Singapore’s Temasek posts worst performance in 7 years, remains positive on China tech despite markets slump
- The firm’s drop in net portfolio value from US$300 billion to US$284.65 billion is its first since the 2020 financial year and came amid intensified global market volatility
- CFO Png Chin Yee said Temasek was optimistic with recent developments concerning Chinese tech, as most Chinese tech companies share prices have rallied since Friday
Singapore’s state-owned investor Temasek Holdings Pte warned of an uncertain road ahead as it chalked up its worst showing in seven years.
The firm with S$382 billion (US$284 billion) in assets posted a total shareholder return of -5.07 per cent for the year ended March 31, the poorest annual performance since 2016. It also suffered a rare net loss.
Its net portfolio value fell from the S$403 billion (US$300 billion) it held a year earlier. The company said the performance declines were led by a slump in equity valuations, while the S$7 billion (US$5.2 billion) loss was driven by mark-to-market accounting.
The investment climate has become much more complex than what we have encountered since the global financial crisis
Investors worldwide are facing a tough time as geopolitical tensions mount, China’s economy slows and central banks raise interest rates to combat inflation. Temasek’s Chief Executive Officer Dilhan Pillay also highlighted risks ranging from economic decoupling to protectionism and costs tied to energy security and transition.
“There are significant key challenges in the future,” Pillay said in a statement on the annual review – his second since taking charge in October 2021. “The investment climate has become much more complex than what we have encountered since the global financial crisis.”
The firm will invest at a moderated pace this financial year but is ready to step up its investments in a market correction, said Chief Investment Officer Rohit Sipahimalani, who flagged the risk of recessions in key developed markets.
“We do believe that to get inflation under control, we probably will need to see a recession, although the timing for that is uncertain,” Sipahimalani said at a news briefing.
