Tuesday, February 10, 2009

58B!

Temasek's investment portfolio down 31% to S$127b as of 30 Nov 2008
Channelnewsasia 10.2.09

SINGAPORE: Temasek Holdings' portfolio of investments fell 31 per cent to S$127 billion as of 30 November last year, according to latest data revealed in Parliament on Tuesday.

This was down S$58 billion from S$185 billion eight months earlier in light of the global financial crisis.

Senior Minister of State for Finance and Transport, Lim Hwee Hua, said: "This is less than the corresponding declines in the MSCI Singapore Index of 44 per cent and the MSCI Asia ex-Japan of 45 per cent both in Singapore dollar terms over the same period."

Despite this, the Singapore government said both Temasek as well as the Government of Singapore Investment Corp (GIC) have the ability and resources to weather the ups and downs over multiple economic and market cycles.

Responding to questions in Parliament, Mrs Lim said both Temasek and the GIC have sufficient liquidity to cope with Singapore's funding needs.

Mrs Lim added that Temasek and GIC are long-term investors, and as such they do not have to divest their investments in market downturns.

She said: "They do not have to sell in panic in a market downturn, and are in fact in an advantageous position to invest in good quality assets at prices that are attractive from a long-term perspective during a downturn. The government is confident that they will continue to deliver good long-term returns within the risk limits set."

Mrs Lim said this is not the first major downturn both soveriegn wealth funds had gone through. She noted that both Temasek and GIC had bounced back from significant reductions in asset values in previous slumps, including the 1997 Asian Financial Crisis.

And despite the downturns, the two investment companies had seen credible investment returns over the years.

Mrs Lim said: "In spite of these market gyrations, including the current downturn, for the 20-year period to late 2008, Temasek had achieved annualised returns of about 13 per cent. GIC, which has a diversified and more conservative portfolio, also had credible returns over the 20-year period.

"As at March 2008, the 20-year average return was 5.8 per cent in nominal Singapore dollar terms. The figure for March 2009 would have fallen as a result of the decline in 2008, but would not be sharply down."

Mrs Lim also reiterated that Temasek must continue to operate commercially without government interference. But she does not rule out the possibility of a third investment fund set up to buy into local companies hit by the current downturn. Mrs Lim was addressing suggestions for Temasek to play a role in rescuing local firms that have been affected by the economic crisis.

She said: "If Temasek is asked to undertake a national agenda, it will in fact validate some of the concerns over sovereign wealth funds having political objectives, and may ultimately impede Temasek's ability to participate in investments internationally."

My comments:

Dear Friends,

It was during a lunch break last week- a time when most of us would take a few minutes off from our packed schedules to grab a quick bite in the doctors’ lounge and to exchange views about the salient topics of the day, when someone broached the subject of the resignation of Mdm Ho Ching as Temasek Holding’s CEO and Executive Director. The consensus was that we were unanimous in our gratitude for her selfless sacrifice to the nation and that it was regrettable for her to leave now just when the tree that she had nurtured was about to bear fruit!

Ok, I confess. The above situation is a "tongue-in-cheek" account that did not actually take place and is but a pure figment of my imagination.

I will briefly describe a typical day in my hospital and what actually happened.

We do have daily conversations over lunch. But these leisurely fellowships are characterized by lively discussions and conversations which are not genteel and refined-as depicted above, but passionate and animated. Perhaps in the OTHER private hospital, discourse and deliberations are carried out in hushed tones and half-whispers but in OUR hospital’s lounge, everyone has an opinion and is not afraid to voice it.

On the topic of the resignation of the Madam, most felt that it could not have come a day sooner. The laudatory remarks by the Main Stream Media (MSM) were not universally shared and when the Madam’s name was mentioned certain other names kept coming up and being bandied around. Names like “Micropolis”; “Shin Corp”; “Merrill Lynch” & “ABC Learning Centre” etc.

One particularly cynical guy-who is known to be brutally honest, said out loud that Temasek’s losses must be at least 30B’s! Most of us asked him to keep his opinions to himself as we did not share his pessimism and dismissed his guesstimate as idle talk!

Little did we know that his 30B is a gross underestimate of Temasek’s (albeit paper) losses. Double the 30B is closer to the mark!

58B is the number!

I am Flabbergasted, astounded, stunned, bewildered, and shocked.

And we have not even looked at GIC’s numbers yet!

Dr.Huang Shoou Chyuan

16 comments:

singaporenewsalternative said...

