Temasek sees highest shareholder return since 2010

Its one-year return is at 24.53 per cent, an increase from last year's minus 2.28 per cent

Singapore investment company Temasek's shareholder return climbed smartly in its latest financial year, potentially raising its contributions to the Republic's coffers.

Its one-year return for shareholders came in at 24.53 per cent, a turnaround from last year's minus 2.28 per cent. This is its highest one-year return since 2010, it said in its annual review yesterday.

Temasek's portfolio was valued at a record $381 billion as at March 31, up from $306 billion a year before, on the back of a rally in global markets.

Temasek's investments benefit Singaporeans through its Net Investment Returns Contribution (NIRC) to the annual Budget.

Under the NIRC framework, the Government can spend up to half of the long-term expected investment returns generated by Temasek, sovereign wealth fund GIC and the Monetary Authority of Singapore, the three entities tasked to invest Singapore's reserves.

Total shareholder return over 10 years was 7 per cent, up from 5 per cent a year ago, while its return over 20 years increased to 8 per cent, it said.

In the last fiscal year, Temasek invested a record $49 billion, including in Singapore's national carrier Singapore Airlines, marine and offshore player Sembcorp Marine and agri-food company Olam International. It also divested a high of $39 billion.

Analysts said that aside from the contributions to Singapore's fiscal Budget, Temasek's investments have also provided a boost to local enterprises.

CIMB Private Banking economist Song Seng Wun said Temasek's investments in companies and their expansion here also contribute to more job opportunities.

National University of Singapore Business School's Associate Professor Lawrence Loh agreed, noting how local small and medium-sized enterprises (SMEs) have been revitalised by business opportunities arising in the ecosystem.

"For instance, Temasek's involvement in its portfolio companies, including the recent financial injections, has provided means by which the local SMEs can offer supplies, thus retaining their business viability," he said.

Mr Song said Temasek's portfolio rebalancing every year and its investments and divestments are key to ensuring sustainable long-term returns.

Financial services remain the largest sector in Temasek's portfolio at 24 per cent, with telecommunications, media and technology (TMT) accounting for another 21 per cent.

But the composition of companies in these sectors has changed significantly over the last decade, Temasek said.

Its financial services portfolio has evolved from mainly banks to include fintech, insurance and payments, while its TMT investments now have a strong focus on the tech space with e-commerce, sharing economy and digital content investments.

Unlisted assets continued to make up the highest share of its portfolio in the latest fiscal year, at 45 per cent.