Singapore’s Temasek set to report record portfolio

Temasek, the top investor in about a third of companies in Singapore’s Straits Times index, is expected to report a net portfolio value of about S$300 billion for the year ended March 31. (Reuters)
Updated 08 July 2018

Singapore’s Temasek set to report record portfolio

  • Analysts estimate Temasek to report a net portfolio value of about S$300 billion for the year ended March 31
  • Temasek reports its annual scorecard next week

SINGAPORE: Singapore state investor Temasek Holdings is likely to book a record S$300 billion ($221 billion) for the value of its portfolio, powered by gains in DBS Group and Chinese banks, while it steps up investment in tech startups.
At the same time, Temasek is swooping in on opportunistic purchases with its stake buy in Swiss-based airline caterer Gategroup Holding, weeks after an announced move to buy into Hainan Airlines Holding Co. Ltd. Both firms are part of China’s debt-saddled HNA Group Co. Ltd, which has been selling part of its holdings.
Analysts estimate Temasek, the top investor in about a third of companies in Singapore’s Straits Times index, to report a net portfolio value of about S$300 billion for the year ended March 31, up roughly 9 percent versus a nearly 14 percent increase to S$275 billion a year earlier.
Temasek said it will give details of its performance this week.
“Last year was a good year across all asset classes and across the world. A rise in its portfolio value to above S$300 billion is quite doable,” said Song Seng Wun, economist at CIMB Private Banking.
Last month, Temasek and GIC Pte Ltd, Singapore’s bigger state fund, featured among main investors in a record-setting $14 billion fundraising by China’s Ant Financial Services Group. Temasek also put more money into online Chinese services firm Meituan Dianping last year.
Meanwhile, MSCI’s Asia shares ex-Japan index advanced 18 percent in the year to March, while Singapore’s main index rose 8 percent.
Temasek reports its annual scorecard next week. Under Chief Executive Ho Ching, the wife of Singapore Prime Minister Lee Hsien Loong, it has become a global investor, plowing billions of dollars into startups and emerging markets in recent years.
Veljko Fotak, assistant professor of international finance, University at Buffalo in the United States, said that despite Temasek’s renewed emphasis on the tech sector, it is “at the same time, keeping its feet well on the ground, investing in real estate and infrastructure worldwide.”
Last year, Temasek’s Mapletree Investments Pte Ltd. bought a portfolio of student accommodation properties in North America worth $1.6 billion, expanding its exposure to the sector.
Analysts see no let-up in Temasek’s investments in start-ups, which often attract billion-dollar funding as they race to build up war chests to stay competitive.
“Tech investments this year have been focused on virtual reality, education tech startups, ride-hailing and fintech startups,” said Javier Capape, director of the Sovereign Wealth Lab at IE Business School.
Capape said though more sovereign wealth funds are joining the group of sovereign venture funds, Temasek was still leading in terms of capital deployed and activity.
Temasek also participated in a funding in Indonesian ride-hailing firm Go-Jek and led a $502 million investment in Magic Leap Inc, a US startup developing augmented reality tech products.
In the past year, Temasek benefited from a 42 percent surge in shares of DBS, while in Hong Kong, China Construction Bank Corp. and Industrial and Commercial Bank of China Ltd. rose 29 percent and over 32 percent respectively.

Oil hits three-month high as trade and Brexit fog lift

Updated 14 December 2019

Oil hits three-month high as trade and Brexit fog lift

  • Investor hopes on the rise after US-China progress and UK poll result ‘remove layer of uncertainty for global economy’

LONDON: Oil rose on Friday to its highest price in nearly three months as progress in resolving the US-China trade dispute and Britain’s general election result appeared to lift two clouds that have been dampening investor appetite for risk.

US sources said on Thursday that Washington has set its terms for a trade deal with Beijing, offering to suspend some tariffs on goods and cut others in exchange for Chinese purchases of more American farm goods.

Brent crude, the global benchmark, climbed to the highest since Sept. 23. It was up 45 cents at $64.65 in mid-afternoon trade in London as West Texas Intermediate crude gained 21 cents to $59.39.

The 18-month trade war has been a dampener for oil prices, while uncertainty around Brexit has also weighed. Britain’s ruling Conservative Party won a large majority in Thursday’s general election, giving it the power to take the country out of the EU.

“An eventful past 24 hours has removed a layer of uncertainty for the global economy,” said Stephen Brennock of oil broker PVM.

“Yet it remains to be seen whether the return of the feelgood factor is enough to set oil prices on a definitive northerly trajectory.”

A drop in the US dollar against the backdrop of a strong pound helped boost commodities. 

“Risk appetite among financial investors is now likely to remain high thanks to the deal between the US and China and the forthcoming end to the Brexit cliffhanger,” said Eugen Weinberg, an analyst at Commerzbank.

“This will also benefit the oil price,” he added.

Brent has rallied by almost 21 percent in 2019, supported by efforts by the Organization of the Petroleum Exporting Countries and allies including Russia to cut production.

The alliance, known as OPEC+, agreed last week to lower supply by a further 500,000 barrels per day as of Jan. 1. They have been limiting supply since 2017, helping to clear a glut that built up in 2014-2016.

OPEC’s own research indicates that the oil market in 2020 may see a small supply deficit, although the International Energy Agency sees global inventories rising despite the further step by OPEC+. 

Global stocks and sterling also gained on Friday as the double dose of relief around US-China trade and the UK election undercut safe-haven sovereign bonds and the Japanese yen, and led markets to scale back expectations of more interest rates cuts around the world.

“Global investors have been given two of the biggest gifts on their Christmas list and should be appreciative for a while at least,” said Sean Callow, a senior forex analyst at Westpac.

“Global equity indices such as MSCI World should set more record highs and sterling could push above $1.36.”

The pound reached its highest since mid-2018 as exit polls and then UK election results wiped out any chance of a victory by the left-wing Labour opposition or a hung parliament, which had been a worry for investors.

Prime Minster Boris Johnson won a commanding majority in Britain’s Parliament, giving him the power to deliver Brexit, though trade talks with the EU are set to drag on for months yet.