Temasek Holdings, on September 8, reported a net portfolio value (NPV) of $306 billion for FY20 ended March, down 2.2% from the $313 billion posted in 2019.
One-year total shareholder return (TSR) fell into the red at -2.28%, a 3.77 percentage point drop from the 1.49% posted in FY19.
The one-year TSR takes into account all the dividends paid to Temasek’s sole shareholder, and excludes capital injections from the latter.
Annualised returns for Temasek’s TSR stood at 14% compounded over 46 years since 1974. Temasek’s 10- and 20-year TSRs stood at 5% and 6% respectively.
Dividend income for FY20 came in at $12 billion, 33.3% higher than the $9 billion reported in FY19.
In 2020, Temasek invested $32 billion, and divested $26 billion, ending the year with a “resilient” balance sheet.
According to a statement released by Temasek, its portfolio has a 66% exposure in Asia by underlying assets, with China and Singapore remaining its top two countries by concentration at 29% and 24% respectively.
The group says it has continued to grow its portfolio in North America (at 17%), where it sees “opportunities in line with key structural trends”.
North America and Europe now form over a quarter of Temasek’s underlying portfolio exposure.
Among its investments, Temasek says it continues to see “significant activities” in the financial services, technology, and life sciences sectors, with financial services remaining the largest sector in its portfolio at 23%.
In the financial services sector, Temasek increased its exposure to the payments sector and other non-bank financial services companies. It added its stakes in PayPal, Mastercard, and Visa, and invested in companies such as US-based digital lending platform for mortgages and consumer banking Blend.
New technology investments during the year include Duck Creek Technologies, a US-based software provider to the property and casualty insurance industry; ManoMano, a European home improvement product online marketplace; and MiningLamp, a big data solutions company in China.
Life sciences and healthcare investments included AIER Eye Hospital in China, integrated healthcare system CareBridge, and biopharma companies developing new drugs and therapeutic solutions.
Investments in sustainable living include Asian solar developer Sunseap, and an increase in exposure to companies producing alternative and plant-based proteins including Impossible Foods and Perfect Day.
Investments in Singapore companies include cashback platform ShopBack and Growthwell Group, which makes plant-based meat alternatives.
“These create longer term growth opportunities that complement our exposure in major Singapore holdings and efforts by Heliconia Capital to enable small and medium enterprises to scale beyond Singapore,” says the group.
The group also collaborated with the Monetary Authority of Singapore (MAS) and JP Morgan to develop a blockchain-based prototype for multi-currency payments.
In May, Temasek joined Libra Association, the organisation behind Facebook’s proposed digital currency.
On September 1, Temasek, along with Singapore Exchange (SGX) and HSBC completed Asia’s first digital bond issuance for Olam International.
Sustainability is also a big theme for Temasek.
“As an owner, we want to own a resilient portfolio of companies which contributes to the progress of society,” it says.
“One key target is to reduce net emissions attributable to our portfolio to about seven million tonnes of CO2e by 2030. This represents half the estimated carbon emissions attributable to our portfolio in 2010, and approximately a quarter of the estimated emissions in 2020,” it adds.
In addition, the group has strengthened its environmental, social, and governance (ESG) framework, and have mainstreamed sustainability considerations in its investment and portfolio management processes.
Looking ahead, the group warns that the global market outlook remains “volatile and uncertain”.
“There remain growing concerns around rising geopolitical and trade tensions caused by the US-China strategic rivalry and the impending US presidential election in November. These would likely create a more challenging environment for long term investors and asset owners. Hence, we remain cautious and watchful around the risks surrounding the global economy,” says Michael Buchanan, head of macro strategy and head of portfolio strategy and risk group at Temasek.
“The COVID-19 pandemic has amplified and accelerated the structural trends that guide our investment direction. These trends are driven by social progress, demographic shifts and changing consumption patterns, as well as enabled by technological advances. They have been brought into sharper focus for us by this pandemic,” says Yeoh Keat Chuan, senior managing director, enterprise development group, and deputy head of Singapore projects at Temasek.
“One way for us to shape our portfolio for the future is to seek innovative companies at the forefront of developing new, sometimes disruptive, solutions that create new opportunities,” Yeoh adds.
