Singapore's Temasek hit by first loss in 7 years

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#1
Singapore's Temasek hit by first loss in 7 years

Singapore state investment giant Temasek Holdings said Thursday its global portfolio suffered its first annual loss since the financial crisis seven years ago, as global stock markets were hit by a series of China-linked routs.
Temasek announced that the value of its global assets was Sg$242 billion ($180 billion) by March, down nine percent from last year's record Sg$266 billion.
The investment company said its net profit over the past year plunged 43 percent to Sg$8.0 billion.
Equity markets worldwide were hammered last summer by fears over China's economy as Beijing announced a shock devaluation of its yuan currency.
Another rout followed in January and February as questions were again raised about China's outlook and its leaders' ability to handle a long-running growth slowdown.
Both events wiped trillions of dollars off company valuations worldwide.
Temasek said in its annual report Thursday that the outlook was still tough, with the US economy heading for a modest growth path while China continues to see slowing expansion.
Europe's growth outlook has been dented by Britain's surprise vote last month to leave the European Union, it said.
"The external environment will remain quite challenging for Singapore given its intimate links to global trade and demand," Temasek said in a statement.
"However, Singapore's openness also means exposure to both mature and growth economies, which can provide opportunities for a balanced growth in future."
Temasek -- a strategic investor that stresses long-term performance rather than year-on-year gains -- holds among its portfolio telecoms group SingTel, Singapore Airlines and banking giant China Construction Bank.
Total shareholder return, which includes dividends, was minus 9.02 percent during the financial year ending March, but has averaged 15 percent since Temasek's inception in 1974.
Song Seng Wun, a Singapore-based economist with CIMB Private Banking, said Temasek performed better than expected as he had projected global assets to decline 10-15 percent.
"It's not so bad given the rout in equities in 2015," he told AFP.
Temasek said it made Sg$30 billion in new investments last year but also divested a record Sg$28 billion as the company adjusted its holdings amid the rapidly changing landscape.
Among its major investments was a $540 million injection in Univar, a US-based distributor of commodity and specialty chemicals. Temasek also continued its investments in biotechnology firms.
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#2
Total shareholder return average 15% since 1974 is considered very good right?
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#3
Temasek is intrinsically linked with Singapore's growth and consists of the portfoilo of Keppel, DBS, Singtel, St Electronics, Sembbcorp industries etc. While 15% per annum does seem very good, imo, it is due to the fact that many of these companies were small in the 70s and grew from a small base and followed the miraculous economic growth of our country.

For temasek to repat, these ""15% per annum" feat with these companies in the portfolio will be very difficult due to the law of large numbers.
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#4
(08-07-2016, 08:19 AM)Bibi Wrote: Total shareholder return average 15% since 1974 is considered very good right?

Yes thats great return no matter how you cut it. 
Technically the amount of money doubles once every 5 years.

This is what i expect since they are actively managing their money and not just sticking to worldwide 
stock indexes.
There are no good stocks. Stocks are only good when they go up after you bought them.
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#5
(08-07-2016, 09:20 AM)CY09 Wrote: Temasek is intrinsically linked with Singapore's growth and consists of the portfoilo of Keppel, DBS, Singtel, St Electronics, Sembbcorp industries etc. While 15% per annum does seem very good, imo, it is due to the fact that many of these companies were small in the 70s and grew from a small base and followed the miraculous economic growth of our country.

For temasek to repat, these ""15% per annum" feat with these companies in the portfolio will be very difficult due to the law of large numbers.

Yeah man. I'm quite sure that the returns from 40 years ago have probably very little to do with the current team. 

A better statistic would have been the returns from the past 10 to 20 years.....
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#6
(08-07-2016, 09:39 AM)HitandRun Wrote:
(08-07-2016, 09:20 AM)CY09 Wrote: Temasek is intrinsically linked with Singapore's growth and consists of the portfoilo of Keppel, DBS, Singtel, St Electronics, Sembbcorp industries etc. While 15% per annum does seem very good, imo, it is due to the fact that many of these companies were small in the 70s and grew from a small base and followed the miraculous economic growth of our country.

For temasek to repat, these ""15% per annum" feat with these companies in the portfolio will be very difficult due to the law of large numbers.

Yeah man. I'm quite sure that the returns from 40 years ago have probably very little to do with the current team. 

A better statistic would have been the returns from the past 10 to 20 years.....

True, long track records only make sense if is the same person or team with the same key leading.

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#7
Net profit S$8bio but total shareholders' return -9.02%? How does that work?

NB:
http://www.temasekreview.com.sg/download...w-2016.pdf
S$8b is not net profit... it is dividend income... reminder that reporters are not gospel Smile

In my view I still don't think Temasek should have transformed into a SWF (with leverage to boot) but should have continued to focus on strategic assets that are beneficial to Singapore's growth, including VC and PE rather than focus on secondary listed equities. That should be GIC's role. Trying to create a "competitor" to GIC is as smart as creating a competitor to Mediacorp when competitors are already abound.
Before you speak, listen. Before you write, think. Before you spend, earn. Before you invest, investigate. Before you criticize, wait. Before you pray, forgive. Before you quit, try. Before you retire, save. Before you die, give. –William A. Ward

Think Asset-Business-Structure (ABS)
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#8
(08-07-2016, 11:08 AM)specuvestor Wrote: Net profit S$8bio but total shareholders' return -9.02%? How does that work?

NB:
http://www.temasekreview.com.sg/download...w-2016.pdf
S$8b is not net profit... it is dividend income... reminder that reporters are not gospel Smile

In my view I still don't think Temasek should have transformed into a SWF (with leverage to boot) but should have continued to focus on strategic assets that are beneficial to Singapore's growth, including VC and PE rather than focus on secondary listed equities. That should be GIC's role. Trying to create a "competitor" to GIC is as smart as creating a competitor to Mediacorp when competitors are already abound.

I disagree. As a SWF, your competitors are legion and global. Both GIC and Temasek are locally based but should invest worldwide. Investing locally (whether strategic assets or not) is basically concentration risk on one hand (similar to yourself buying shares in the company you work in) and partially shields these companies from free market forces (e.g. OLAM). Singapore companies should try to compete for capital independently.
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#9
IIRC, Temasek and GIC has different focus, Temasek is more focused towards investing locally (astake in strategic assets e.g. SP powers, NCS, ST group, DBS, Certis Cisco, CPG) while GIC's focus is more towards overseas (e.g GLP)
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#10
(08-07-2016, 12:03 PM)CY09 Wrote: IIRC, Temasek and GIC has different focus, Temasek is more focused towards investing locally (astake in strategic assets e.g. SP powers, NCS, ST group, DBS, Certis Cisco, CPG)  while GIC's focus is more towards overseas (e.g GLP)

I realize that. But I think it is right that Temasek look more outward.

I would rather that GIC focus on capital preservation (i.e. less risk in trade weighted currency terms and against inflation) and Temasek as a regular go-go global investor. I might even welcome Temasek listing on one or more stock exchanges.
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