Singapore Investment Giant Turns Wary, Citing Global Risks

(Bloomberg) -- Temasek Holdings Pte., the Singaporean state firm that poured $95 billion into everything from startups to asset managers in the past five fiscal years, is turning more cautious as threats to the global economic expansion mount.

The investor expects global growth to moderate and sees rising risks in the market, Temasek said in a statement accompanying its annual review on Tuesday. “We may recalibrate and slow our investment pace over the next nine to 18 months,” Alpin Mehta, managing director of investment, said in the statement.

Temasek is among large investors recalibrating their expectations after a global stock rally came to a shuddering halt and U.S President Donald Trump embarked on a series of trade spats, especially with China. Highlighting increased risks in the “near-term,” the state fund said Tuesday it also expects global growth to cool.

Here are some key numbers from Temasek’s annual review:

• The of the firm’s portfolio climbed 12 percent to S$308 billion ($227 billion) in the year to March 31, the second straight record.
• Temasek made S$29 billion in new investments, up from S$16 billion in the previous year. Divestments totaled S$16 billion.
• Total shareholder return in Singapore dollars was 12.2 percent, down from 13.4 percent in the previous period. Over 10 years, the total shareholder return in Singapore dollars was 5 percent. From inception in 1974: 15 percent.

The investment firm’s early purchase of Alibaba Group Holding Ltd. stock keeps paying off, with that company’s shares jumping 70 percent over the period. It also benefited from gains in Chinese banks. Among the Singapore holdings, which make up more than a quarter of the portfolio, DBS Group Holdings Ltd. surged 42 percent and Singapore Airlines Ltd. climbed 7.7 percent. Singapore Telecommunications Ltd. slumped 14 percent in that period.

Temasek expects to continue with a large position in Chinese banks, executives said at the briefing Tuesday. China will be able to address challenges and re-balance its economy, even though that transition may mean slower growth, they said.

Sovereign wealth fund China Investment Corp. on Monday announced that it generated a 17.6 percent return in U.S. dollar terms on its overseas investments for 2017, the best annual performance in its decade-long history, as global stocks rallied throughout the period. CIC is boosting allocations to direct and alternative investments for more stable returns and to cut exposure to volatile public markets, company executives have said.

©2018 Bloomberg L.P.