Temasek’s portfolio jumps by a fifth to record; confident on China

By: | Published: July 8, 2015 8:10 AM

Stocks in China surged last year after the country moved to open up its equity markets with a stock trading link between Hong Kong and Shanghai

Singapore state investor Temasek Holdings said the value of its portfolio jumped by almost a fifth to a record S$266 billion ($197 billion) on the back of a surge in Chinese bank stocks and added it was confident in China’s long-term economic outlook.

The 19 percent gain was Temasek’s largest in five years and reflects its investments in lenders such as China Construction Bank and Industrial and Commercial Bank of China as well as holdings in leading Singapore firms. The previous year, its portfolio grew just 3.7 percent.

Stocks in China surged last year after the country moved to open up its equity markets with a stock trading link between Hong Kong and Shanghai. But in the last three weeks, they have tumbled some 30 percent, prompting authorities to unleash a slew of support measures.

“We remain confident in the long term prospect of the Chinese economy and we are very comfortable with the prospect of the Chinese banking system as well,” Wu Yibing, Temasek’s head of China told reporters at Temasek’s annual review.

Wu said concerns about credit risks in China did not play out as feared last year.

“We actually not only stuck to our position. We increased our position in the Chinese banking system and we believe that has paid off,” he said of investments made last year.

Temasek made new investments of S$30 billion in the year ended March, the biggest annual amount since the global financial crisis.

Singapore and China firms account for more than half of Temasek’s portfolio, but it is increasing investments in the United States and Europe.

Ravi Lambah, Temasek’s senior managing director of investment, said he sees opportunities in many U.S. sectors such as life sciences and energy, where U.S. companies have a comparative advantage versus global rivals.

Temasek has bought into life sciences companies such as BioMarin and Alexion and also taken a stake in energy firm Cheniere.

It also said Chief Executive Ho Ching, the wife of Prime Minister Lee Hsien Loong and who has been in her current role for more than a decade, would return to work when a three-month sabbatical ends this month.

Ho took leave after the death of her father-in-law, Lee Kuan Yew, Singapore’s first prime minister.

There has been persistent talk for years about how long Ho would stay at the helm. Temasek said the board looks at succession on an annual basis.

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