Here is the latest Temasek annual report:
http://www.temasekreport.com/2010/documents/full_annual_report2010.pdf
On page 20, the Wealth Added is defined. On page 21, the
Wealth Added for each year is tabulated (in billions):
2005: $7.2
2006: $15.6
2007: $23.4
2008: -$6.3
2009: -$68.1
2010: $41.8
Summing up the Wealth Added, we have Net Wealth Added since
beginning of 2005 to be only $13.6 billion. Dividing by 6
years, this means $2.27 billion per year. This means less
than 2% return per year since 2004.
We continue the analysis. The Wealth Added for each year
for earlier years are (in billions):
2000: $19.2
2001: -$30.2
2002: -$10.0
2003: -$20.2
2004: $19.9
Summing up from 2000 to 2010, we have the Net Wealth Added since
beginning of 2000 to be -$7.7 billion. That means we have a
net loss in wealth measured from what we have at the beginning of
2000.
Why then does it seem that Temasek is making lots of
profit? This will require deeper analysis. A wild guess would
be capital injection, or what the report called "net capital
received from our shareholder".
For example at the end of 2005, the total assets is $96.215
billion. To achieve the ending total assets at 2010 of
$173.152 billion, the govt need to add in capital of about $14
billion per year. If the total asset size is increased in this way,
then it is not due to the returns of the investment.
An analogy is this. Suppose you start with $5000 and then add in
$1000 into your stock portfolio every year. After 10 years, if your
portfolio becomes $16,000, then it is unfair for you to claim "my
portfolio has grown from $5k to $16k over ten years". It is
also unfair for you to continue "my portfolio has grown 12%
per year". Although such statements are not technically
wrong, they misled the reader into thinking that the growth is due
to gains in the portfolio. Actually the net gain in the
portfolio over ten years is only $1k.
Conclusion: Temasek is much less profitable than it seems. The
statement that it has regained to its pre-crisis level is
misleading. The claim that "Between March 2005 and March last year,
Temasek's portfolio grew from $103 billion to $186 billion" need to
be further qualified as to how much of the $83 billion increase is
due to capital injection by the govt.