1. Introduction 1.1 Sovereign Wealth Fund Sovereign Wealth Funds are government owned investment funds financed by the country’s foreign currency reserves either through central banks or through direct investments. Fotak and Megginson define a Sovereign Wealth Fund as follows: “Sovereign wealth funds (are) a pool of domestic and international assets owned and managed by government to achieve a variety of economic and financial objectives, including the accumulation and management of reserve assets, the stabilization of macroeconomic effects and the transfer of wealth across generations.” (Bortolotti, Fotak, & Megginson, The Financial Impact of Sovereign Wealth Fund Investments in Listed Companies, 2008) However, a more comprehensive definition …show more content…
Founded in 1974, Temasek was founded to manage Government’s revenue. Since reporting its accounts to public in 2004 to fulfil the legal requirements for issuing bonds, Temasek has experienced a Total Shareholder Returns of 18% per annum. Temasek’s net portfolio value stands at SGD 266 Billion as of 2015. It is wholly owned by Government of Singapore through Ministry of Finance (MOF). Temasek has a diversified investments, currently maintaining a ratio of 55:45 underlying exposure to mature economies vs growth economies. Figure 1 Temasek's Exposure by Geographies (Source: Temasek Annual Review 2014) 1.3.1 Portfolio Performance For the financial year ended 31 March 2015, Temasek’s Singapore dollar one-year Total Shareholder Return was 19.20%. Total Shareholder Return (TSR) is a critical key performance indicator (KPI) to measure portfolio performance as well as evaluate investment decision in firms which forms the crux of the research presented in this paper. TSR is a compounded and annualised measure including dividends paid to shareholders by Temasek however, it does not include capital injections by shareholders. Temasek is a long term investor and tracks its TSR over various time periods. Following gives Temasek’s portfolio performance
The turnover of the company in 2008 was $15,627 million, gradually decreased in 2009 to $14,552 million which again decreased in 2010 to $13,772 million. We can see a gradual drop in the turnover.
The first financial ratio of the analysis is the Price to Earnings ratio (“P/E ratio”). The ratio is computed by dividing the price of one share of common stock, by the earnings per share of common stock. This analysis uses diluted earnings per share which assumes the issuance of new stock for all existing stock options. Also, the price of the stock was computed as an average of the fourth quarter high and low stock prices published in the 10K report of each company, because the year end stock prices were not listed for all the companies. Because the P/E ratio measures the relative costliness of different stocks, in relation to their income, it provides a useful place to begin the analysis.
A very slim minority of firms distribute dividends. This truism has revolutionary implications. In the absence of dividends, the foundation of most - if not all - of the financial theories we employ in order to determine the value of shares, is falsified. These theories rely on a few implicit and explicit assumptions:
These TNCs only began to increase their wealth in the 1980s and 1990s when they sought to increase their share into the world market. This was exercised by moving their capital from country to country according to Baylis et al. (2011). TNCs are the dominant figures in the world’s economy because of the about of net worth they entail. Globalization is the core of what TNCs execute because they are so wealthy that in terms of resources they rival the state and rules of international trade. Domestic economic policies have been changed drasticall...
Singtel (2011) Management discussion and analysis of Financial condition, results of operations and cash flows for the fourth quarter and year ended 31 march 2011, Singapore Telecommunications Limited and Subsidiary Companies.
Making an analysis of the profitability of the shareholder can be seen that although both companies have similar returns, the source of this return is different.
Net Income: The net income applicable common shares go from June 30th: $219,000,000 to September 30th: 290,000,000 to December 31st 2013: 2,001,000,000 to March 31st 2014: 480,000...
Global banking and investor solutions include Corporate & Investment Banking, Asset Management as well as Private Banking and Securities Services, focusing on long-term relationships with Corporations, Financial Institutions, Public Sector,
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998
The financial position of a company offers great insight on the performance of the company on short-term and long-term basis. This work argues that Facebook Inc. is a company with a subjective investment portfolio. The purpose of this paper is to use ratio analysis to determine the position of the Facebook as an investment destination. The first section explores two ratios and their implications to a potential investor. The second part evaluates whether Facebook is bankrupt. The succeeding section offers advice to potential investors. The work culminates by highlighting key points and making necessary recommendations.
The International Monetary Fund (IMF) is an international organization was set up in 1945 after World War II. The whole world had experienced severely destruction during the period World War One and World War Two, each state need the restorative processes and a good platform to recover its inherent ability and make their citizens get rid of poverty, hence economy problem it was the first problem that states should be concerned.
The IMF was created at the end of WWII in order to create a framework for global economic cooperation without creating a second Great Depression. Since its creation it has evolved to tackle a variety of economic issues. The goal of the IMF is to help the governments of member countries “take advantage of the opportunities- and manage the challenges- posed by globalization and economic development more generally.” It tracks global economic trends and performance, alerts member countries of potential problems, provides of forum to discuss policy, and helps governments in times of economic hardship. It provides policy advice and financing to member countries suffering from economic adversity. Additionally, it aims to create...
In turn everything in the present and the future is judged through the stocks as they hold a high importance in industrialized economies showing the healthiness of said countries economy. As investing discourages consumer spending over all decreases, it lead...
For an organisation to rise fund, they usually tend to look at the stock market and capital market to do it so. This is two markets are usually seemed similar by the investors as they both contributes to the development of an economy. But there are significant difference between them. The capital market is a market that consist of stock market as well as the bond market. As a result, the capital market provides a long-standing finance using the debt capital and the equity capital. Capital markets divided into two sectors known as primary markets and secondary markets. The primary market is where securities are issued for the first time whereas the secondary market is where securities that have been already issued are traded among investors (Difference...
Singapore had exported 200.7% of GDP goods and services in year 2012 and this is equivalent to $435.8 billion. 178.5% of GDP of goods and services has imported to Singapore in year 2012. From these data, Singapore is highly demand on importation and exportation for the economic growth.