Temasek Hit By China Volatility

Euromoney, August 2016

The latest annual results from Temasek, Singapore’s sovereign wealth fund, are striking for two reasons. First, they answer the question of how badly hit the fund was by the downturn in Chinese stock markets (quite badly, it turned out). Second, they are a reminder of how unique Temasek is in the world of sovereign wealth.

Last year Temasek delivered a 19.2% return, this year a 9.02% loss. The single biggest reason for this was the fund’s China exposure, which stood at 27% of the fund in 2015 (the figure does not seem to be disclosed this year). Temasek’s reporting year runs April 1 to March 31, meaning that in the previous financial year it caught the dramatic rise of Chinese stocks and this financial year, the popping of the bubble and some of the subsequent rebound.

One question was whether Temasek was simply going to ride out the storm and trust its existing holdings or actively manage the portfolio; that question was answered too. The fund, which has a net portfolio value of S$242 billion ($178 billion) as of March 31, made S$28 billion of divestments and S$30 billion of investments during the year, a large turnover for a sovereign wealth fund.

Full article: http://www.euromoney.com/Article/3576372/Temasek-hit-by-China-volatility