Temasek’s net portfolio value falls 2.2% amid pandemic

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It says group was not spared impact of Covid-19 but still outperformed market indexes

The Covid-19 pandemic took its toll on Temasek' s portfolio but did not hurt it too badly, preliminary numbers released yesterday showed.

The net portfolio value (NPV) shrank for the first time in four years and the total shareholder return (TSR) for one year slipped into negative territory.

Still, given how hard the pandemic has hit markets overall, Temasek International chief executive Dilhan Pillay Sandrasegara said in a media statement: "On the whole, we are pleased with our performance, despite the sharp correction due to Covid-19."

Temasek's NPV stood at $306 billion as of March 31 - a 2.2 per cent drop - lower than its record $313 billion last year. Its one-year TSR dropped to minus 2.3 per cent, from 1.49 per cent previously, according to preliminary figures that are based on current unaudited information.

Temasek's final numbers will be out in September, as its chief executive Ho Ching had flagged earlier that the pandemic had affected financial reporting for many of its portfolio companies.

Still, the group's final performance results are not likely to differ materially from the preliminary numbers, it noted.

"We were not spared the impact of Covid," said Mr Pillay, adding that the end of Tema-sek's financial year coincided with some of the worst of the market dislocation during the pandemic. Since then, however, the value of its listed assets has risen.

Temasek also said it outperformed market indexes during the virus-induced downturn, as it did during the Sars epidemic in 2003 and the global financial crisis in 2009.

It stressed that it is an investor with a long-term horizon. Its NPV had grown steadily before the onset of the virus and tripled from $90 billion in 2004, when it produced its first annual performance report.

Its TSR over the last 16 years is 7.5 per cent. TSR takes into account all dividends distributed to shareholders minus capital injections.

On how it has performed over the past year relative to market indexes in Asia, Temasek said its portfolio "stayed resilient" with a 2.3 per cent decline, compared with the MSCI Singapore Index and the MSCI AC Asia ex-Japan Index, which fell 18.3 per cent and 9.0 per cent respectively.

Mr Pillay cautioned that rising geopolitical and trade tensions - now exacerbated by Covid-19 - will create more uncertainties for long-term investors and asset owners.

But Temasek has a good mix of listed and unlisted investments, a good balance between portfolio stalwarts, and new investments into emerging and longer-term trends, which add to its resilience, he said.

Its unlisted portfolio companies, such as port operator PSA, also continue to provide steady returns, said Mr Pillay, even as it gears up for future challenges like the hydrogen economy.

Maybank Kim Eng senior economist Chua Hak Bin said yesterday that Temasek's performance was commendable, given the steep stock market plunge in March. "Most equity funds were probably down 10 per cent to 20 per cent in that same timeframe," he added.