Singapore state-owned investment company Temasek Holdings’s net portfolio value declined 2.2% as its financial year-end coincided “with the worst of the market dislocation” from the coronavirus pandemic.
Preliminary figures show that the company’s net portfolio value fell to S$306 billion (US$214 billion) in the financial year ended March 31, 2020 from S$313 billion a year ago.
“The end of our financial year coincided with the worst of the market dislocation during the onset of Covid-19. The markets bottomed on March 23. Up until the end of January, our portfolio value had trended well,” Dilhan Pillay, chief executive officer of Temasek International, the state firm’s management and investment unit, says in a statement posted on the company’s website on July 21.
Temasek will release the final audited figures in September. Mr. Pillay says the final portfolio performance isn’t expected to be materially different from the preliminary figures.
Temasek’s one-year total shareholder return dropped to minus 2.3%, reversing from a 1.49% gain in 2019.
According to Mr. Pillay, Temasek’s portfolio is “resilient”, and the company closed the financial year with “net cash position with a strong balance sheet”.
“This positions us well to ride through the tough times, to position our companies for future growth, and in other opportunities that may present itself,” he says.
He adds that Temasek’s long-term performance remains relatively stable, with an annualised return of 14% since its inception in 1974.
“We aim to build a resilient portfolio as a long-term investor. On the whole, we are pleased with our performance, despite the sharp correction due to Covid-19,” he says.
Mr. Pillay says Temasek doesn’t manage its portfolio by reacting to short-term changes in market value.
“Instead, we focus on key structural trends like sustainable living and longer lifespans, and seek to deliver sustainable returns over the long term,” he says.