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Tue, September 08, 2020 – 3:00 PM
TEMASEK Holdings reported on Tuesday that its one-year total shareholder return (TSR) had fallen into negative territory to -2.28 percent for the 12 months ended March 31, 2020, in part due to the sharp correction in the market in the quarter to March. 31 in response to the appearance of Covid-19.
This is a further drop from the one-year TSR of the previous fiscal year, which had fallen to 1.49 percent. TSR is a compound and annualized measure that includes dividends paid to your shareholder but excludes capital injections from your shareholder. Composed over 46 years from its inception in 1974, annualized returns stood at 14 percent.
The net worth of the Singapore investment firm’s portfolio decreased to S $ 306 billion, roughly 2.2 percent down from the prior year S $ 313 billion on a Singapore dollar conversion basis. it said in its annual report released Tuesday. The latest portfolio net worth is also slightly less than the S $ 308 billion in fiscal 2018.
Investments outperformed divestments during the year. Temasek invested about S $ 32 billion in assets and divested about S $ 26 billion in the same period. He ended the year with a “resilient balance sheet,” said Temasek.
However, growing concerns remain due to growing geopolitical and trade tensions caused by the strategic rivalry between the United States and China and the impending US presidential election, said Michael Buchanan, head of macro strategy and head of portfolio and group strategy. risk, in a communication medium. statement.
“This would likely create a more challenging environment for long-term investors and asset owners. Therefore, we remain cautious and vigilant about the risks surrounding the global economy,” Buchanan said.
Meanwhile, the outlook for China is positive in the medium term, as recent data suggests that the domestic economic recovery is underway and work has been steadily resumed, Temasek said. The state investment firm expects general policy to remain flexible to support economic and employment recovery.
In Singapore, the economy has seen a sharp contraction, Temasek said. “Nonetheless, parts of the economy have shown resilience and continued fiscal support has helped support employment and ease pressures on businesses.”
In this context, its portfolio remained anchored in Asia with an exposure of 66% in the region by underlying assets, with China and Singapore being the two countries with the highest concentration, with 29% and 24% respectively as of March 31, 2020.
Meanwhile, its exposure to the North American market stood at 17% and in Europe at 10%.
Geographically, the United States again accounted for the bulk of Temasek’s new investments during the year, followed by China and Singapore.
Its exposure to financial services remained the largest, standing at 23%. Temasek said it had increased its exposure to the payments sector and other non-bank financial services companies such as PayPal, Mastercard and Visa, to benefit from the acceleration in the digitization of financial services.
Investment in the technology, media and telecommunications and life sciences sectors also remained significant.
New technology investments included Duck Creek Technologies, a US-based software provider for the property and casualty insurance industry; ManoMano, a European online marketplace for home improvement products; and MiningLamp, a Big Data solutions company in China.
Investments in life sciences and healthcare, on the other hand, included AIER Eye Hospital; CareBridge, an integrated healthcare system; and biopharmaceutical companies developing new drugs and therapeutic solutions such as Beam Therapeutics, Coherus BioSciences, Transcenta, and Vir Biotechnology.
Sustainability, on the other hand, remains a key area of focus for Temasek.
“As owners, we want to own a resilient portfolio of companies that contributes to the advancement of society. We will invest in negative emissions technologies and nature-based solutions. Meanwhile, climate risk analysis, including an internal carbon price, it will guide decisions about our new investments in the next decade, “said Temasek.
A key goal is to halve the net carbon emissions of its portfolio by 2030 and, in the long term, deliver a net zero emissions portfolio by 2050. Temasek ended the year carbon neutral.
Another area of focus is innovation, which includes building new capabilities in areas such as blockchain artificial intelligence and cybersecurity.
“These are new business opportunities that can provide our portfolio companies and ecosystem partners with a talent pool and a suite of services,” said Temasek.
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