Ins & Outs of Temasek

A visual guide to Temasek’s sources of funds and how their use may benefit you, businesses or the community at large.

Temasek’s sources of funds come mainly from our business as an investor and shareholder.

We do not manage:

  • Singapore CPF savings
  • Singapore Government reserves
  • Singapore foreign reserves
Icon Divestments

We buy, sell or hold shares and assets.

We divested S$88 billion over the last five years, or an average of about S$18 billion a year.

Icon Dividends from Portfolio

We receive dividends from our portfolio companies.

Our annual dividends averaged S$7 billion in the last five years.

Icon Distribution from Funds

A part of our portfolio is invested in funds.

Fund returns are distributed to us mainly in the form of cash.

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Icon Temasek Bonds

Bonds are essentially a way to borrow directly from bond investors for a specified period of time at a specified interest rate. Investors may buy and sell their bonds in the market.

As at 31 March 2017, we had 14 Temasek Bonds outstanding under our US$15 billion Guaranteed Global Medium Term Note (MTN) Programme. They totalled S$11.6 billion with a weighted average maturity of over 12 years.

Icon Temasek Euro-commercial Paper (ECP)

ECP is a way to borrow short term money in any currency, with a fixed maturity typically not more than a year.

As at 31 March 2017, we had S$1.2 billion of ECP outstanding, with a weighted average maturity of about one month.

Icon New Capital from Shareholder

From time to time, our shareholder, the Minister for Finance, may inject fresh capital into Temasek as part of the Singapore Government’s own overall asset allocation of its total reserves.

For example, Temasek’s stakes in our joint ventures with Malaysia’s Khazanah Nasional Berhad were funded by a capital injection from the Singapore Government.

Icon Bank Borrowings

We may also borrow from banks from time to time, especially for short term funding or bridging needs.

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Temasek mixing pot
Funnel
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Divestments

We buy, sell or hold shares and assets.

We divested S$88 billion over the last five years, or an average of about S$18 billion a year.

Icon

Dividends from Portfolio

We receive dividends from our portfolio companies.

Our annual dividends averaged S$7 billion in the last five years.

Icon

Distribution from Funds

A part of our portfolio is invested in funds.

Fund returns are distributed to us mainly in the form of cash.

Funnel
Icon

Temasek Bonds

Bonds are essentially a way to borrow directly from bond investors for a specified period of time at a specified interest rate. Investors may buy and sell their bonds in the market.

As at 31 March 2017, we had 14 Temasek Bonds outstanding under our US$15 billion Guaranteed Global Medium Term Note (MTN) Programme. They totalled S$11.6 billion with a weighted average maturity of over 12 years.

Icon

Temasek Euro-commercial Paper (ECP)

ECP is a way to borrow short term money in any currency, with a fixed maturity typically not more than a year.

As at 31 March 2017, we had S$1.2 billion of ECP outstanding, with a weighted average maturity of about one month.

Icon

New Capital from Shareholder

From time to time, our shareholder, the Minister for Finance, may inject fresh capital into Temasek as part of the Singapore Government’s own overall asset allocation of its total reserves.

For example, Temasek’s stakes in our joint ventures with Malaysia’s Khazanah Nasional Berhad were funded by a capital injection from the Singapore Government.

Icon

Bank Borrowings

We may also borrow from banks from time to time, especially for short term funding or bridging needs.

Temasek mixing pot

Investments and Associated Costs

We invest in companies with outstanding management, good employees and sound governance, along with competitive products and services.

By investing in such companies, Temasek supports them to grow and sometimes expand into new markets, develop new products, provide services that help make lives better or fulfil the needs of customers.

Dividends to Shareholder

We pay dividends to our shareholder as part of our financial discipline. Up till 2015, 50% of these dividends, also known as NII, could be used by the Singapore Government for budget spending, including for long term commitments like the Pioneer Generation Package of 2014.

NII/NIR Contributions to Singapore Government Budget

From 2009 to 2015, apart from Temasek’s NII Contributions, other Singapore entities such as GIC also contributed to the budget through the NIR spending rule based on their respective expected long term real returns.

Together, such NII/NIR Contributions totalled about S$7 billion to S$9 billion annually from 2009 to 2015. They supplemented other sources of operating revenue and enabled the Government to prepare for long term needs, such as the enhanced support for the silver generation.

From 2016 onwards, Temasek has been included in the NIR framework. This has increased the spending capacity of the Government, with NII/NIR Contributions projected to be the largest component of Government revenue at about 17% of the 2017 Government Budget.

Temasek will continue to pay dividends as part of our financial discipline, based on our dividend policy. The NIR framework does not require Temasek to pay more dividends, or sell any assets.

Taxes

Temasek pays taxes on the profits it earns in various countries. Such taxes contribute to government revenues in these countries.

Taxes paid to the Singapore Government help to fund spending for public services ranging from defence and education, to healthcare and social services in Singapore.

Supporting Communities

Whenever Temasek achieves a return above its risk-adjusted cost of capital, we set aside a portion of the excess returns to share with the community.

These are gifted into endowments, each with specific mandates for research and social initiatives, and for community and capacity building programmes, mostly across Asia and in Singapore.

To date, our non-profit initiatives have touched the lives of over 500,000 people, in Singapore and Asia.

Staff-initiated Programmes

Our staff-driven T-Touch volunteer initiative is another avenue for our staff to make a difference in the community, in their own way.

They volunteer ideas, time and money regularly to support their chosen charities, benefiting the elderly, children with special needs, the needy and the disadvantaged.

Causes that they personally support and pursue include the integration of the blind in sports and fundraising for the less fortunate through running.