Temasek portfolio likely shrank in fiscal year

DBS signage at the DBS Marina Regatta dragon boat race on 2 June 2019.DBS signage at the DBS Marina Regatta dragon boat race on 2 June 2019.

Singapore state-owned investment company Temasek Holdings‘ portfolio likely walked back some of fiscal 2018’s surge to a record high of S$308 billion.

CIMB forecast the portfolio likely shrank to just under S$300 billion by the 31 March 2019 close of the fiscal year amid tougher market conditions. The results are due Tuesday afternoon.

Over the course of the fiscal year, markets were buffeted by an escalating U.S. trade war and other geopolitical tensions, as well as rising interest rates in the U.S.

Some of Temasek’s largest listed holdings weren’t immune.

For example, DBS Bank‘s shares ended the 2019 fiscal year at S$25.23, 8.25 percent lower than the previous fiscal year’s close; it hasn’t recovered much since then, trading at S$25.40 at around midday Monday.

Temasek holds a 29.87 percent stake in DBS, according to SGX data. That would be an increase from the 29 percent in last year’s review.

Clipped wings?

Similarly, shares of Singapore Airlines were down nearly 11 percent over the course of the fiscal year ended 31 March, to close out the period at S$9.66 each. The shares were trading at S$9.43 around midday Monday.

Temasek held 56 percent of Singapore Airlines as of the end of fiscal 2018, according to last year’s review; SGX data shows the stake at 54.91 percent currently.

Another large holding, Sembcorp Industries, also saw its share price drop 18 percent over the fiscal year to close out the period at S$2.55; it was trading at S$2.40 around midday Monday.

Temasek held 49 percent of Sembcorp Industries, according to last year’s review, while SGX data currently indicates it holds 49.45 percent.

Even some of the investment company’s high-flying Chinese tech plays are set to weigh on the portfolio total.

Alibaba Group, in which Temasek had an around 1 percent stake based on last year’s review, saw its shares edge down less than 1 percent over the fiscal year to US$182.45 as of 29 March. The shares closed Friday at US$173.30.

To be sure, Temasek is likely sitting on overall gains on Alibaba, as it acquired its stake prior to the company’s listing.

Tencent, in which the investment company had a less than 1 percent stake according to last year’s review, has also lost ground over the fiscal year. The shares dropped nearly 12 percent over the fiscal year to close at HK$361 on 29 March; the stock was trading at HK$353.20 at midday Monday.

Impossibly positive?

The company likely has some unlisted winners in its portfolio.

Temasek has been investing in meatless-burger maker Impossible Foods since at least 2017. Impossible Foods’ Impossible Burger scored a victory earlier this year when Burger King said initial market tests of the meatless patty scored so well that the fast-food company would roll it out nationwide.

While Impossible Foods is unlisted, rival player Beyond Meat’s shares more than doubled in the company’s IPO in May; its shares were priced at US$25 a share and on Friday, they closed at US$152.63.

That’s not the only play on going animal free: Temasek also has invested in animal-free diary ingredient maker Perfect Day.

Other holdings

Among Temasek’s other listed financial holdings, it held 3 percent of AIA Group, 4 percent of China Construction Bank, 2 percent of ICBC, 54 percent of PT Bank Danamon Indonesia and 16 percent of Standard Chartered, as of end-March of 2018, according to last year’s review.

In the telecom, media and technology (TMT) segment, Temasek held 52 percent of Singtel and 4 percent of IHS Markit as of end-March 2018, according to last year’s review.

In the consumer and property segments, it held 40 percent of CapitaLand, 54 percent of Olam International and 40 percent of SATS as of end-March 2018, according to the year-ago review.

It also held 20 percent of Keppel Corp. and 51 percent of ST Engineering, as of the end of fiscal 2018, according to last year’s review.

While you’re here, we’re hoping you can help us out.

Shenton Wire has been providing you with quick news and market analysis. But we need your support to continue to bring you the news you’ve come to expect and to expand our reach beyond Singapore.

Your monthly contribution will directly fund our journalism.

S$2     S$4       S$8

S$18       S$28       S$88

You can check your existing account here. You can also contact us about other contribution levels or for corporate subscriptions and syndication queries.