Temasek’s gaze fixed on China

China is the largest investment destination for Temasek Holdings, with Bank of China and China Construction Bank two of its most significant holdings. Finding investment opportunities in Asia is also the key focus for the Singaporean investment company.

During the financial year Ding Wei was appointed head of China to anchor Temasek’s long-term presence in the country, and the fund’s most recent annual report, to the end of March, states that “China remained our largest investment destination”.

“We invested over S$3 billion in China Construction Bank and Bank of China during their respective rights issues. Other investments in China included S$90 million in Asian Citrus, one of the largest orange growers and tropical fruit juice suppliers, and an investment in New China Life, a Beijing-based insurer. Post-March 2011, we invested in Shanghai Pharmaceuticals, one of the largest integrated pharmaceutical companies in China,” it states.

Of the $S193 billion ($157 billion) in total holdings, Asia ex-Singapore makes up 45 per cent of its mostly equity portfolio, with Singapore a further 32 per cent, followed by Australia, New Zealand, North America and Europe at 20 per cent and Latin America, Africa, Central Asia and the Middle East at 3 per cent.

In the next decade, the investment company remains focused on opportunities in Asia and growth markets that are driven by education, healthcare, urbanisation and other needs of growing middle income populations.

It believes demand for commodities will remain strong, while developments in technology also offer new opportunities.

Chairman of Temasek, S Dhanabalan, said: “Longer term, we remain bullish on Asia, despite medium term inflationary and other pressures in various parts of the world. Mid-sized cities in growing markets are projected to deliver almost 40% of global growth by 2025. We continue to see the rising middle income populations driving rapid urbanisation and housing demands. Innovation will spur demand for new services.

“In Latin America, economic growth is bolstered by the demand for commodities and other natural resources.”

He said that in the coming decade, the fund expects to benefit from its four investment themes:

• Transforming economies
• Growing middle income populations
• Deepening comparative advantages
• Emerging champions

“These are our guideposts as we focus on our core purpose as a responsible investor to deliver sustainable long-term value for our stakeholders,” Dhanabalan said.