The value of the Temasek portfolio increases slightly; the company is taking a cautious approach to China

By Yantoultra Ngui

SINGAPORE (Reuters) – Singapore’s state-owned investor Temasek said on Tuesday the net value of its portfolio had increased again, up 1.8 percent, as gains from investments in the United States and India helped cushion the impact of underperformance in China.

Significantly, Temasek’s exposure to the Americas exceeded its exposure to China for the first time in a decade, accounting for 22 percent of its portfolio in the year to the end of March, compared with 19 percent in China.

Temasek said it was taking a cautious approach to China and would continue to monitor the country’s government policies this year. Aside from Singapore – its largest market, which accounts for 27% of its portfolio – the US would remain a leading destination for its capital, followed by India and Europe.

The company added that it plans to increase its investments in Japan and Southeast Asia. Temasek is also considering expanding its presence in the Middle East, deputy CEO Chia Song Hwee said in an interview with Reuters.

“The economies (in the Middle East) are undergoing a process of transformation and opening up, and the political orientation is also more investor-friendly and market-oriented,” he said.

“So we are clearly seeing the change and are starting to spend time examining and evaluating the options.”

The increase in the value of Temasek’s portfolio to S$389 billion ($288.5 billion) compares with last year’s 5.2% decline, which marked the first decline since 2020 amid global economic uncertainty and a higher interest rate environment.

Chia said the company would continue to “reshape” its portfolio, including China, where geopolitical tensions remain a concern, and focus on businesses that are domestic-oriented and less reliant on exports, he said.

“A portfolio never remains static. And we try to constantly redesign it so that it is future-proof and sustainable, while ensuring that we can generate a sustainable return over the long term,” he added.

“Our portfolio in China is still very large, even at 19 percent it is still a large portfolio for us.”

Chinese companies Temasek has invested in include Alibaba Group and Tencent Holdings, in each of which it holds stakes of less than one percent. In the last financial year, the company also invested in Chinese electric vehicle maker BYD. The size of this stake was not disclosed.

In the USA, they have a stake of around three percent in the asset manager BlackRock, among others, and they also hold shares of less than one percent in the credit card payment companies Visa and Mastercard.

Regardless of the outcome of the US election in November, the world’s largest economy will remain an “interesting market” for Temasek due to the innovations and opportunities in the private credit and technology sectors, Chief Financial Officer Png Chin Yee said in a separate interview.

The story goes on

Temasek will continue to seek investment opportunities in artificial intelligence and green transformation, said Connie Chan, the company’s head of financial services.

In May, Temasek partnered with Canadian company Brookfield to invest in Neoen. The deal valued the French renewable energy producer at around 6.1 billion euros ($6.6 billion).

Other global investors also posted gains, reflecting the better-than-expected U.S. economy and growing expectations of lower interest rates.

This month, Japan’s Government Pension Investment Fund reported investment gains of $133.3 billion for the January-March quarter, while Saudi Arabia’s sovereign wealth fund PIF reported gains of $36.8 billion in 2023.

(1 US dollar = 1.3484 Singapore dollars)

(1 US dollar = 0.9228 euros)

(Reporting by Yantoultra Ngui; Editing by Sumeet Chatterjee and Edwina Gibbs)