August 2015 marks Singapore’s 50th year of independence. Temasek has tracked Singapore’s remarkable transformation, growing with Singapore in the early years and more widely with Asia in the recent decades. We continue to seize opportunities, as we create new pathways and push the boundaries for new possibilities.

We have been fortunate that the world is slowly recovering from the Global Financial Crisis of 2008/09. Our portfolio has benefited from the generally favourable global environment for equities last year. However, we remain vigilant, given the policy and regulatory risks around the world.

This was the most active year for us since the Global Financial Crisis.

Portfolio Performance


Net portfolio value

As at 31 March 2015, our net portfolio value was S$266 billion, up S$43 billion from last year. We ended the year in a net cash position.

Our one-year Total Shareholder Return (TSR) was 19.20% in Singapore dollar terms, largely due to the strong performance of our Singapore and China portfolios. Longer term 10-year and 20-year TSRs were 9% and 7% respectively, and TSR since inception in 1974 was 16%.

Wealth Added, which is our dollar return above our aggregated risk-adjusted cost of capital hurdle for the year, was S$25.5 billion.

Portfolio Activities

This was the most active year for us since the Global Financial Crisis, in terms of investment activities, with S$30 billion of new investments and a record S$19 billion of divestments. Our pace of new investments reflects our benign view of the global economy over the next few years. We stepped up our divestments in the latter half of the year to capitalise on the liquidity-driven rally in some markets.

We continued with our four investment themes: Transforming Economies, Growing Middle Income Populations, Deepening Comparative Advantages and Emerging Champions. These include companies that are innovating and embracing the future.


Ten-year TSR


TSR since inception


One-year TSR

The top three sectors for investments during the year were consumer, financial services, and life sciences & agriculture.

The consumer sector is a good proxy to growing middle income populations and transforming economies. During the year, we completed a significant investment in A.S. Watson, and acquired a majority stake in Olam through the completion of a voluntary general offer for the company’s shares.

We continued to expand our financial services portfolio into selected non-banking sub-sectors. These include insurance and consumer finance, which benefit from transforming economies and growing middle income populations, as well as other areas like electronic market making and payments, where technology is disrupting traditional players. Investments last year in NN Group, Synchrony Financial, Virtu Financial and Adyen represented some of our investments in these areas.

Our investments in the life sciences & agriculture sectors were primarily focused around global champions. We expanded our portfolio into veterinary pharmaceuticals with our investment in Ceva Santé Animale, a leading global animal health company. We also increased our stake in Gilead Sciences, a US-based biopharmaceutical company at the cutting edge of developing novel therapies for infectious diseases and cancer.


Investments for the year


Divestments for the year
Temasek will spearhead the rejuvenation of Mandai.

In January, we were especially pleased to announce our partnership with the Singapore Government to spearhead the rejuvenation of Mandai into an integrated wildlife and nature heritage precinct. This builds on the history and success of the Temasek nature portfolio cluster of the Singapore Zoo, Night Safari and the Bird Park. Our project team is having ongoing discussions with various stakeholders and potential partners to garner fresh ideas for this multi-generation endeavour.

As at 31 March 2015, in terms of geographic exposure by underlying assets, Singapore and China were highest at 28% and 27% respectively.

Portfolio exposure to North America and Europe grew moderately to 9% and 8% respectively. 

About 10% of our portfolio is in third party managed funds.

Portfolio exposure to North America and Europe grew moderately to 9% and 8% respectively.

Our Institution

Since 2004, we have established public markers to instil financial discipline for the long term. This year, we have broadened the public marker of our credit quality beyond credit ratings to include key credit parameters in our Credit Profile based on the financials of Temasek as an investment entity.

For the year ended 31 March 2015, our dividend was 16.1 times over interest expense, with a dividend income of S$7.9 billion and interest expense of S$0.5 billion.

We have a robust bottom-up approach for our T-GEM (Temasek Geometric Expected Return Model), which simulates the likelihood of our long term return based on various economic scenarios.

Stakeholder engagement continues to be an institutional priority. During the year, we activated digital platforms such as LinkedIn, Twitter, Instagram, YouTube and Facebook for a broader and more timely engagement with our stakeholders, including the young.

We hosted our inaugural Ecosperity conference in September 2014, featuring dialogue with global business and thought leaders. We believe growth for prosperity can be intertwined with a respect for our environment. Last year’s theme on natural resources will be followed by this year’s focus on urbanisation. Young students had separate sessions to meet with global leaders, and we shared content with a wider audience through our digital channels.


Dividend over interest expense


Dividend income
The move to include Temasek in the NIR framework, if approved by Parliament, does not affect our dividend policy, or our investment strategies and operations.

In his Budget Speech to Parliament in February 2015, Singapore’s Finance Minister proposed that Temasek be included in the Net Investment Returns (NIR) framework for purposes of the Government Budget spending rule. This means the Singapore Government may spend up to half of the expected long term returns of Temasek’s portfolio, rather than up to half of the dividends that our shareholder, the Minister for Finance, receives from Temasek. The move to include Temasek in the NIR framework, if approved by Parliament, does not affect our dividend policy, or our investment strategies and operations. Our constitutional responsibility to protect our past reserves also remains unchanged.

Our Communities

In 2013, in preparation for the Middle East Respiratory Syndrome (MERS) epidemic potentially reaching Asia, we sponsored ST Engineering to develop a new generation of N95 masks, including sizes for children. The successful development resulted in the 2015 launch of the AIR+ Smart Mask, the first certified N95 mask globally with sizes to fit children from age 7 and up, and the AIR+ Micro Ventilators for better comfort and efficacy.

