Wow, Temasek’s portfolio has increased by S$43 billion from last year.
Yes, Temasek continues to be an active investor. They invested S$30 billion and divested a record of S$19 billion during the year.
Wow, Temasek looks like a very active investor! How do they fund their investments? Do they use CPF money?
No, my friend. Temasek does not invest our CPF savings. They use dividends from their portfolio, cash distributions from their investment funds, divestment proceeds, as well as bond issues to fund their investments.
What is Temasek’s Total Shareholder Return (TSR)?
TSR measures the returns the shareholder receives. It includes the dividends received by the shareholder, but not capital that the shareholder has put into Temasek.
Why are there different bars for Temasek’s Total Shareholder Return (TSR)?
As a long term investor, Temasek reports the TSR over different periods of time, such as over 10 or 20 years.
I heard that the Singapore Government is including Temasek in the Net Investment Returns (NIR) framework in 2016. What does this mean?
The NIR framework defines the spending rule for determining how much the Government can spend on its budget.
Under the NIR framework, the Government may spend up to 50% of the expected long term returns of the relevant entities.
Will this affect how Temasek operates?
It won’t affect Temasek at all.
The NIR framework will not affect the amount of dividends that Temasek declares to its shareholder and has no impact on its dividend policy, or its approach to investments and divestments.
Temasek’s responsibility under the Singapore Constitution to protect its past reserves also remains unchanged.
If that’s the case, why is Temasek being added to the NIR framework?
Temasek is currently included under the Net Investment Income (NII) framework. This provides a spending rule to allow the Government to spend up to 50% of the dividend income contributed by Temasek, in the annual Government budget.
The spending rule under the NIR framework will enable the Government to spend based on expected long term returns, rather than actual investment income. This helps them smooth out spending over the long term.
They range from vulnerable seniors, youths-at-risk and children, and underprivileged families in Singapore; to healthcare staff, students and teachers, and administrators from around Asia.
How does Temasek contribute to the community?
Whenever Temasek earns a returns above a hurdle, it shares a part with the community. This share may be gifted into endowments to fund community programmes.
Oh, so the NPPOs have a stable source of funding for their programmes. I get it now!
Yes, this is part of Temasek’s long term policy to contribute sustainably and responsibly to the community.
