From Our Chairman

Today, we stand at a crucial inflection point in history. The world is experiencing a seismic change in the global order, one where rules-based globalisation and free trade are being challenged by rising nationalism, protectionism, and fragmentation.

The deep divisions I wrote about last year have intensified, raising the spectre of a trade war. A multipolar world is emerging, fracturing long-standing alliances and multilateralism. Against this backdrop, uncertainty is exacerbated by the AI-driven revolution that will transform and disrupt many industries, while the climate crisis continues to be an existential threat to humanity.

As we remain clear-eyed about the risks ahead, we must also be comfortable with ambiguity. Our new reality requires a pragmatic approach as we make sense of shifts, adapt nimbly to challenges, and seek to thrive amidst uncertainty.

Portfolio Performance

As at 31 March 2025, our net portfolio value was S$434 billion¹, up S$45 billion from the previous year, largely due to the strong performance of our listed Singapore-based Temasek Portfolio Companies and direct investments in China, the US, and India.

During the financial year ended 31 March 2025, we invested S$52 billion and divested S$42 billion, resulting in a net investment of S$10 billion. The activity for the year was higher compared to last year as we actively rebalanced our portfolio, in light of the changing macroeconomic environment. In the previous financial year, we had a net divestment of S$7 billion. Over the past decade, we have invested S$350 billion.

Our 10-year and 20-year Total Shareholder Returns (TSR) were 5% and 7% respectively. One-year TSR was 11.8%. TSR since inception in 1974 was 14%. On a mark to market basis, our net portfolio value as at 31 March 2025 would have been S$469 billion, reflecting a value uplift of S$35 billion from our unlisted portfolio.

Our portfolio resilience, built on a strong balance sheet and core holdings, remains our key strength. We will continue to adapt and retool to seize opportunities in the evolving investment landscape, while staying anchored to long-term trends with the aim of delivering sustainable returns over the long term.

Making Sense of a Troubled World

In 2025, geopolitical tensions remain a key risk, with inter-country relations becoming more complex. The international rules-based order is being reoriented, giving rise to elevated global trade uncertainty. Policymakers have to navigate and adapt to this difficult environment. Global growth is likely to see some deterioration as seen in the downward adjustment in the growth forecast by the International Monetary Fund. We remain watchful of developments and how they affect global asset prices.

In the US, tariffs on trading partners and critical sector inputs could increase living and production costs. The Federal budget outlook and tighter immigration policies could also impact consumer and business sentiment, as well as the labour market. Meanwhile, global investors are mindful of potential volatility in currency markets and capital flows, which have knock-on effects on investors’ expectations for financial returns. While we expect monetary policy to provide some support, inflation risks in particular suggest that the Fed’s stance will likely be more reactive this time, with the magnitude of easing potentially more limited compared to the past in the event of a slowdown.

Europe has responded to the increased geopolitical tensions with ReArm Europe and Germany’s new fiscal package, although the latter could be delayed due to its leadership transition. Corporate investment plans may also be dampened as trade negotiations between the European Union and the US continue with no clear outcome. Domestically, tighter credit conditions pose growth headwinds, although the European Central Bank will be able to continue to keep rates low given easing inflationary pressures.

China is striving to achieve a steady growth target of 5%. This goal remains challenging amidst persistent global tensions and trade uncertainties. While home prices in larger cities have begun to stabilise, the real estate sector’s contribution to growth may be more limited in the future. Global investors are closely watching the effective implementation of the government’s stepped-up fiscal support, including more comprehensive consumption measures, recognising that the supply-demand imbalance has kept inflation subdued. The AI breakthrough at the start of the year demonstrated China’s growing technological advancement while providing a new dynamic to the investment landscape.

In contrast to the more supportive external backdrop last year, Singapore’s open economy is expected to be under some pressure this year. This is primarily due to global policy uncertainty; in particular, the US tariffs have the potential to negatively impact global demand and reduce trade flows. Nonetheless, Singapore has ample policy space, in terms of fiscal and monetary levers that can be pulled in the event of a more challenging growth backdrop. 

Building a Sustainable World

Even as sustainability commitments are being reconsidered globally, the adverse impact of climate change, nature degradation, and societal challenges continue unabated. We remain steadfast in our commitment to building a sustainable institution and delivering sustainable returns over the long term.

Beyond our Sustainable Living trend-aligned investments, we have set aside S$100 million from our community gifts as Concessional Capital for Climate Action (CCCA), in conjunction with Temasek’s 50^th anniversary. CCCA reflects our abiding commitment towards the climate agenda, by providing more flexible, patient, and favourable financing for climate action initiatives, including support for marginally bankable opportunities.

In Tribute

We are deeply saddened by the passing of Fock Siew Wah on 6 January 2025 and Lee Ek Tieng on 6 April 2025.

Siew Wah was our Board Director for 14 years from 1991 to 2005 and had been chairman and board director for many of our portfolio companies including DBS, Mandai Park Holdings, PSA International, Singapore Airlines, and SMRT. Beyond his tenure as Board Director, he continued to be a mentor and advisor to us over the years, as Temasek transformed from a Singapore holding company to a global investment company. We will always be grateful for his wise counsel and guidance.

