Singaporean state investment company Temasek Holdings said its investments inched higher to a fresh record high in its last financial year as Asian companies reaped solid profits.
Temasek said in an annual report Thursday that the value of its investments rose 3.8 percent to 193 billion Singapore dollars ($157 billion) in the fiscal year ended March 31. The portfolio rose 42 percent in the previous fiscal year.
Temasek's net profit for the last fiscal year jumped to SG$13 billion from SG$5 billion amid improved earnings from the companies it has stakes in.
Temasek has benefited from a shift to Asian assets as the region enjoys stronger economic growth than the U.S. or Europe. Investment in companies in Asia account for 77 percent of the fund's current portfolio, including 32 percent in Singapore.
"We remain optimistic on the long term growth of Asia," Dilhan Pillay, head of portfolio management, said at a news conference. "Many countries in Asia will benefit from demographic and urbanization trends."
Pillay warned that the debt crisis in Europe, high unemployment in the U.S. and measures to control quickening inflation in Asia are hampering global economic growth.
"The U.S. risks an extended period of modest growth," Pillay said. "The ongoing austerity measures in Europe may further dampen the fragile recovery in the region."
During the fiscal year, Temasek invested SG$13 billion, including SG$4 billion in share issues and recapitalizations in companies such as China Construction Bank Corp., Bank of China Ltd. and Standard Chartered Plc.
Temasek raised about $3.6 billion this week through selling part of its stakes in China Construction Bank and Bank of China.
"We do look at periodic rebalancing of the portfolio," said Nagi Hamiyeh, managing director of investments. "We have sold a small stake in the two banks but remain heavily invested. We have faith in the policies of the Chinese government in the long term and we remain bullish on China in the long term."
Pillay denied a Financial Times report in June that Chief Executive Ho Ching, wife of Prime Minister Lee Hsien Loong, will likely resign next month. Ho did not attend the news conference.
"Ho Ching has unequivocally said to all of us that she is staying at Temasek," Pillay said. "She remains CEO and is fully engaged with us in everything we do."
Temasek said the market value of its investments has grown 17 percent annually since the fund began in 1974.
Singapore's Finance Ministry is Temasek's only shareholder. The company, which is smaller than the city-state's other sovereign wealth fund, the Government of Singapore Investment Corp., owns large stakes in many of the country's biggest companies, including Singapore Telecommunications, DBS and Singapore Airlines.