Unveiling Temasek’s Investment Approach: Spotlight on Stocks Listed in Singapore

Temasek’s Investment Principles: A Brief Overview

Temasek, the Singaporean investment behemoth, recently unveiled its performance for FY2023. Despite global market turbulence, Temasek posted a one-year Total Shareholder Return (TSR) of 5.07%. The firm’s three-year TSR stands robust at 8%, while the 20-year and 10-year TSRs clock in at 9% and 6%, respectively. As a long-term investor, Temasek’s investment approach is rooted in prudence and long-term objectives, aiming to serve not just the present generation but also future generations of Singaporeans.

The Draw of Publicly-Listed Companies

While replicating Temasek’s entire portfolio is beyond the reach of individual investors, it’s noteworthy that about 47% of the firm’s investments are in publicly-listed companies. This suggests that retail investors can also contemplate investing in these companies on the stock market. Moreover, 28% of Temasek’s total portfolio is in Singapore, making it intriguing to delve into some Singapore-listed stocks that Temasek has heavily invested in and their performance over the past year.

DBS (SGX: D05)

DBS, the largest bank in Singapore and Southeast Asia, is one of Temasek’s significant holdings. As of March 31, 2023, 6% of Temasek’s total net portfolio value of $382 billion is invested in DBS, representing approximately $23 billion or 29% of DBS. DBS operates in 18 global markets and has demonstrated strong results over the past year, with a record net profit of $2.5 billion in 1Q2023. The stock is currently trading at $31.99, up approximately 7.8% over the past 12 months.

Singtel (SGX: Z74)

Singtel, Singapore’s largest telecommunication company, is another significant holding of Temasek. 6% of Temasek’s total net portfolio value is invested in Singtel, which accounts for about 51% of Singtel. Singtel reported a 14% increase in net profit for FY2023, reaching $2.23 billion. This improvement in performance has allowed Singtel to increase its dividend payouts in 2023, including a special dividend of 5.0 cents. The total dividend for 2023 is 14.9 cents, compared to 9.3 cents in 2022 and 7.5 cents in 2021.

SIA (SGX: C6L)

Singapore Airlines (SIA), which received support from Temasek during the pandemic, has not only returned to profitability but also achieved record profits with a stronger balance sheet and a more fuel-efficient fleet. SIA’s Group revenue and profits are at a record high, with the Revenue Per Available Seat-Kilometer (RSAK) reaching its highest yearly figure at 10.0 cents. Temasek currently owns about 55% of the shareholdings in SIA, and the stock is currently trading at $7.41, up around 42% over the past 12 months.

Olam (SGX: O32)

Olam, a leading food and agri-business company, supplies food, ingredients, feed, and fiber to customers worldwide. Temasek holds about 51% of the shares in Olam, which completed the sale of a substantial minority stake in Olam Agri to Saudi Agricultural and Livestock Investment Company (SALIC) for US$1.24 billion. This transaction unlocks significant value for shareholders and accelerates Olam Agri’s growth. In FY2022, Olam reported a profit after tax and minority interest (PATMI) of $781.5 million.

Wrapping Up and Personal Insights

Temasek’s investment strategy is centered around long-term objectives and prudent decision-making. While individual investors cannot replicate its entire portfolio, they can consider investing in publicly-listed companies that Temasek has heavily invested in. DBS, Singtel, SIA, and Olam are notable examples. These companies have shown strong performance and growth, making them potentially attractive investment opportunities.

My personal insight is that emulating a long-term investor like Temasek can be a smart strategy. By investing in companies that have the backing of a reputable investor like Temasek, investors can potentially reap the benefits of their growth and success.

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Benjamin Low
Benjamin Low

Benjamin is known as The Passive Income Guy. He has helped hundreds of people to build passive income. He is also a member of the Million Dollar Round Table, and Certified Financial Planner™ (CFP®) and Certified Private Banker (CPB).

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