By Eugene Yeo
In spite of the disastrous mistake made by Temasek and GIC in its risky forays into the finance sector which caused us to lose billions of dollars, the PAP spin doctors and apologists continue to insist that they have not “done so badly” compared to other SWFs like Kuwait and Abu Dhabi and that it is “inevitable” that the funds are performing badly in the face of the global economic crisis.
Even our highly paid Prime Minister appeared to be taken in by the spins of his own propaganda mouthpiece. Speaking at the Singapore Tripartism Forum last Sunday, he said:
“Some years it will go down, some years it will go up more. But on average it’s not bad. And we have to take a long-term view because this is not money for now, this is money for many years ahead. If you look at a long-term basis, on the overall on the way the government has managed the money, we haven’t done badly“.
Only fools will be taken in by such outrageous hogwash ! The unsavory truth is - Temasek and GIC’s performance is nothing short of catastrophe ! The extent of our losses beg the question whether the government had exercised due caution and diligence in the management of the funds.
It is a myth that it is unavoidable that our SWFs have lost monies. In fact, there are other SWFs which are making money in such troubled times !
Since the regime has always been quick to curry favors with China, why did they hide the performance of China’s SWF from Singaporeans ?? There were no reports on the performance of China’s SWF in both the English and Chinese dailies. Shouldn’t we deserve to know how Temasek and GIC perform in comparison to the SWFs of other Asia countries ?
“China Investment Corp (CIC), the country’s $200 billion sovereign wealth fund, made a profit of about $10 billion last year as it benefited from staying largely in cash and avoiding new investments in Western banks, a source close to the fund told Reuters on Tuesday.
“Combining all the investments together, CIC is still enjoying a positive profit of slightly less than 5 percent, which is better than many other foreign wealth funds,” said the source, who declined to be identified as he was not authorised to speak to the media.
CIC’s profitability stands in sharp contrast to the recent results of some other sovereign wealth funds (SWFs).
The assets of Singapore state investor Temasek Holdings [TEM.UL] shrank 31 percent to S$127 billion ($84 billion) in the eight months to November, due in part to poorly timed investments in Barclays and Merrill Lynch.” (Read full article here)
As the China example has shown us, it is possible to make considerable profits by simply “doing nothing” with the cash instead of throwing them at risky investments.
Furthermore, it is not true that “nobody could have foreseen the financial crisis.” Renowned investors George Soros, Warren Buffett and Jim Rogers had warned about the impending collapse of the United States banking sector way before the crisis stuck.
As early as March 2008, investment guru Jim Rogers had expressed his belief that US bank stocks could fall further and predicts that Singapore’s state investors will lose money on their multi-billion dollar investments in Citigroup and Merrill Lynch. ‘I’m shorting investment banks on Wall Street,’ the long-time commodities bull told reporters in a media interview.
‘It grieves me to see what Singapore is doing. They are going to lose money,’ he added, referring to investments by Government of Singapore Investment Corp and Temasek in Citigroup, Switzerland’s UBS and Merrill Lynch.
Why didn’t Temasek and GIC take note of this warning then and still go ahead and plough in more money into Citigroup and Merrill Lynch subsequently ?
How much money have we been paying for the “top talents” at Temasek and GIC to manage our funds during the “good” years ? Besides the ministerial pay he is getting, how much salary is MM Lee drawing annually as GIC Chairman ? Are these salaries justified ?
Since our leaders have always pride themselves as banking executives in Wall Streets who deserve to be paid at market rates, shouldn’t they follow the practice in the private sector too and resign to take responsibility for the mistakes ?
When they demand us to pay them out of the world salaries, shouldn’t we expect them to deliver “out of the world” performance even in an economic downturn like China’s Sovereign Wealth Fund ? There is absolutely no excuse for their dismal performance. Temasek and GIC are expected to generate returns even during troubling times instead of losing a bulk of our reserves !
Singapore have imported so many China nationals to our shores over the years - Chinese students, workers, prostitutes and Peidu mamas. Maybe we should bring the CIC fund managers which probably cost less than our “first world talents” over to teach our SWFs how to grow their funds for the “long term”.
PAP regime really screwed up big time.
They lost about 100 billion through worthless investments.
Why news black out?
Why no one apologised?
Japanese financial minster resigned and apologised after appearing drunk on TV.
This PAP regime is just hiding and keeping quiet and hopes everything will blow over.
I am really disgusted with their bahaviour.
Pay themselves millions, lose billions, no one take responsibility.
Really worthless this PAP regime.