Singapore’s Temasek, one of the world’s largest investors, reported its strongest returns in more than a decade and expressed confidence in its Chinese assets despite a regulatory crackdown on its portfolio company Didi Chuxing.
The state-backed investment company said on Tuesday that its one-year shareholder return in the 12 months to March jumped to 24.53 per cent. That was the highest since 2010, when it registered a 43 per cent return as markets bounced back after the global financial crisis.
In the 12 months to March 2020, Temasek posted shareholder returns of minus 2.28 per cent.
Temasek’s performance was buoyed by multibillion-dollar stock market debuts. US food delivery app DoorDash, holiday rentals company Airbnb and Chinese short-video app Kuaishou were among the Temasek-backed groups that listed during the period.
“A number of these companies are levered to trends such as digitisation that got accelerated during the pandemic,” said Mukul Chawla, joint head of telecommunications, media and technology at Temasek. “It was a great opportunity for these companies to further strengthen their balance sheets using public capital”.
Temasek was among the investors in the initial public offering of Didi, the Chinese ride-hailing app, whose share price has plunged after it was hit by a domestic regulatory investigation days after its $4.4bn New York listing this month.
Beijing triggered more investor unease last week, announcing that it would tighten restrictions on overseas listings, endangering a pipeline of Chinese companies keen to raise capital on Wall Street. But Chawla said that regulatory risk was not “unique to China”, adding it did not “change our stance on China in any way”.
The investment company also reported a record net portfolio value of S$381bn (US$282bn) after a fall to S$306bn in the preceding 12 months. The boost to Temasek’s portfolio followed a strong recovery in global equities from March 2020 after markets were battered at the onset of the coronavirus pandemic.
Temasek also invested in Ant Group, the Chinese fintech founded by billionaire Jack Ma. Ant’s $37bn IPO was suspended by Beijing at the last minute in November.
Temasek does not disclose a full breakdown of how it allocates capital, but information the fund does share showed its largest exposure continued to be China. Its holdings in the country, which include its portfolio companies’ underlying assets, surpassed those of Singapore for the first time in the 12 months to March 2020.
The Americas accounted for the largest share of Temasek’s new investments in the 12 months to March, followed by Singapore and China.
Temasek said its investments and divestments reached records of S$49bn and S$39bn, respectively, during the period.
The fund is also undergoing a leadership change, with its head Ho Ching announcing this year that she would step down in October after almost two decades at the helm. Ho, who is the wife of Singapore’s prime minister Lee Hsien Loong, will be succeeded by Dilhan Pillay, chief executive of investment arm Temasek International.
Temasek has come to the aid of Singaporean companies in its portfolio that struggled through the coronavirus crisis, supporting the rights issues of flag carrier Singapore Airlines and Sembcorp Marine, a marine and offshore engineering group.