Singapore's Temasek investment growth slows
SINGAPORE (AP) — Singapore state investment company Temasek Holdings said growth in the value of its investments slowed in the last financial year as a weakening global economy undermined the value of Asian companies.
The value of the fund's investments rose 2.6 percent to 198 billion Singapore dollars ($157 billion) in the fiscal year ended March 31, Temasek said in its annual report Thursday. The portfolio rose 3.8 percent in the previous year.
Temasek has more than doubled from a SG$77 billion fund 10 years ago by placing big bets on Asian and financial services companies, though both of those sectors shrank as a percentage of the fund's overall investments in the past year due to a drop in the valuations of such companies.
It said Asian companies account for 72 percent of its investments, down from 77 percent in the previous year while financial services companies are 31 percent of the portfolio, down 5 percentage points.
Singapore's Finance Ministry is Temasek's only shareholder. The company, which is smaller than the city-state's other sovereign wealth fund, the Government of Singapore Investment Corp., owns large stakes in many of the country's biggest companies, including Singapore Telecommunications, DBS Bank and Singapore Airlines.
Temasek doubled the size of its investments in energy and resources companies during the year to 6 percent of its portfolio by buying stakes in U.S. companies such as Mosaic, FTS International and Clean Energy.
"Energy and resources will continue to be a growth segment that's got great long-term potential," said Chia Song Hwee, the fund's head of strategy. "We continue to look at opportunities in this area and invest in them accordingly."
Although investments in North America and Europe account for 11 percent of Temasek's portfolio, up from 8 percent a year earlier, Chia said Europe poses the biggest threat to global economic growth.
"The contagion risk out of Europe is potentially significant and therefore we will be very cautious in terms of investment opportunities over there," Chia said.
Temasek said its net profit fell to SG$11 billion from SG$13 billion the previous year amid lower earnings from the companies it has stakes in.
Temasek said the total shareholder return of its investments has grown 17 percent annually since the fund began in 1974.