| By Alvin Foo | ||
 |  | Mr Tharman said Temasek's portfolio grew $56 billion from March 2003 to November last year even after taking recent sharp declines into account. -- PHOTO: TAN SUAN ANN |
FINANCE Minister Tharman Shanmugaratnam on Thursday defended the overall track record of Singapore state investment vehicle Temasek Holdings.
He disclosed this detail when responding to questions on Temasek's sale of its Bank of America (BoA) stake raised by Ang Mo Kio GRC MP Inderjit Singh and Non-Constituency MP Sylvia Lim. The sale led to estimated losses of between US$2.3 billion (S$3.3 billion) and US$4.6 billion, prompting criticism of the move.
In February, Parliament was told that Temasek's net portfolio value dropped $58 billion - from $185 billion to $127 billion - during March 31 to Nov 30 last year, a fall of 31 per cent.
Mr Tharman said on Thursday that the 'only reasonable way' of evaluating Temasek's performance is 'to look at how the losses and gains add up, and how its overall portfolio performs over time'.
It was not realistic for Temasek to outperform the market every time or to avoid losses amid sharp market corrections, he said. 'Temasek has in fact made large investment gains over the course of the market cycle that began in 2003, including the boom that lasted till 2007 as well as the subsequent bust,' he said.
Its portfolio decline came after a 'much greater gain' of $114 billion over the preceding five years. 'Even after taking into account the recent sharp decline, Temasek's portfolio had still grown by $56 billion over the course of the cycle.'
Temasek's performance as at last November also took into account 'all unrealised losses including mark-to-market losses on the Merrill investment'.
Mr Tharman said a 'large part' of Temasek's $58 billion portfolio decline, about $32 billion, was due to the slump in the market value of the 10 largest listed Temasek-linked firms here. Their share prices retreated 41 per cent between March and November last year, in line with the movement of the market here.
Temasek has performed 'respectably' compared to relevant market indexes and reputable institutional investors, he said. 'Temasek has achieved total shareholder returns by market value of slightly over 15 per cent per year on average (in US dollar terms) over the cycle. This compares with 6 per cent annualised gain in the global equity market indices (MSCI World).'
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