SINGAPORE’S state investor Temasek Holdings said the value of its portfolio jumped by almost a fifth to a record S$266 billion (US$196 billion) in the year to March on the back of a surge in Chinese bank stocks and added it was confident in China’s long-term economic outlook.
The 19 percent gain was Temasek’s largest in five years and reflects its investments in lenders such as China Construction Bank and the Industrial and Commercial Bank of China as well as holdings in leading Singapore firms. The previous year, its portfolio grew just 3.7 percent.
Stocks in China surged last year after the Chinese mainland moved to open up its equity markets with a stock trading link between Hong Kong and Shanghai. But in the last three weeks, they have tumbled some 30 percent, prompting authorities to unleash a slew of support measures.
“We remain confident in the long-term prospect of the Chinese economy and we are very comfortable with the prospect of the Chinese banking system as well,” Wu Yibing, Temasek’s head of China, said at Temasek’s annual review.
Wu said concerns about credit risks in China did not play out as feared last year.
“We actually not only stuck to our position. We increased our position in the Chinese banking system and we believe that has paid off,” he said of investments made last year.
Temasek made new investments of S$30 billion in the year ended in March, the biggest annual amount since the global financial crisis.
Singapore and Chinese firms account for more than half of Temasek’s portfolio, but it is increasing investments in the United States and Europe.