The losses should be S$88.2 billion. Lets not forget how Temasek hastily sold our 3 energy companies for a combined $18.2 billion late last year. Furthermore, Ministry of Finance had injected $10 billion into Temasek in April 2007. Both helps to pare down the losses to $58 billion.

nofearSingapore said...

Hi Sgalternative:
Now that you jolted my memory, how about how SFI was sold from the right hand to the left- ie from Temasek to SATS? I knew there was something fishy-how shareholders were told how a great fit SFI was for SATS and what great synergy etc!
Shamelss- the lack fo accountability!

game1980 said...

In the short term, it is losses but in the long term we may be winners.
Then again in the long run we are all dead.

Anonymous said...

What about Raffles Hotel? Is there any extraordinary gains there? We are selling off our crown jewels to par down the losses as window dressing.

I get the distinct impression that there is no limit to create the correct impression.

The measure of a person is based on how well that person is able to face up to the mistakes. It seems like there acknowledging a mistake like the losses and MS escape is taboo.

Anonymous said...

Let's see...

When she bought Micropolis, she lost S$600m over 600 days or S$1m per day.

Now she lost S$58b over 6 years or 2190 days which translate to S$26.5m a day.

I don't think Singapore can afford another mistake by her.

Anonymous said...

What is more scary is that the premises of 'franchise, good brand name, cannot fail' labels attached to these 'deal of a life-time', 'long-term investment horizons' have all been shot to pieces.
The fact that ML doesnt exist anymore and got paid nothing for their goodwill tells you it's all gone. UBS is on verge of breakup and so is Citi.. So what franchise are we talking about here?
Let's face it, The Chips are Down. And I don't think any Chip can do anything about this from here on without a seat on the board (if intact). I hope I am wrong but recent history is on my side.

Anonymous said...

What is more scary is that the premises of 'franchise, good brand name, cannot fail' labels attached to these 'deal of a life-time', 'long-term investment horizons' have all been shot to pieces.
The fact that ML doesnt exist anymore and got paid nothing for their goodwill tells you it's all gone. UBS is on verge of breakup and so is Citi.. So what franchise are we talking about here?
Let's face it, The Chips are Down. And I don't think any Chip can do anything about this from here on without a seat on the board (if intact). I hope I am wrong but recent history is on my side.

Anonymous said...

I think it is unfair to blame her for things beyond her control.
Let's hope that Singaporeans will vote with their brains and not their hearts or a freak election result will occur.

Anonymous said...

Back in end December 2008, the "rumour" (quiet whispers from those in the know) in the market then was that Temasek's investment portfolio suffered a 50% hit.

This latest announcement of a 31% or S$58b drop (as of Nov 08???? and not Dec 08) is PR damage control..... We have to expect another huge loss figure post end Mar 09 reporting...... With markets for all asset types in difficulties now, profits from sale of non-listed assets would be near non-existent.

The conclusion; they are no different from monkeys picking stocks by throwing darts.

Kharma

family man said...

Come on - it is not HER fault.

Look at the boards of directors of Temasek, and be scared, be very scared.

Anonymous said...

I still think Tamasek will continue to lose billions after Chip Goodyear.

Why? because the actual decision maker has always been one 83 yr old man who think he knows best.

Goodyear is only a pretty poster boy. He won't be given the real authority to make independent decisions. Like all the rest of the foreign talents.

That's why most left early.

Anonymous said...

Can you imagine how the board makes decision?

Let's buy this?

No lah check first....

Come on - you don't trust me is it?

That is how the board of directors make their due diligence, spend billions, and how our presidential council and president spend our $4.5 bil.

Donb't believe? Read Tharman's account.

1 week for the President 2nd key to unlock.

Unbelievable

Anonymous said...

That's why we need to pay top dollars to hire them to run our funds.
Do u want a good president to check a bad government or a bad president to check a good government.
As long as we vote responsibily for the PAP, we dont have to check on them!
Vote PAP and more good years!

wincent said...

Hey when you get the opportunity, you should also visit the other singapore tourist attractions . What you have visited might have been good, but there are still a couple more attractions you can visit. The zoo, birdpark etc..

Anonymous said...

A few months ago i saw this link on singaporedaily.net.

http://singaporewatch.org/2008/12/17/alt-a-and-option-arm-the-2nd-wave-after-subprime/

As i see it, we are barely into the tsunami.

Anonymous said...

I think the figures of GIC has been revealed and we lost more than $100B sing dollar in all with gic and temasick.