Temasek Holdings Pte’s portfolio declined in value for the first time in seven years as its holdings, a quarter of which are in Chinese equities, were battered by last year’s market rout, Bloomberg reports.
Stakes of the Singaporean state investment firm fell 9 percent to S$242 billion (US$179 billion) in the fiscal year ended March 31, according to Temasek’s annual review released on Thursday.
Assets fell from a record S$266 billion in the prior fiscal year and dropped for the first time since the 12 months ended March 2009.
Amid slowing global growth and rising market volatility, Temasek is cutting its exposure to banks while adding to holdings in media, telecommunications, and technology companies, with the latter group overtaking financial firms as its biggest industry sector.
“The equity markets around the world will remain susceptible to bouts of volatility in the short and medium term,” Michael Buchanan, Temasek’s senior managing director, portfolio strategy and risk group, said in a statement.
“There is increased uncertainty, partly reflecting the ongoing hangover from the excesses that help cause the global financial crisis. This suggests an environment of lower returns in the years ahead.”
Temasek made a 6 percent annualized total shareholder return, including dividends, over the last 10-year and 20-year periods.
The compounded total shareholder return since its inception in 1974 was 15 percent.
The investment firm had more than half of its assets in China and Singapore, leaving it particularly exposed to a 21 percent slump in China’s CSI 300 Index and an 18 percent decline in Singapore’s Straits Times Index in the 12 months ended March 31, the report said.
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