In 2014, we launched a new endowment – the Temasek Emergency Preparedness Fund (T-PREP Fund) – to help communities prepare for and recover from emergencies, such as natural disasters or viral epidemics.

Among the programmes supported in 2014/15 was a Temasek Cares initiative to provide the AIR+ Smart Masks and AIR+ Micro Ventilators to 13,000 disadvantaged children in Singapore. This proved timely given the recent spread of MERS cases to parts of Asia this year.

In 2014, we launched a new endowment – the Temasek Emergency Preparedness Fund (T-PREP Fund) – to help communities prepare for and recover from emergencies, such as natural disasters or viral epidemics.

Another timely programme initiated by Temasek Cares last year was the training of counsellors to support children who have experienced trauma. Following the earthquake at Mount Kinabalu in Sabah, Malaysia, in June 2015, the first batch of trained counsellors, social workers and therapists was activated to support the primary school students, who survived the disaster, and their friends. We are saddened by the devastating loss of lives and extend our deepest condolences to affected families.

Temasek Foundation piloted a regional student leadership exchange for students from polytechnics and technical institutes in the region during the year. Three hundred students from Cambodia, Indonesia, the Philippines, Singapore, Thailand and Vietnam covered cross-cultural learning on regional economic and community issues. With this initial success, the programme is expected to double its intake in 2015.

Economic Outlook

We are cautiously optimistic on the outlook for the next few years. The US economic recovery remains on track, if at times uneven. China is pursuing a more sustainable growth path, and has the means and tools to address credit stresses in its financial system.

This macroeconomic backdrop, combined with easy monetary policy by most central banks, caused a rally in major equity markets, with China a clear outperformer. As a result, valuations, especially in more mature markets, are well above historical averages.

The sharp correction in energy prices during the year surprised most market participants. In the short term, this has increased real income for consumers and reduced costs for businesses. While investments in some energy projects have been scaled back, we do not anticipate a sharp rebound in energy prices in the near term.

In Appreciation

A series of community activities to celebrate Temasek’s 40th anniversary last year culminated in an anniversary dinner at the Istana in September 2014. The occasion was graced by Singapore’s President Tony Tan Keng Yam and Prime Minister Lee Hsien Loong, as well as many of our friends and partners from home and abroad.

At the annual meeting with our Temasek International Panel members last year, there were substantive discussions on some of the most challenging issues facing investors. We are deeply appreciative of their purposeful contributions as our team has benefited much from the robust discussion and insights. 

Inaugurated in 2003, the Temasek Advisory Panel (TAP) allowed us to draw on the wisdom and experience of eminent leaders in Singapore and the region. Our portfolio company leaders and our management have benefited much over the years. As the TAP drew to a conclusion in December 2014, to be replaced by regional TAPs, we would like to record our thanks to all panel members.

I thank my fellow Board members for their active stewardship of Temasek during the past year. We welcomed three new Directors during the course of the year: Bobby Chin and Robert Ng, whom I mentioned last year, joined us in June 2014. Peter Voser, the retired CEO of Royal Dutch Shell, joined our Board in January 2015. Each of our new Directors bring with them a wealth of experience in finance and various sectors of industry.

Tribute to Mr Lee Kuan Yew

In closing, I would like to record a special tribute to Singapore’s founding Prime Minister, Mr Lee Kuan Yew, who passed away on 23 March 2015.

Fifty years ago, Mr Lee led a generation of Singaporeans to embrace an uncertain future, as the world’s newest independent nation. He rallied them: “Ten years from now, this will be a metropolis. Never fear”. 

Employers, workers and the Government forged a groundbreaking tripartite partnership that provided stability and attracted multinational investors. Jobs were created and the economic and social opportunities followed. Singapore companies including Temasek portfolio companies thrived.

"He who survives is the man who is able to adapt to changing situations."
Lee Kuan Yew,
Founding Prime Minister,
Republic of Singapore, 13 July 1966

Right from the start, Mr Lee set the tone for a multi-racial society; meritocratic regardless of race, language, religion or culture. He also noted during the founding years that “He who survives is the man who is able to adapt to changing situations”. And thus, Singapore embarked on entrepreneurship at a national level, continually inventing and reinventing ourselves – adapting, even as we invest and reinvest in our people.

The values of integrity and meritocracy, the openness to a multi-racial world, the pragmatic idealism, the discipline to deliver, the commitment to do the right things for future generations to come – these ideals define Mr Lee and his founding generation. They also shape Temasek and our early portfolio companies to think as owners, and take responsibility as stewards, even as we strive to deliver and grow our businesses.

This valuable legacy from our pioneer generation, led by Mr Lee, has and will enable us to embrace the future with confidence.



July 2015

US$194 billion as at 31 March 2015.
Aggregated risk-adjusted cost of capital for the year was 8%.
Refers to information of Temasek Holdings (Private) Limited (THPL) and its Investment Holding Companies (IHCs). IHCs are THPL’s wholly owned subsidiaries, whose boards of directors or equivalent governing bodies comprise employees or nominees of THPL, wholly owned Temasek Pte. Ltd. (TPL), and/or TPL’s wholly owned subsidiaries. The principal activities of THPL and its IHCs are that of investment holding, financing, or the provision of investment advisory and consultancy services to THPL and its IHCs.
Under the Singapore Minister for Finance (Incorporation) Act (Chapter 183), the Minister for Finance is a body corporate.