Ek Tieng served with distinction as Temasek Holdings Chairman from 1987 to 1996. Under his stewardship, Temasek’s portfolio grew substantially in size and significance, with many portfolio companies growing from strength to strength. As a former top civil servant, he made significant contributions to Singapore and our ecosystem, leading crucial infrastructure projects, including the establishment of an islandwide sewerage system and the enhancement of the nation’s waterways. We are truly grateful for his faithful and selfless contributions to Singapore and Temasek.

In Appreciation

As this will be my final message as Chairman, allow me to indulge in a reflection that is longer than usual.

Temasek has come a long way in becoming the global investment company it is today, and this was achieved with the support of many people.

During my 13 years at Temasek, we grew our footprint across Europe and the US, which now host 6 of our 13 international offices. Our overseas expansion was fortified by the insights and advice provided by past and present international and regional advisors. We expanded our global advisory network, supplementing the Temasek International Panel (TIP) with three regional panels — the Temasek European Advisory Panel and the Temasek Americas Advisory Panel in 2016, and the Temasek Southeast Asia Advisory Panel in 2023. I would like to thank Timothy Geithner, Hon John Howard, and Dr Pedro Malan, all of whom retired from our TIP this year. Their diverse perspectives and extensive experiences have greatly benefitted us, and we wish them all the best in their future endeavours. I welcome Tatsuo Yasunaga, Representative Director and Chair of the Board of Directors at Mitsui & Co., to the TIP. His esteemed career and global expertise will be instrumental in an increasingly complex international landscape.

I worked with many outstanding colleagues on the Board over the years and would like to extend my deep gratitude for their service to Temasek. I firmly believe that Temasek’s success hinges on having capable people with the right values, and that is why the Board renewal process and planning for my succession has been a priority for me. In 2023, I informed the Board that I would like to step down during my current term. I am happy to be able to fulfil this objective. Teo Chee Hean joined the Board as Deputy Chairman on 1 July 2025 and will succeed me as Chairman on 9 October 2025. I am confident that Chee Hean will lead Temasek to greater heights. His remarkable depth of experience in public service, including in critical areas like geopolitics, cybersecurity and technology, climate action, as well as defence and security, makes him the right helmsman for Temasek as we navigate increasingly choppy waters.

I am also pleased to welcome Ong Pang Thye and Jim Hagemann Snabe who joined our Board on 1 January 2025. Pang Thye’s former roles include Managing Partner of KPMG in Singapore and Board member of KPMG International Limited. Jim is Chairman of the Supervisory Board of Siemens AG and was previously Chairman of A.P. Moller Maersk, Vice Chairman of Allianz SE, and Co-Chief Executive Officer of SAP AG. Pang Thye’s deep domain expertise in navigating risk and governance matters and Jim’s leadership in innovation and digitisation complement the Board and enrich our deliberations. I would like to thank the following Board Directors — Fu Chengyu who stepped down on 15 November 2024, Cheng Wai Keung and Stephen Lee, who both retired from our Board on 30 June 2025, and Bobby Chin who will retire from our Board on 31 July 2025. We look forward to their continued counsel in their capacity as board members of Temasek Capital (China) Holdings, a wholly-owned subsidiary of Temasek.

My thanks go to the past and present Temasek management and all our staff who have worked tirelessly to build a resilient and forward-looking institution, as guided by our Purpose — So Every Generation Prospers. The team has adapted to changes and risen above challenges and are dedicated stewards of Temasek’s future.

As an organisation, we must be clear about our purpose and values. Temasek will thrive when each generation of the Board and management abides by our Purpose and stays guided by our values.

I would like to record my gratitude to a wider group of stakeholders as well, starting with our shareholder, the Minister for Finance², whose trust and confidence in our Board and management have empowered Temasek to operate independently on a commercial basis as we seek to deliver sustainable returns over the long term.

I would also like to thank past and present leaders and staff of our portfolio companies. I watched them grow to become global industry leaders and stalwarts of our portfolio, providing us with a stable base from which Temasek could expand internationally.

This year, we mark SG60, commemorating 60 years of Singapore’s independence. It is also a time to reflect on the road ahead. Ours is a small country, without natural resources or a hinterland, that defied expectations to become the nation we are today. Singapore’s story is the story of globalisation. Our leaders had the foresight to put in place policies that benefitted from the multilateral rules-based system that spurred global economic integration. This system also maintained a level playing field for small states, creating agency for them in protecting their interests. Like Singapore, Temasek and our Singapore portfolio companies have also benefitted from globalisation, expanding our footprint regionally and beyond. Now, we are faced with the prospect of reverting to a world where “might is right”. This would undoubtedly impact small and big countries alike.

While the road ahead looks uncertain, perhaps even tumultuous, we must take heart that we will overcome the challenges that come our way. Temasek takes the world as it is and is ready to face the future, come what may. We stand on a strong foundation, having built a resilient and forward-looking portfolio, one that can withstand the shocks we have seen and will continue to expect for the rest of the decade. In this era of transactionalism, Temasek believes that the path forward lies in building networks and partnerships. We hold steadfast to our belief that by staying united and harnessing our collective strengths, we can build a better and more sustainable world, so every generation prospers.

LIM BOON HENG

Chairman

July 2025