* Portfolio value falls 2.2% in year to March 2020

* Senior official says Temasek not spared impact of COVID

* Says value of listed assets up in new financial year

* Says recent market rebound should be viewed with caution

SINGAPORE, July 21 (Reuters) - Temasek Holdings said it was ready to invest in opportunities arising from volatile markets after the Singapore state investor's net portfolio value (NPV) declined for the first time in four years, hit by the coronavirus pandemic.

Ranked among the world's biggest investors, Temasek led a multi-billion dollar funding for Singapore Airlines and supported a rights issue by rig builder Sembcorp Marine as the health crisis took a toll on companies.

Temasek said on Tuesday its portfolio value fell 2.2% to S$306 billion ($220.30 billion) in the year to March 2020. This came after three consecutive years of gains, with its NPV rising 1.6% to a record S$313 billion in the year to March 2019.

Temasek said the drop in its portfolio value compared with an 18.3% slump in MSCI's Singapore index and a 5% fall in MSCI's World index.

"We were not spared the impact of COVID," Dilhan Pillay, CEO of Temasek International, said in a pre-recorded video, adding that the end of Temasek's financial year coincided with some of the worst of the market dislocation during the pandemic. Since then, however, the value of its listed assets has risen.

Temasek said it ended the year in a net cash position with a strong balance sheet, which gave it firepower to support its portfolio firms and make new investments in volatile markets.

Global equities rebounded sharply in the second quarter but rising infections have forced governments to re-impose lockdowns. "The market rebound we've seen in recent weeks should be viewed with caution," Pillay said.

Temasek reported one-year total shareholder returns of minus 2.3%.

"It's a challenging period for Temasek to navigate through this recessionary period awaiting the start of a new sustainable growth cycle," said Song Seng Wun, an economist at CIMB Private Banking.

The preliminary figures on Temasek's performance come ahead of final audited data in September. ($1 = 1.3890 Singapore dollars) (Additional reporting by Aradhana Aravindan; Editing by Jacqueline Wong)