From Our Chairman

The global economy has stabilised somewhat, after a challenging 2015 and a difficult start to 2016.

Economic data from most major markets have improved since the second half of 2016, while medium term inflation expectations have edged up. The global economy held steady through dramatic political transitions, and through the US Federal Reserve’s current tightening cycle. This adds cautious confidence to the economic recovery.

Portfolio Performance

As at 31 March 2017, our net portfolio value rose to a record S$275 billion, up S$33 billion from last year, on the back of the global economic recovery and strong performance in equity markets.

One-year Total Shareholder Return (TSR) was 13.37% in Singapore dollar terms. Longer term 10-year and 20-year TSRs were 4% and 6% respectively. TSR since inception in 1974 was 15%.

Our Wealth Added for the year was S$14.6 billion.

Dividend income from our portfolio was S$7 billion for the year ended 31 March 2017. This is about 19 times our interest expense for the year.

We ended the year in a net cash position. In liquidity terms, our cash and bank balances, together with our short term investments, were five times our S$7.7 billion debt that is due over the next decade.

Agility, Alignment, Accountability

We divested S$18 billion and invested S$16 billion during the year. The net divestment of S$2 billion reflected our measured and disciplined pace of investment and divestment, driven by our cautious global outlook, and tempered by geopolitical risks across the world and rich equity market valuations in key markets.

We continue to shape our portfolio as an active investor, increasing, maintaining or decreasing our holdings based on our views on intrinsic values, as and when opportunities or challenges arise. While the global recovery is gaining momentum, there are still uncertainties. Agility, Alignment and Accountability are our watchwords as an owner and investor, against this backdrop of global risks.

To ensure our investment stance remains nimble to capitalise on opportunities and withstand shocks, we continued to rebalance our holdings towards longer term as well as emerging new trends. Examples include the digital economy, the needs and demands of growing middle income populations, and the healthcare requirements of ageing societies.

We challenge ourselves to stay relevant in a fast changing world. Our senior bench and wider team remain focused on this objective, so as to deliver sustainable value over the long term. Our culture of ownership and accountability, which places the institution above the individual, has served us well over the years.

We have a constructive outlook on the global economy, but are conscious of political risks and stretched public market valuations, especially over the medium term.

Going forward, we expect the more synchronised global growth to continue, as seen over the past year, driven by key markets in both mature and growth economies. Against this backdrop, we remain hopeful that China, over the medium term, can transition to a more sustainable growth path, though credit risks need to be managed.

In the US, growth remains steady, and the Federal Reserve will likely continue its tightening policy. However, the unwinding of its balance sheet poses some risks to the financial markets.

Over in Europe, economic recovery remains firm. With deflation risks receding and employment data improving, the European Central Bank is expected to normalise monetary policy in a measured manner. We continue to closely monitor European political risks and their effects on the Eurozone.

In Singapore, our economy stands to benefit from the cyclical pickup in global growth, and the Government’s ongoing restructuring efforts as it reshapes its future economy.

There are clear risks to this relatively sanguine outlook around the world, such as a potential credit crunch in China, rising geopolitical uncertainties, and increasing global trade protectionism arising from populist politics.


Net divestment for the year



Wealth Added for the year


Net portfolio value as at 31 March 2017

People, Purpose, Passion

Our people are the bedrock of our institution and our values. In our pursuit of excellence, we are anchored by our Temasek values, integrity foremost among them. As an institution, we develop our people and harness their passion, to do things today with tomorrow in mind and make a difference in all that we do. We remain firmly committed to these principles.

We expanded our coverage in North America by opening our San Francisco office. This provides us a gateway to deepen our relationships in the Bay Area, and develop investment opportunities in emerging sectors of technology, healthcare, life sciences and agribusiness, as well as early stage companies.

The Temasek Americas Advisory Panel met for the second time in February 2017, while the Temasek European Advisory Panel held its fifth meeting in London in May 2017. The panellists’ views complement those we receive from our Temasek International Panel members. We thank them all for their invaluable time and perspectives; we benefit immeasurably from their wisdom and experience. I would like to also express our appreciation to David Bonderman, Dr Han Seung-soo, Minoru Makihara, Lucio Noto, Lee Raymond, Sir Richard Sykes, Ratan Tata and Yorihiko Kojima, for their advice over the years. During the year, these distinguished global leaders retired from our Temasek International Panel.

An ABC World

As an intergenerational steward, we believe that collective action is required to achieve the United Nations Sustainable Development Goals (SDGs) by 2030.

As a generational investor, we know that delivering sustainable returns over the long term is predicated on there being a thriving economy, just society and healthy environment.

As an institution, we advocate for an Active, Beautiful and Clean World – the ABC World of an Active and robust Economy, a Beautiful and inclusive Society, and a Clean and cool Earth – in unequivocal support of the SDGs.

Our fourth Ecosperity conference in June 2017, themed “Tomorrow Starts Today!”, was well attended by about 400 stakeholders. We believe there is more we can do to tackle the longer term challenges faced by societies. These include ageing populations, climate change, resource scarcity, income inequality and poverty.

In September 2016, we reorganised our endowments and philanthropic organisations under six Temasek Foundations. Their management staff are pooled into the Temasek Foundation Management Services unit. This streamlining brings focus for more effective future contributions and reinforces our commitment to the community.

My predecessor, S Dhanabalan, continues to chair Temasek Trust, which has financial oversight of our endowment gifts. Joining him in Temasek’s philanthropic efforts are his fellow Trustees, Euleen Goh and Ng Kee Choe, as well as the eminent chairmen of the six Foundations: Goh Geok Khim, Richard Magnus, Benny Lim, Liew Mun Leong, Professor Leo Tan and Teo Ming Kian. I would like to thank them all, and the Foundations’ boards and staff, for helping us build people, build communities, build capabilities and rebuild lives.


Dividend income for the year


Dividend income over interest expense

Agility, Alignment and Accountability are our watchwords as an owner and investor.

We advocate for an Active, Beautiful and Clean World – the ABC World.

In Appreciation

I would like to thank my former Board colleague Lucien Wong, who stepped down last December and has since taken up the appointment of Attorney-General of Singapore. Lucien had served on the Board since 2013, and I’ve always found him to be astute, perceptive, and far-sighted. On behalf of the Temasek Board, I would like to express appreciation for Lucien’s invaluable contributions and wish him every success in his new appointment.

In addition, it is my great pleasure to welcome Stephen Lee, who joined the Board this month. He brings to our institution a wealth of experience in business, community and the tripartite movement, representing the partnership between the Government, employers and unions.

I thank my Board colleagues for their continued guidance, and the Temasek management and staff for their steadfast dedication to the company. Finally, I would like to express our heartfelt thanks to our shareholder, bondholders, portfolio companies, co-investors, regulators, philanthropic organisations, and the general public, for their support and encouragement all these years.

I am happy that Temasek continues on its generational investing journey, as an Investor, Institution and Steward, working hand in hand with our many stakeholders to make a difference in all that we do.

Lim Boon Heng Signature



July 2017