Temasek Review 2017 – Here’s How It Impacts You

Temasek Review 2017 – Here’s How It Impacts You

As Singaporeans, we’re often encouraged to plan for our future. I’ve been planning for my wedding since I was 8 years old. I know who I’m inviting, where the celebration will take place, what song will be playing as I enter the ballroom, which island paradise we’ll jet off too after the banquet. Now I just need to find a way to earn the remaining $60,000 over the next… uh… 10 months. Uh… anyone wants to buy a spare kidney?

But if I can be serious for a minute, the fact is that many of us Singaporeans have big plans but often don’t have the financial ability to achieve that future. In the case of Temasek, Singapore’s state investment company, they definitely have the financial ability. In the recent Temasek Review 2017, it was revealed that the net portfolio value rose to $275 billion. This is not only a new record, but a huge relief after they experienced a significant $24 billion drop last year.

 

So how did Temasek rebound so quickly?

By doing what they’ve always done, which is long-term investing. Temasek’s focus has never been solely on short-term profits. When they choose which companies to invest, Temasek also looks to the future. This means they have a hand in developing new technologies which will both improve and sustain livelihoods, both in Singapore and overseas. Here’s what Temasek’s investments mean for us:

 

1. Temasek funds life-changing research

The Temasek Life Sciences Laboratory, or TLL, was founded in 2002. Its broad goal is to do research into cellular mechanisms and thus get new understanding of how living things function. One of TLL’s recent projects has been helping fish farmer Kang Boon Yong recover from an algae bloom in 2014 that killed 20,000 fish.

One of TLL’s research groups used selective breeding to rear a faster-growing and more resilient sea bass. However, they were unable to do further research without releasing these sea bass into open farms.

By donating these fish to farms like Mr Kang’s, TLL achieved a win-win solution. Not only did they get the opportunity to continue their research, but Mr Kang also gets to sell these fish at a faster rate. Where he would normally have to wait for a year for his fish to mature, TLL’s sea bass mature in as little as seven months! This of course leads to Mr Kang almost doubling his profits.

Other examples of TLL research includes developing a rice variety – called Temasek Rice. This rice is high in dietary fibre, has increased resistance to diseases, and a greater tolerance to floods and droughts, making it ideal for growing in regions still affected by the 2004 Tsunami.

Rice and fish are just two staples of our diet here in Singapore, and ensuring that there’s a consistent supply of these food items will go a long way. But what if a food source isn’t future-proof? That brings us to the next point:

 

2. Temasek funds sustainable technologies

It won’t mean anything for Temasek to invest in the future, if there’s no future to speak of. It’s not enough to just earn profits, we have to ask ourselves if these profits are sustainable.

Cattle farming, for example, has long been believed to be one of the main producers of methane, a greenhouse gas. Greenhouse gases contribute to climate change, and therefore livestock farming will need to be reduced. One way to cut down on cattle farming is to provide a worthy alternative.

To that end, Temasek has recently invested in Modern Meadow and Impossible Foods, two US companies that are trying to replace leather and beef respectively. The challenge is to replicate the feel of leather and the taste of beef, without ever needing to slaughter a cow.

The technology to do this is almost perfected, but the challenge is now to make their product affordable enough to make it competitive with the real thing.

By investing in these companies, Temasek is helping us move into the future, where we can use leather products and eat hamburgers without worrying about the impact on the environment.

But Temasek isn’t just looking overseas for ways to create and utilise sustainable technology. With major investments in several local companies, they can also push for change right here at home:

 

3. Temasek pushes local companies to go green

It really makes a difference when you’ve got a large stake in a company, and Temasek is using their leadership to push for change.

Singapore Airlines, which Temasek has a 56% stake in, uses biofuels and fuel-efficient aircraft to reduce greenhouse gas emissions. These technologies were used on the world’s first “green package” flights this year between Singapore and San Francisco.

Sembcorp, which Temasek has a 49% stake in, recently acquired a renewable energy firm in India as part of their commitment to providing sustainable green energy solutions.

ST Engineering, which Temasek has a 51% stake in, was commissioned by Temasek to develop an outdoor cooling system that is eco-friendly. The result is the Airbitat Smart Cooler, that is able to maintain temperatures at 24oC with 80% less energy compared to an average air conditioner.

These initiatives help reinforce Singapore’s commitment to combating climate change, and ensuring that we do our part to make sure our children grow up in a country focused on sustainability.

Temasek reminds us as Singaporean investors that it pays (literally in the case of Mr Kang) to embrace the future, and that investing in technology is both a commercial goal as well as one that seeks to improve the lives of Singaporeans both present and future.

 

What do you think of this aspect of Temasek’s long-term investment strategy? Share your thoughts with us.