International Business & Economy Temasek's declared losses problematic

Temasek’s declared losses problematic




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By: Chris Kuan

The mainstream media has reported Temasek Holding’s latest result (links: and

Year on year returns -9%, a reduction of S$24 billion from its market value of S$266 billion. 10 year rolling Total Shareholder Returns is at 6%.

The year on year loss was half of what I expected. How come? The clue is given by Temasek saying the decrease reflects share price declines of its listed investments, which was offset by the performance of unlisted assets.

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I find this statement problematic. It is not fully conceivable at least in my view that there is such a divergence between the change in values between listed and unlisted assets.

If there is a general downturn in asset values and especially since Temasek admits to the volatility and difficult investment environment, then these conditions affects both listed and unlisted assets in more or less the same way, notwithstanding special circumstances that may result in some assets holding up or even appreciating compared to others.

Nevertheless to find losses in listed assets being offset in a significant extent given the portfolio size by unlisted assets then the question that pops to mind is how robust are the valuation or the assumptions under the valuation of the unlisted assets since being unlisted there is no transparent, quantifiable market price for them.

Is there a bias to value the unlisted assets higher than they should be to offset the greater loss in listed assets to produce a number that outperforms the market (lose less than implied by the indices)?

The annual report should be released tomorrow so I will update once I read the whole thing.

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