Wednesday, April 25, 2018

A look at the performance of Temasek Holdings

Mr Tan
Another big concern I have for Singapore is Temasek seems to be losing alot of money... it will drastically affect our reserves... I am suspecting this is the reason for the tax hikes.

I have not seen evidence that this is the case. Maybe you can read Temasek Holding's annual report and share your findings.

Here is the link to the portfolio performance of Temasek Holdings:

Total Shareholder Return
Total Shareholder Return (TSR) is a compounded and annualised measure, which includes dividends paid to our shareholder and excludes capital injections from our shareholder. Our TSR over short, medium, and long time periods are a snapshot of our performance.

As at 31 March 2017, our Singapore dollar one-year TSR was 13.37%. Our three-year TSR was 7.13% and our 10-year TSR was 4%.

Our 20-year TSR was 6%, versus the Singapore 20-year annualised core inflation of under 2%. Longer term 40-year TSR was 15%.

Our TSR is measured against our risk-adjusted cost of capital, which is derived using a capital asset pricing model. The risk-adjusted cost of capital is built bottom-up, and aggregated over all our investments.

Someone said that the performance of the portfolio is exaggerated by the injection of assets at book value. After these assets are revalued, they showed a large gain, leading to a higher TSR.

I do not know if this is the case. But we have to view the above figures with some sceptism.

Anyway, the 20 year TSR of 6% should be compared with the performance of 9% for the Straits Times Index. In that respect, the performance of TH seems to be lower.

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