A Look at Temasek’s 2013 Year End Results

Temasek Holdings released its full year results last week. The portfolio hit a record of S$215 billion, and had a one-year Total Shareholder Return (TSR) of 8.86%. TSR calculations exclude capital injections by shareholders of Temasek and it includes dividends that its shareholder receives.

Temasek’s investments are mainly in Asia with 71% of its portfolio invested in the region. Out of the 71%, Singapore and China has the largest exposures by geography in terms of underlying assets, at 30% and 23% respectively. Developed markets like the US and Europe account for 25% of the portfolio while emerging markets take up 4%.

Equity Investments in Singapore

Some of the locally-listed equities that Temasek is invested in include SingTel (SGX: Z74), DBS Group Holdings Limited (SGX: D05), SembCorp Industries Limited (SGX: U96), Keppel Corporation Limited (SGX: BN4) and Olam International Limited (SGX: O32).

Singtel is the largest company by market capitalisation listed in our shores. Singtel is up 8.2% for the past one year. On the other hand, DBS is the largest bank in South East Asia and it is up 12.8% for the one year.

Looking at longer-term returns

One-year returns can fluctuate wildly based on how the stock market behaves, and we should not judge any portfolio based on short-term returns. The TSR for Temasek since inception at 1974 was 16% per annum, while the 20-year TSR is at 14% per annum, and the 10-year TSR is at 13% per annum. Investment in China

China constitutes 23% of Temasek’s portfolio. Temasek has indicated that it remains positive about the Chinese economy for the next 15 to 20 years. The company has investments in Industrial and Commercial Bank of China (ICBC) and recently raised its stake in the bank to 8.07%. It also has a 7% stake in China Construction Bank. Temasek invests in these banks as a proxy to the underlying economy. Also, the banks are very well-capitalised.

Temasek is a long-term investor and as such, short-term fluctuations should not bother it.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.  Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.