Temasek has not only taken Singaporeans for a ride but the whole world as well. Its investment returns cannot be verified, and should be taken with a pinch of salt. This is common sense.
Its ‘savvy investor’ image is just an illusion created by state-controlled mainstream media which publishes only highly profitable investments while ignoring those that have incurred massive realised/unrealised losses.
Fact: A handful of non-listed companies have generated huge returns for Temasek. For example, SP Group – 100% owned by Temasek – has earned average annual profits of about $1 bil in the last 19 years. (Image below from a blog post, SP profits from 2005 to 2017)
SP Group average annual net profit almost $1 billion for past 13 years
$1 billion profit, so electricity tariffs raised 22% – geraldgiam.sg
PSA, another 100% owned unlisted company, made annual net profit of about S$1.5 bil in the last 2 years. Over a period of more than 2 decades, PSA is likely to have contributed at least $20 bil to Temasek’s coffers.
240322-PSA-Group-Financial-Results-FY2023.pdf (singaporepsa.com)
Other profitable unlisted companies include Surbana Jurong, Mapletree Investments, etc. These companies have benefited from government transfer of national assets at nominal prices or the use of public resources. Without this, Temasek’s high returns would not have been possible.
Another example: POSB – a former statutory board – was sold to DBS for a paltry sum of S$1.6 bil. PAP’s transfer of state assets at lelong prices DBS would not be where it is today without profits generated by POSB, needed for expansion.
What about CAAS? From State to Temasek – Leong Sze Hian
Besides unlisted assets, listed domestic companies like DBS, Singtel, Keppel Corp, etc have also made tons of profits as well as earned tens of billions in dividends for Temasek.
Temasek is also no ordinary commercial company competing fairly with other companies; legislations could be tweaked to enhance the growth of TLCs. For example, public transportation fare hikes were approved to increase profits of SMRT and SBS Transit.
Shortly before delisting from SGX, coincidentally or otherwise, the government introduced a new rail financing framework and paid S$1 bil for ‘SMRT’s operating assets’ to help it reduce operating costs. SMRT was effectively guaranteed a profit to provide public transportation service. LTA to buy SMRT assets for S$1 billion under new financing framework
Point to note is SMRT already owned prime properties – for rental and advertisement – which are also profit-guaranteed.
Temasek’s biggest profit came from the sale of 3 power generation plants; completion of the sale in December 2008 added S$12 bil to its coffers. How much did Temasek pay the government for them is of course another state secret.
In conclusion, Temasek’s self-declared high investment returns is achieved by the government’s transfer of state assets at nominal prices and tweaking legislations. Temasek could clarify this with proper disclosure of material information, unless it has something to hide.
PS
Since Ho Ching, spouse of PM Lee, joined Temasek in 2002 and became CEO in 2004, Temasek and our MSM have attempted to put her in the league of investment greats like Warren Buffet. This is not only laughable but also insulting to real investment gurus.
For example, Temasek had selectively measured Ho’s performance from near 2003 market bottom in its FY 2013 Temasek Review, suggesting to readers that Ho was instrumental in helping to achieve a 20% 10-year Annualised (SGD) returns on ‘newer investments made after 31 March 2003’. TR13_MediaConferenceSlides
From 2014 till Ho stepped down in 2021, there was no subsequent disclosure of 10-year returns of newer investments made after Ho became CEO. Why?
Temasek’s performance is really nothing to shout about, imho. From publicly-available information, most of its profits/dividends came from …domestic companies.
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