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 economic system stays in a “fragile state.”
“Amid the uncertainty in global markets, we steadily invested and divested to capture opportunities aligned with long-term structural trends,” Temasek mentioned in a press release. “We aim to construct a resilient and forward-looking portfolio, with sustainability at the core of all that we do.”
In its annual report launched Tuesday, Temasek mentioned one-year shareholder return was 5.81% in Singapore greenback phrases. Returns for the 20-year and 10-year had been respectively 8% and seven% compounded yearly, the agency added.
Throughout the monetary yr, the corporate invested S$61 billion and divested S$37 billion.
International economic system
Geopolitical uncertainties coupled with “rising inflation, surging commodity prices and severe supply chain bottlenecks have uncovered further fault lines in the global marketplace,” Temasek mentioned.
Given the “likelihood of a recession in developed markets over the next year, we maintain a cautious investment stance while staying focused on constructing a resilient portfolio underpinned by the structural trends we have identified,” mentioned 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 might face challenges reaching its 2022 development goal of 5.5%, given weak point in its development to date this yr, Temasek mentioned.
“Policy agencies are likely to maintain a supportive stance to buffer headwinds from soft property activity and pandemic restrictions,” the report famous.
As for Singapore’s economic system, the Singapore investor expects growth to be slower than earlier projected.
“Even though pandemic reopening will facilitate a stronger recovery in domestically-oriented and travel-related sectors, growth prospects in Singapore’s externally-oriented economy will be weighed down by the global backdrop and a risk of recession in developed markets,” Temasek mentioned.
Within the U.S., the labor market stays tight and inflationary pressures proceed to be robust, the report added.
Given tightening monetary circumstances and elevated geopolitical uncertainty, “growth is likely to slow meaningfully and below trend, raising the risks of a recession into 2023,” Temasek mentioned.
Local weather investments
Over the yr, Temasek boosted its efforts to spend money on 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 optimistic 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 compounds business.
The state investor mentioned it continues to have interaction with its portfolio firms 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 fuel 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 web revenue, Temasek mentioned.
