Temasek's portfolio value hits record high; says US risks likely peaked
U.S. President Donald Trump opened a new phase on Monday in his trade war, telling partners from powerhouse suppliers such as Japan and South Korea to minor players including Malaysia that they face higher tariffs from August 1.
"We still have to be watchful of the tariff developments over the next few weeks and months," Lim Ming Pey, Temasek's joint head of corporate strategy, told Reuters in a briefing.
Temasek's chief investment officer Rohit Sipahimalani said tariffs were not expected to return to the levels seen on Trump's "Liberation Day" on April 2, while some earlier risks such as fiscal tightening that would slow U.S. growth had eased with the passage of his sweeping tax-cut and spending bill.
"Generally speaking, the slowdown in growth that we're seeing right now because of tariff uncertainty, we should see a recovery in growth towards the end of the year, particularly as the Fed cuts rates and more deregulation happens, and there's more clarity around tariffs," Sipahimalani said. "The challenge in the U.S. is valuations."
Nevertheless, Lim said Temasek saw "bright spots, such as the U.S.'s world-class capabilities in AI, which will have a transformative impact across all sectors."
The U.S. continues to be the largest destination for Temasek's capital, the company said. The Americas made up 24% of its portfolio at the end of its financial year on March 31, versus 22% on the same date a year ago.
The rise in Temasek's net portfolio value was the second consecutive annual increase, and largely driven by the strong performance of its listed Singapore-based companies and direct investments in China, India and the United States.
Temasek continues to believe in the longer-term prospects of China, Lim said. China is Temasek's third largest market in terms of underlying exposure at 18% as at end-March, after Singapore at 27% and the Americas at 24%.
"We see opportunities in the green economy and life sciences innovation, and also in leading domestic brands which continue to scale and grow in a resilient manner," she added.
Moving forward, Temasek said it was increasing focus on investing in companies with stable cash flows and earnings, as well as access to large domestic markets that are better shielded from tariffs and geopolitical risks. It is also focusing on infrastructure and artificial intelligence.
"We do not only make investments ourselves, we also invest in AI-related funds," Chia Song Hwee, Temasek's deputy CEO, said. Temasek's investments in the AI sector include companies such as Nvidia (NVDA.O), opens new tab, Databricks and Veeam.
It recently joined a consortium backed by Microsoft (MSFT.O), opens new tab, BlackRock (BLK.N), opens new tab and tech investment company MGX to invest and expand AI infrastructure, according to BlackRock's investor day presentation slides in June.
($1 = 1.2766 Singapore dollars)
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