- Temasek reported a 1.6% one-year TSR for FY 2024, reversing previous year’s negative performance.
- Temasek’s NPV rose to $311B after marking unlisted portfolio to market.
- China’s underperformance impacted returns.
Temasek’s roller coaster ride
Temasek reported a one-year TSR of 1.6% for FY 2024, reversing the previous year’s negative performance.
However, the weak China market hampered the recovery. Temasek’s NPV stood at US$288 billion, up US$5.18 billion from a year ago, and after marking its unlisted portfolio to market, the NPV rose to US$311 billion.
Chia Song Hwee, the deputy CEO of Temasek, emphasized that the entity’s 10-year and 20-year TSRs, which remained at 6% and 7% respectively, are its main focus.
These longer-term TSRs are more indicative of Temasek’s performance and align with its mandate to generate sustainable returns over the long term.
Unveiling the secrets: the unlisted assets magic
Temasek refined its MTM methodology to better report its growing unlisted portfolio, which now accounts for more than 50% of its total portfolio.
The refined methodology resulted in a US$23 billion value uplift for Temasek’s unlisted portfolio, bringing its overall NPV to US$311 billion.
Temasek’s unlisted assets generated returns of 9% per annum over the last decade, outperforming the 6% return of its overall portfolio.
China’s market underperformance has impacted Temasek’s returns, with the MSCI China declining by 46% in the last three years.
Despite doubling down on investments in developed markets, Chia acknowledged that it will take time for Temasek’s portfolio to generate returns that offset the pressures from the China market.
Economists believe Temasek’s performance is commendable given the current economic climate.
To read the original article: https://www.techinasia.com/temasek-returns-black-fy2024
