Temasek makes $7.6b new investment
Temasek makes $7.6b new investment
Linus Chua and Chen Shiyin, Bloomberg/Kuala Lumpur
Temasek Holdings Pte, a Singapore state-owned investment company, invested S$13 billion (US$7.6 billion) in the year through March, with foreign holdings now making up more than half its S$103 billion portfolio.
The 31-year-old company, owned by Singapore's finance ministry, has also paid out an average S$1.3 billion in dividends to the Singapore government, according to a review of its performance published on Wednesday.
Temasek Chief Executive Ho Ching, 52, is investing outside of Singapore to try and lift returns that averaged 6 percent a year in the decade. Ho, who is married to Singapore Prime Minister Lee Hsien Loong, has overseen investments in China, India, South Korea and Indonesia since she became executive director in May 2002. She took the role of chief executive in January 2004.
"Increasing their investments overseas is a reasonable strategy to take," said Yang Sy Jian, research director at UOB- Kay Hian Pte in Singapore. "Singapore has reached a certain level of maturity and Temasek wants to broaden its exposure to the less-developed countries to bring up its growth potential."
Temasek's portfolio increased from S$90 billion a year earlier and the company reported a 30 percent return over two years. It had a 16 percent return on assets in the year through March, based on the market value of its investments.
The company's returns since it was formed offered an average annual dividend yield of more than 7 percent to the Finance Ministry, Temasek said.
More than S$10 billion of the investments were in Asia, where the company bought stakes in China's Minsheng Banking Corp., Pakistan's NDLC-IFIC Bank Ltd., India's Mahindra & Mahindra Ltd., and Malaysian Plantations Bhd.
Since the end of March, Temasek has also announced plans to buy a $3.6 billion stake in the Bank of China, the nation's second-largest bank, and $1 billion of stock in China Construction Bank, the third-largest Chinese lender.
"We will continue to seek new investments that will maximize value within our risk-return framework," Chairman S. Dhanabalan, 68, said in the review. "We have the flexibility to take a long view of our investments. We also have the option of taking concentrated positions."
The investment company said it's optimistic about Asia's "long-term" prospects and "cautious" in the short to medium term, according to the review. It is prepared to be "overweight" on cash if appropriate.
"The outlook in Asia appears to have moderated this year, with some uncertainties in the next couple of years," said Dhanabalan, a former cabinet minister. "We expect to maintain a cautious stance over this period."
Temasek posted a 3.8 percent rise in group net income to S$7.65 billion in the year to March 31, from S$7.37 billion a year earlier, it said. Sales rose 22 percent to S$68.7 billion, boosted by units such as Neptune Orient Lines Ltd., operator of Asia's second-largest container line, and Singapore Airlines Ltd., the world's No. 2 carrier by market value.
The company disclosed details of its profit in a prospectus to investors last month, when it sold $1.75 billion of 10-year notes. The bond issue, its first such sale, will help fund investments in foreign companies such as Bank of China.