Temasek Holdings is set to post a record jump in the value of its assets as markets rebounded and the Singapore state investment firm increased bets in Asia.

 

Temasek will likely say assets recovered by about 40% to around the $185 billion peak reached two years earlier when it reports results for the 12 months to March 31, said Song Seng-Wun, an economist at CIMB Research in Singapore. A year ago, assets plunged $55 billion as Temasek lost on bank stakes during the financial crisis.

 

“It’s a pretty spectacular rebound,” Song said. “All that red from the previous year would have turned around very sharply in line with the strong performance of the market.”

 

Temasek bought more shares in PT Bank Danamon Indonesia and Neptune Orient Lines Ltd. over the past year, among investments that increased in value as markets recovered. The MSCI World Index rose 49% in the 12 months through March. Temasek, seeking a successor to Chief Executive Officer Ho Ching, 57, also spent more in Asia as the region led a rebound from the deepest global recession since World War II.

 

Globally, sovereign fund assets climbed 9% in 2009 from a year earlier to US$3.5 trillion ($4.86 trillion), London-based research firm Preqin said in March. Norway’s sovereign wealth fund, the world’s second largest, said the value of its investments increased a record 26% last year. Khazanah Nasional Bhd., Malaysia’s state investment company, said in January the net value of its assets swelled 63% in 2009.

 

Temasek’s biggest jump in the value of its assets since it started reporting in 2004 was the year ended March 31, 2007, when it increased by $35 billion.

 

Temasek said in September it had built a stronger net cash position since the credit crisis. Melvyn Teo, associate professor of finance at Singapore Management University, said the company is “building a war chest to take advantage of opportunities going forward.”

 

Wholly owned by Singapore’s Ministry of Finance, Temasek also doubled the size of its medium-term bond program to $10 billion, under which it raised $5.4 billion between October and February. That’s in part to help develop the local debt market, said Victoria Barbary, senior analyst at Monitor Group in London, and “a good way of diversifying the capital base.”

 

Temasek is set to publish the annual report after real estate unit Mapletree Investments said June 30 that profit surged 87% to $393.8 million in the 12 months to March 31 from a year earlier, boosted by new developments and the increased value of its property holdings. It owns about $6.8 billion of real estate assets.

 

Temasek’s participation in rights offerings by companies in its portfolio bolstered assets. It spent more than $1 billion in the financial year buying additional shares of companies including Jakarta-based Danamon and Neptune Orient Lines.

 

Danamon’s shares have risen more than fourfold from the subscription price of 1,200 rupiah in April last year. Neptune Orient has risen 48% from the $1.30 price offered to investors in June last year.

 

Excluding the purchase of rights shares, Temasek invested about US$4.4 billion in 2009, down from US$9.5 billion the previous year, according to estimates by Monitor Group. It completed 15 publicly announced deals worth about US$2.1 billion this year, according to preliminary data compiled by the consulting firm.