Temasek returns 13% in FY17 as stock markets lift portfolio to record S$275b

TEMASEK Holdings' investments returned 13 per cent in the year ended March 31, 2017, as robust stock markets lifted the listed portion of its portfolio.

The Singapore investment company said that its net portfolio value increased to a record-high S$275 billion, reversing a year-ago negative return of 9 per cent. The latest one-year performance beat Temasek's one-year risk adjusted hurdle rate of 7 per cent, which represents the firm's target return for its portfolio over that period.

Over a 20-year period, Temasek's rolling annualised return was 6 per cent, which matched its year-ago long-term return but fell short of its 20-year hurdle rate of 9 per cent.

High valuations, however, saw Temasek divesting S$18 billion, S$2 billion more than the S$16 billion that it put to work. It was the first net divestment year for the firm since fiscal 2009.

Temasek chairman Lim Boon Heng said in a statement: "While the global recovery is gaining momentum, there are still uncertainties, both in the medium as well as longer term. We have maintained an investment stance that is disciplined but nimble, and built a balance sheet that enables us to capitalise on opportunities and withstand shocks."

Listed investments remain the bulk of Temasek's holdings, with Singapore and China taking the largest slices of its allocations. The company has also been making investments with a technological bent, including a US$800 million injection into health sciences company Verily Life Sciences that was announced in January 2017.