Singapore’s Temasek stock bets shrink by US$5.6 billion, the most in 17 years, amid Fed hikes and recession fears

The firm’s bets on US-listed stocks shrank last quarter by the most since the final quarter of 2004, SEC filings show
US rate hikes stoked recession fears, slamming its bets including BlackRock and Amazon, while holdings in Chinese stocks were largely unchanged

US-listed Chinese stocks

Cheryl Heng

Published: 2:48pm, 16 Aug 2022

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Temasek Holdings’ stock bets shrank by the most in more than 17 years after taking some cash off the table and incurring steep paper losses on BlackRock, Amazon, PayPal and Airbnb. It retained most of its stakes in Alibaba Group Holding and other Chinese stocks.

The Singapore state investment firm held 97 stocks valued at US$18.33 billion on June 30, according to its 13F regulatory filing with the Securities and Exchange Commission late on Monday. It listed 96 stocks worth US$23.97 billion on March 31.

The US$5.6 billion drop is the biggest in the firm’s 13F quarterly filings going back to the final three months of 2004, according to SEC data. The total value of its equity investments in US-listed securities is the lowest since 2020 when it was US$16.7 billion. The investments formed part of its S$403 billion (US$297 billion) of assets.

Temasek declined to comment on its latest filing.

A Wall Street trader works on the floor of the New York Stock Exchange on August 5. Photo: AFP

Global stocks slumped last quarter as the risk of recession escalated, fanned by the most aggressive policy tightening in the US since 1994. While the 25-basis point rate lift-off in March was gentle, the Federal Reserve was forced to boost its target fed funds rate by another 200 basis points in three subsequent policy meetings.

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The S&P 500 lost 16 per cent in the quarter to June 30, erasing US$6.6 billion of market value while the MSCI World Index also tumbled 16 per cent in a US$10.9 billion rout.

BlackRock slumped 20 per cent while PayPal plunged 40 per cent, with Temasek keeping both stakes unchanged during the quarter. Amazon tumbled 35 per cent, with its stake marginally trimmed after a 20-for-1 stock split. Airbnb tumbled by 48 per cent.

“Taking into account the reasonable likelihood of a recession in developed markets over the next year, we maintain a cautious investment stance,” chief investment officer Rohit Sipahimalani said during Temasek’s media briefing in July. He expected a more balanced risk-reward profile on Chinese assets.

Temasek retained most of its bets on US-listed Chinese stocks last quarter, including a stake worth US$1 billion in Alibaba, an US$89 million stake in Didi Global, an US$11 million stake in JD.com, and a US$480 million stake in drug maker BeiGene.

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Their combined value stabilised as the MSCI China Index of 715 stocks traded onshore and abroad gained 2.5 per cent and the Nasdaq Golden Dragon China Index jumped 12.6 per cent. Both gauges had slumped in the three preceding quarters, wiping out US$2.6 trillion and US$757 billion of market value respectively along the way.

Temasek also kept its holding of 10 million shares in Grab Holdings and added to its position in the Singapore-based technology investment group Sea Limited. Their combined value, however, declined by about US$131 million amid the broader market rout.