Temasek Holdings reported a notable increase in its exposure to China, raising its investments by 10 billion Singapore dollars ($7.7 billion) in the last fiscal year, the highest annual increase in five years. This shift is part of a broader strategy to align its portfolio with emerging growth areas, particularly in artificial intelligence and advanced technology.
CEO Dilhan Pillay highlighted a rebound in the Chinese market, contributing to this increase, although the firm's overall exposure to China has decreased from 24% in 2016 to 17% currently. Despite this decline, China remains Temasek's third-largest market after Singapore and the Americas.
The firm is moving away from traditional sectors like consumer goods and real estate, focusing instead on 'hard tech' sectors such as AI hardware, robotics, and biotech. Chia Song Hwee, CEO of Temasek Global Investments, noted that China is transitioning from a high-growth to a maturing economy, necessitating a more selective investment approach.
Temasek sees potential in domestic consumption, particularly in experiential spending and innovative local brands, although it acknowledges that recovery in this area is uneven. Recent investments include stakes in Luckin Coffee, which has rebounded after overcoming a significant fraud scandal, and logistics group ANE.
Temasek's net portfolio value reached a record SG$518 billion ($401 billion), reflecting a SG$49 billion increase over the year, marking its third consecutive annual growth