfolio, which was up S$133 billion from S$90 billion 10 years ago.

Longer term 20-year TSR was 6 per cent, coming from a portfolio high with the listing of SingTel in late 1993 while the TSR since its inception in 1974 was 16 per cent.

On a consolidated basis, group shareholder equity was S$187 billion, up S$122 billion from 10 years earlier and group net profit held steady at S$11 billion, above its 10-year average group net profit of S$10 billion.

Over the past decade, the company has invested almost S$180 billion and divested nearly S$110 billion.

Its investments last year totalled S$24 billion, half of which were in Asia as lower asset prices offered attractive investment opportunities, and two fifths in Europe and North America. The top three sectors for investments during the year were financial services, life sciences and energy. The company plans to step up investment activities in the consumer sector towards the year end.

The top three countries in the company portfolio, based on the underlying assets, are Singapore, China and Australia at 31 per cent, 25 per cent and 10 per cent, respectively, as at March 31, 2014. Investments in third-party managed funds stood at less than 10 per cent of the company’s portfolio.

“We have invested in opportunities that are driven by urbanisation and increasing life expectancies. Rapid advances in technology have transformed the global marketplace, as people and machines become ever more connected," said Lee Theng Kiat, president of Temasek.

"As an owner investor for the long term, we are ready to support new ideas to address emerging needs and opportunities, like health care for an ageing population, personalised medicine, or e-commerce,” he added.

Kiat further elaborated “Half of our new investments last year were in Asia, as weakness in the growth markets gave us various opportunities to add to the positions we like.

Europe and North America accounted for about 40 per cent of our new investments. In absolute dollars, investments into these two regions increased by 60 per cent compared to the previous year.”

As a responsible long term investor, since 200 Temasek has had a policy of setting aside a share of positive annual returns for community endowments.

Since its founding in 1974, the company has established 16 endowments, and co-funded other community initiatives, to build people, communities, and capabilities, and rebuild lives in Singapore and Asia. In the past 10 years, the company endowments and charities have touched over 170,000 lives, through the dedication, and the hard and heart work of their respective boards and managements.

To mark its 40th anniversary this year, Temasek launched a new S$40 million endowment in March 2014 – the Temasek Emergency Preparedness Fund, or T-PREP Fund, to be managed by Temasek Cares. This fund supports programmes that help communities to prepare for and recover from emergencies, traumas and disasters.

Under the second programme of the T-PREP Fund, Temasek Cares partnered with Singapore Power and Singapore Post in May 2014 to distribute emergency preparedness starter kits to all 1.2 million households in Singapore.

Each kit included N95 masks useable for protection against airborne pandemic transmissions or severe haze. The kits helped to remind Singapore households to stay prepared for various emergencies.

Incorporated in 1974, Temasek has offices in 11 cities around the world, including São Paulo and Mexico City in Latin America; and London and New York, which both opened in 2014. The remaining offices are all in Asia, including China and India. The company has had a corporate credit rating of AAA/Aaa since its inaugural credit rating in 2004, by rating agencies Standard & Poor's and Moody's respectively.