Dividends of Temasek-funded firms could jump 38.8% to $9.3b in 2018: report

DBS had the highest dividend in 2017 that amounted to $3.3b.

The aggregate dividends of eight Temasek-linked companies (TLCs) is poised to reach $9.3b in 2018 which is a 38.81% jump from $6.7b in 2017, a report by IHS Markit noted.

The Dividend Forecasting report pegged Singtel to have the largest dividend in 2018 amounting to $2.8b followed by DBS with a $2.2b dividend forecast whilst other TLCs are predicted to have a $4.3b worth of aggregate dividends.

In 2017, DBS had the highest dividend that amounted to $3.3b, followed by Singapore Telecommunications (Singtel) with $1.6b, and other TLCs with combined dividends worth $3.3b.

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The report also noted that from 2015 to 2017, aggregate dividends from these TLCs fell modestly by 0.5% to $6.76b from $6.79b.

“Although this period was characterized by the plunge in oil prices, the decline in dividends from Keppel Corporation and Sembcorp Industries was offset by the increase in payouts from other companies and the one-off special dividend from Singapore Telecommunications announced in late 2017,” IHS Markit senior research analyst Chong Jun Wong explained.

Dividends from the eight TLCs (CapitaLand, DBS, Keppel, SATS, Sembcorp, Singapore Airlines, ST Engineering, and Singtel) make up around 40% on average of Straits Times Index’s (STI) aggregate dividends. According to IHS Markit, Singtel was the biggest payer within the index until 2018, since DBS is pegged to beat the telecommunication company with the generous special dividend announced in early 2018.

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Temasek is one of the three institutions that contribute to the Singapore government’s budget through the Net Investment Return Contribution (NIRC) framework.