Earlier this week, Temasek announced its FY2023 performance. Though its one-year Total Shareholder Return (TSR) was -5.07%, which should come as no surprise given the challenges in the global markets, Temasek’s three-year TSR remains strong at 8% while 20-year and 10-year TSRs were 9% and 6% respectively.
Given that Temasek’s shareholder is the Ministry of Finance and that the government clearly has no need for cash in the short term, Temasek’s investment philosophy has always been long-term in nature. In fact, it’s more appropriate to consider Temasek as a generational investor since they are not just investing for today’s generation, but for future generations of Singaporeans.
As such, what Temasek invests in needs to be made with prudence and with long-term goals in mind.
While it’s not possible for individual investors to completely replicate Temasek’s portfolio given that unlisted assets comprised 53% of its portfolio, what this also means is that about 47% of the investments that the organisation made are in publicly-listed companies that you and I can also invest in on the stock markets.
Within Temasek’s total portfolio (both listed and unlisted assets), 28% of its assets are in Singapore.
In this week’s edition of 4 Stocks This Week, we take a closer look at some of the Singapore-listed stocks that Temasek has taken a significant position in, and their performance over the past year.
DBS (SGX: D05)
As of 31 March 2023, 6% of Temasek’s total net portfolio value of $382 billion is in DBS (SGX: D05). This works out to be about $23 billion or about 29% of DBS.
The largest bank in Singapore and also Southeast Asia, DBS has operations in 18 markets including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Philippines, Taiwan, Thailand, UEA, UK, USA and Vietnam.
Similar to the other local banks (UOB, OCBC), DBS has seen strong results over the past year with its latest 1Q2023 net profit at a record $2.5 billion. It’s currently trading at $31.99, up about 7.8% over the past 12 months.
Singtel (SGX: Z74)
Similarly, 6% of Temasek’s total net portfolio value of $382 billion is in Singtel (Z74), Singapore’s largest telecommunication company. This equates to about 51% of Singtel.
In its FY2023 financial report, Singtel announced a 14% increase in net profit for FY2023 to $2.23 billion. The improvement in performance has allowed Singtel to increase its dividend payouts in 2023. Inclusive of a special dividend of 5.0 cents, Singtel’s total dividend for 2023 is 14.9 cents, as compared to 9.3 cents in 2022 and 7.5 cents in 2021.
SIA (SGX: C6L)
After a few tumultuous years because of COVID-19, Singapore Airlines (SIA) not only returned to profitability for the first time since the pandemic, but was also able to achieve record profits with a stronger balance sheet and with a renewed, more fuel-efficient fleet.
With Group revenue and profits at a record high, SIA has also seen its Revenue Per Available Seat-Kilometre (RSAK) reach its highest yearly at 10.0 cents. Scoot, the low-cost airline of the SIA Group has also achieved a record operating profit of $148 million for FY2022/2023.
Having supported SIA during the pandemic via rights shares and rights MCBs, Temasek currently owns about 55% of the shareholdings in SIA. SIA share price is currently trading at $7.41, up about 42% over the past 12 months.
Olam (SGX: O32)
Olam (SGX: VC2) is a leading food and agri-business supplying food, ingredients, feed and fibre to over 20,000 customers all over the world.
Currently, Olam is present in more than 60 countries and its operations include farming, processing and distribution operations. Olam has three operating groups, and they are Olam Food Ingredients (OFI), Olam Agri, and the remaining businesses of the group.
Olam Group completed the US$1.24 billion sale of a substantial minority stake in Olam Agri to Saudi Agricultural and Livestock Investment Company (SALIC), and Olam Agri entered into a strategic supply and cooperation agreement with SALIC. The transaction unlocks significant value for shareholders and accelerates Olam Agri’s growth.
For FY2022, Olam reported a profit after tax and minority interest (PATMI) of $781.5 million. Temasek currently owns about 51% of the shares in Olam.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.