International Business & Economy Is 's financial assets decrease similar to decrease during financial crisis?

Is Temasek’s financial assets decrease similar to decrease during financial crisis?

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By: Leong Sze Hian

I refer to Chris Kuan’s article “Temasek may be underperforming” (The independent, Jul 8).

Listed and unlisted assets?

It states that “Yesterday Channel NewsAsia reported as saying that “the decrease reflects share price declines of its listed investments, which was offset by the performance of unlisted assets.” I did not find this in Temasek Review 2016. It could either be a misreporting or it is a statement made by Temasek during the press briefing.

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Unlisted assets comprised 39% of assets. If Temasek made that statement, then clearly there is a significant divergence between the change in values between listed and unlisted assets given the -9% year on year result was much lower than expected (I was expecting -20%).

When yours truly was gainfully employed, an explanation of not just the overall result but any material divergence in the components in that overall result needed to be provided at the weekly portfolio meeting. Be it as it may, if indeed such an event has occurred over the past year between listed and unlisted assets, it is a material event that ought to have clear disclosure from Temasek on which unlisted assets provided the offsets and what is the basis in which the valuation is made since unlisted assets do not have a market price.”

I am listing some snippets from Temasek’s 2016 annual report below.

Net debt increased 393%?

Net debt (Total debt less cash and cash equivalents) increased by 393 per cent from $9.0 billion in 2014 to $44.4 billion in 2016.

Financial assets decreased 12.7%?

Financial assets (listed assets?) decreased by 12.7 per cent from $101.3 billion in 2015 to $88.4 billion in 2016.

Investments in associates, partnerships and joint ventures increased 14.1%?

Investments in associates, partnerships and joint ventures (unlisted assets?) increased by 14.1 per cent from $70.2 billion in 2015 to $80.1 billion in 2016.

Similar to the last financial crisis in 2008/2009?

Similarly, in the last financial crisis – financial assets decreased by 45.6 per cent from $73.9 billion in 2008 to $40.2 billion in 2009, and investments in associates, partnerships and joint ventures increased by 4.1 per cent from $39.5 billion in 2008 to $41.1 billion in 2009.

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