Despite last year's global stock market rally, Temasek Holdings, Singapore's sovereign wealth fund, generated a shareholder return of just 1.5 percent for the 12 months ended March 31, hurt by its focus on Singapore and China.
"It's nothing to do the dance of joy over, but it's still squeezing a positive TSR (total shareholder return)" despite "paper losses" on its equity holdings," said Song Seng Wun, head of research at CIMB. "On the plus side, hopefully, is that the new net investment will help future earnings," he said, but added he expects it will take a while for the China rebalancing story to play out.
The sovereign wealth fund's TSR was down from 8.9 percent in the previous year. That compares with the 10-year average return of 9 percent and 16 percent since the fund's inception since 1974. The portfolio size rose 3.7 percent to a record 223 billion Singapore dollars ($179 billion) in the period.
By the end of the financial year, Temasek's largest geographical exposures were Singapore and China, at 31 percent and 25 percent, respectively. Stock markets were down in both countries over the reporting period, although they've since posted modest recoveries.
Singapore's STI index shed around 4 percent over the fiscal year, while Hong Kong's HSCEI, or Hang Seng China Enterprises Index, fell more than 7 percent, compared with the S&P 500's more than 18 percent gain over the same period.