Temasek accountable to Govt on portfolio basis
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March 8, 2007
THE SHIN CORP PURCHASE
Temasek accountable to Govt on portfolio basis
MR PATRICK Tan Siong Kuan ('Billions at stake, so Shin saga a national concern'; ST, March 3) was understandably concerned that if Temasek Holdings' investment in Shin Corp made losses, Singapore would lose national reserves. But this is not the right way to measure Temasek's performance.
Temasek invests in a broad range of assets to diversify risk and achieve good returns on the portfolio as a whole. It accepts that some investments will do well while others may fail. What is important is that the portfolio as a whole delivers creditable and sustained returns. This is the approach taken by many other reputable, long-term investors.
The Government holds Temasek accountable for achieving good long-term performance on an overall portfolio basis, rather than on individual investments each year. If Temasek were to be assessed on each individual investment, it would adopt an overly conservative investment strategy and ultimately achieve much lower overall returns.
This approach has yielded good results. As of March 2006, Temasek has delivered a compounded annual return of 18 per cent in terms of total shareholder returns by market value since inception, or 28 per cent per annum in the last three years.
For the financial year 2006 ending March 2007, despite the Shin investment Temasek is again expected to do well.
Laurence Lien
Director
Governance and Investment
Ministry of Finance -
forget it...
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Today 8 Mar 2007
Alliances may be safer bets
This letter offers a better suggestion than the decision of GLC. at least we will not be seen as a "foreign govt hostile takeover of Thailand assets" no matter how hard we are trying to tell others that the GLC is a business entity
So, why do GLCs choose to acquire foreign assets?
Letter from Leong Sze Hian
I refer to the articles, "iTV to be operated by Thai govt firm" (March 3) and "Temasek's Thai woes deepen" (Feb 2
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Nominated Member of Parliament Eunice Olsen raised a question in Parliament on the role of Temasek Holdings and asked if it could be more forthcoming in explaining its investment decisions and sharing its assessment.
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As I read in the media about the unfolding saga of problems that our Government-Linked Companies (GLCs) are having with large-scale acquisitions in Thailand, Indonesia, Australia, and with countries such as Hong Kong and China in the past, I am compelled to ask searching questions, with the view that we must learn from the past in order to move forward into the future.
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According to Professors Jeffrey H Dyer of Brigham Young University, Prashant Kale of the University of Michigan and Habir Singh of the Wharton School University of Pennsylvania, in Harvard Business Review (July-August 2004): "Alliances and acquisitions are alternative strategies — that is, the decision to do one usually implies not doing the other. If companies actually factored that into their decisions, they would make better deals."
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This begs the question of what were the internal decision-making processes that our GLCs went through in deciding on acquisitions, instead of alliances, in the various countries concerned?
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"Most acquisitions ... fail. A few may succeed, but acquisitions, on average, either destroy or don't add shareholder value," the professors wrote.
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Our experience in Thailand is a case in point. "Acquisition deals are competitive and risky Â… Companies should consider exogenous factors like market uncertainty", and culture. Will it gain or lose the widespread acceptance of consumers, particularly in acquiring a major national asset of a foreign country?
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According to Rita Gunther McGrath and Ian C MacMillan in Harvard Business Review (July-August 1995): "Business lore is full of stories about smart companies that incur huge losses when they enter unknown territory Â… new markets Â… By definition, new ventures call for a company to envision what is unknown, uncertain, and not yet obvious to the competition."
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What management decision-making processes or other tools such as scenario planning, reverse income statement, pro forma operations specs, assumptions checklist, milestone planning, and so on, did the GLCs use?
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Was "a keeper of the assumptions — someone whose formal task is to ensure that assumptions are checked and updated as each milestone is reached and that the revised assumptions are incorporated into successive iterations" designated?
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How skilled are the GLCs in peripheral vision? Otherwise, we may end up being precisely wrong, rather than being about right.
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A crucial question we may need to ask is whether the GLCs' present organisational capacity for strategic vision is more or less than their future needs? What risk-management techniques were used to weigh known, unknown and unknowable risks?
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I write my comments and questions with the caveat that I know very little about the inner workings of the GLCs, because some, as private exempt companies, may not have much of their internal processes available as public information. -
The Straits times index went up 58% over the last three years..and more for the rest of the asian equities.. If there was a fund that was only earning 28% over the last three years, it would be a lousy fund..
It also doesnt take a genius to beat Temasek in returns, any tom dick and harry who had invested passive index fund could have achieve close to 58% over the last 3 years
18% is also not a sustainable average. You can only achieve that from a small base which Singapore started 30 years ago.
If we can repeat 18% per annum from out current base,
our current 200 SGD billion reserves would be worth 2 867 400 billions in 30 years time or equivalent to 2867 trillions -
ok.
not like we can do anything even if temesek is not held accountable right. -
The day Temasek gets an independent audit or even independent scrutiny would be the day the PAP isn't in power.....
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Why am i not surprise?
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There you go... another packet of Instant Noodles..
This one is Tom Yam flavor... sour, sweet, and spicy!
And is it real food??? And does it fill you???
NO!!!
You can sure trust them to come up with something so "well flavored"!
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Ask freaking pap....where are the profits made?
Ask bloody pap......Claiming that tomasick have such excellent returns...why are our daily basic needs keep rising with ridiculous amount. All these years...costs of daily needs kept rising almost every year.
These farking blood suckers!!!!!!!!! -
3242349235478298 thread about temasek already
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I still find it hailarious that the prime minister, finance minister,and ceo of temasek holdings are quite literally in bed together. So how to have accountability?
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maybe they should create some rules. like in games, the organiser's immediate family members cannot participate blah blah...Originally posted by av98m:I still find it hailarious that the prime minister, finance minister,and ceo of temasek holdings are quite literally in bed together. So how to have accountability? -
Sg govt is addicted to absolute control and would find alliance distasteful!Originally posted by SevenEleven:Today 8 Mar 2007
This letter offers a better suggestion than the decision of GLC. at least we will not be seen as a "foreign govt hostile takeover of Thailand assets" no matter how hard we are trying to tell others that the GLC is a business entity -
I see the day.. It's not too far from now..Originally posted by Fingolfin_Noldor:The day Temasek gets an independent audit or even independent scrutiny would be the day the PAP isn't in power..... -
I think they will increase the age of withdrawing at 70yrs old 4 all Sillyporeans!!!
How come the yield of Tomosicook is so high, but our CPF is 2-4% per year all this while??? where is our return from CPF?????built more bldgs n pay f PAP fun!!! -
Not to mention.. now they changed the rules liao... u can't withdraw all your CPF at one go after retirement unless got special reason (like giving up ur citizenship)... gotta settle with measly monthly payments. Retire liao, still must let Big Brother tell you how to spend ur moneyOriginally posted by foomwee88:I think they will increase the age of withdrawing at 70yrs old 4 all Sillyporeans!!!
How come the yield of Tomosicook is so high, but our CPF is 2-4% per year all this while??? where is our return from CPF?????built more bldgs n pay f PAP fun!!!
pui!
I think it's a good indication of how "well" Temaskok is doing... actions speak louder than words la hor?