Temasek is aware of calls to revive the Singapore Exchange S68 (SGX), but Temasek International’s head of financial services Connie Chan says their mandate is to generate long-term, sustainable returns, and not to stimulate trading on the local bourse.
“The question around SGX — I think there’s a lot of news around that recently,” says Chan on July 9 in response to questions from The Edge Singapore. “What we want to emphasise is: Our mandate is to generate long-term sustainable returns; that’s the key primary focus for us.”
Speaking at the release of Temasek’s results for FY2024 ended March 31, Chan says where a portfolio company decides to list is a “multi-factor decision”. “There are going to be pros and cons, depending on which venue, but ultimately, it’s up to the companies themselves to decide.”
Chan adds: “We also have 65 Equity Partners, [which] looks to invest in companies that want to list on the SGX. Therefore, that's not our primary concern. Our focus is really on delivering long-term, sustainable returns; and then ultimately, where a company decides to list will be up to the company itself.”
As at March 31, over half (53%) of Temasek’s portfolio companies are based in Singapore, with “many of those listed on the SGX”, says Chan. These names, like DBS Group Holdings, PSA, Sembcorp Industries U96 , Singapore Airlines C6L , Singtel and ST Engineering, make up some 40% of Temasek’s total portfolio value of $389 billion as at March 31.
Temasek’s job is to engage portfolio companies “so that they can produce better performance” and “build businesses that are sustainable into the future”, says Temasek International’s deputy chief executive officer Chia Song Hwee.
See also: Temasek’s net portfolio value up 1.83% y-o-y to $389 bil on its 50th anniversary
“We do not actually differentiate whether or not it is a Singapore-based or non-Singapore-based company; the engagement to create value, to enhance shareholders value, is consistently applied,” he adds.
According to a May 6 Financial Times report, SGX is reviewing proposals from the Singapore Venture & Private Capital Association, which includes GIC, Temasek, General Atlantic, Warburg Pincus and KKR. Citing anonymous sources, FT says the Singapore Economic Development Board, MAS and the Ministry of Trade and Industry are also considering the proposals.
See also: How to jump-start the Singapore stock market
From left: Alpin Mehta, head, real estate; Png Chin Yee, CFO; Chia Song Hwee, deputy CEO; and Connie Chan, head of financial services at Temasek International.
Public listings
Chan says Temasek has achieved liquidity through the public listing of its unlisted assets. Portfolio companies that went public over the past five years include food delivery operators DoorDash and Zomato, solution provider Intapp and biotech company Gracell Biotechnologies.
US-based DoorDash was initially listed on the New York Stock Exchange, before moving to Nasdaq in 2023. Zomato is listed on the National Stock Exchange of India, while China’s Gracell and the US’s Intapp were both listed on the Nasdaq.
Although Temasek did not disclose specific returns from exits taken by its unlisted assets, Chan notes that the firm’s consideration goes beyond making immediate profits, also taking into account the potential appreciation of its portfolio companies after they become public.
One example is Netherlands-based payments company Adyen. Temasek participated in Adyen’s US$250 million funding round in 2014. In 2018, the company debuted on the Euronext Amsterdam at the offer price of EUR240 apiece. Its share price peaked at EUR2,766 on Aug 24, 2021, and last traded at EUR1,104.20 ($1,613.88) on July 8 — up 162.9% since going public.
“The amount of appreciation from the time Adyen went public to now is actually quite substantial,” says Chan. “So, when we look at our investments, it is not just about divesting once it becomes public. It’s also about [whether] we still see value in the company at the time and if there is a lot of appreciation that can still happen after [the IPO].”
Photo: Temasek
