A signage for Temasek Holdings is displayed throughout a information convention following the corporate’s annual evaluate in Singapore on July 9, 2019.
Bryan van der Beek | Bloomberg | Getty Photos
SINGAPORE — Temasek Holdings reported Tuesday that the web worth of its portfolio grew to $286.48 billion (403 billion Singapore {dollars}) on the finish of March — that is S$22 billion increased than the earlier yr, surpassing final yr’s file excessive.
Nonetheless, the state-owned investor warned that the outlook for the worldwide financial system stays in a “fragile state.”
“Amid the uncertainty in international markets, we steadily invested and divested to seize alternatives aligned with long-term structural developments,” Temasek stated in a press release. “We intention to assemble a resilient and forward-looking portfolio, with sustainability on the core of all that we do.”
In its annual report launched Tuesday, Temasek stated one-year shareholder return was 5.81% in Singapore greenback phrases. Returns for the 20-year and 10-year have been respectively 8% and seven% compounded yearly, the agency added.
In the course of the monetary yr, the corporate invested S$61 billion and divested S$37 billion.
World financial system
Geopolitical uncertainties coupled with “rising inflation, surging commodity costs and extreme provide chain bottlenecks have uncovered additional fault strains within the international market,” Temasek stated.
Given the “chance of a recession in developed markets over the following yr, we keep a cautious funding stance whereas staying targeted on setting up a resilient portfolio underpinned by the structural developments we’ve got recognized,” stated Rohit Sipahimalani, Temasek’s chief funding officer.
Greater than 60% of Temasek’s portfolio is in Asia, with Singapore making up 27% of it and China accounting for 22%.
China could face challenges reaching its 2022 development goal of 5.5%, given weak spot in its development to this point this yr, Temasek stated.
“Coverage companies are prone to keep a supportive stance to buffer headwinds from comfortable property exercise and pandemic restrictions,” the report famous.
As for Singapore’s financial system, the Singapore investor expects enlargement to be slower than earlier projected.
“Regardless that pandemic reopening will facilitate a stronger restoration in domestically-oriented and travel-related sectors, development prospects in Singapore’s externally-oriented financial system might be weighed down by the worldwide backdrop and a threat of recession in developed markets,” Temasek stated.
Within the U.S., the labor market stays tight and inflationary pressures proceed to be robust, the report added.
Given tightening monetary situations and elevated geopolitical uncertainty, “development is prone to gradual meaningfully and under development, elevating the dangers of a recession into 2023,” Temasek stated.
Local weather investments
Over the yr, Temasek boosted its efforts to put money into climate-related alternatives, and inspired decarbonization efforts in companies.
In June, it arrange GenZero — an funding platform firm wholly owned by Temasek — which seeks to ship constructive local weather impression along with sustainable monetary returns for the long run.
It has additionally invested in Ambercycle, an LA-based supplies science firm, which makes use of novel molecular separation applied sciences to recycle textiles into virgin-grade polyester. Temasek additionally elevated its publicity in Solugen, a sustainable chemical start-up working to decarbonize the chemical substances trade.
The state investor stated it continues to interact with its portfolio corporations in rising capability for sustainability management and local weather transition administration.
For instance, Singapore Airways is engaged on a pilot with the Civil Aviation Authority of Singapore to make use of sustainable aviation gasoline on SIA and Scoot flights. Individually, Sembcorp Industries hopes that by 2025, the corporate will be capable to make its sustainable options portfolio contribute 70% of the group’s internet revenue, Temasek stated.