Leong Sze Hian
Both the Merrill and BoA losses came to light only after securities filings in other countries or when international news agencies reported them – and were not voluntarily disclosed by Temasek or the government.
“Temasek Holdings sold its stake in British banking giant Barclays in December and January, at an estimated loss of between 500 million (S$1.2 billion) and 600 million pounds, sources told the Straits Times”. (Straits Times, 4 June 2009)
This comes on the heels of Minister Mentor Lee Kuan Yew’s remarks in March 2009 when he said: “We’ll most probably stay with the financials… Eventually, it must recover. It is the circulation system of the world.” (Reuters)
When asked to comment on the latest suspected losses, which was first reported by Reuters, a Temasek spokesman was quoted as having said, “We don’t comment on unsourced reports”.
This is akin to saying to Singaporeans that they are still not entitled to know about how much of their money has been lost once again.
The remark by Temasek’s spokesman is really a very weak excuse not to confirm or dismiss the report. I think Singaporeans and our Members of Parliament (MP) should finally say “enough is enough” and demand that the government and Temasek give us straight answers and be accountable and transparent to Singaporeans.
Both the Merrill and BoA losses came to light only after securities filings in other countries or when international news agencies reported them – and were not voluntarily disclosed by Temasek or the government. Earlier in March, the Minister Mentor revealed GIC’s losses to Reuters and not to Parliament which debated the issue a few weeks earlier.
Are there any other losses that Singaporeans still do not know about? And should Singaporeans wait for international news agencies to reveal these?
Non-disclosure of losses between November to March
I refer to the report, “Temasek has made net gain of S$56b since March 2003″ (CNA, May 28).
The Finance Minister said that “even after taking into account the recent sharp decline, Temasek’s portfolio had still grown by S$56 bn over the course of the cycle.”
So, what this means is that Temasek’s investment portfolio gained S$114 bn from March 2003 to March 2008, and then lost S$58 bn between March 2008 and November 2008.
The key point to note is that the mark-to-market unrealized losses (including Merrill) are only until November 2008. What we do not know is how much it has lost from November 2008 to March 2009.
The minister explained this by saying that “the full year accounts to end-March 2009 have not been audited” and that “the picture should not be fundamentally different.”
He further said the sale of the Merrill/BoA investment would not have aggravated the results either. Still, Singaporeans would want to know the losses incurred, if any, for the period November 2008 to March 2009.
If the “sale of the Merrill/BoA investment would not have aggravated the results either”, why is it that the actual amount lost is still not disclosed to Singaporeans?
Inconsistent and arbitrary use of market cycle periods
I am somewhat puzzled by the apparent inconsistency that after 9 paragraphs of the Finance Minister’s statement in Parliament, which referred to a 5-year cycle, from paragraph 10 onwards, it started to refer to a 6-year market cycle instead.
“But while Temasek has performed better than many other large investors over this 6 year market cycle, it is not realistic to expect it to outperform in every cycle,” Mr Tharman had said.
“It is also not realistic to expect it to avoid losses on every individual investment, or losses on its overall portfolio when the markets go through sharp corrections.”
While that may be true, without a consistency in reporting of its performance over 1, 3, 5, 10, 20, 30 years, and since inception, how can one make a meaningful comparison with others?
Why does the minister arbitrarily use a 6-year market cycle for his evaluation, instead of the 5-year cycle he used earlier? In the final analysis, Singaporeans still do not know how much was lost in the Merrill investment.
And the how, why and who were involved in the decisions and processes leading to the loss! If we don’t question how and why it happened, how do we learn the lessons to avoid a repeat of the Merrill/BoA saga?
This is the fundamental issue, which is an entirely different issue from how well Temasek has done over the last 6 years.
Read also: Temasek may have lost 800 million pounds on Barclays – Reuters —-
Referring to Sarek_home @95,
I think you mean the issue is not so much about losses but informing the citizens about the losses in a timely manner as there is no reason why investment results should not be known to public given that someone out there would know. case in point, overseas world class internation solid bombastic news agencies of the 1st world standard.
And they should explain what is meant by 10,20,30 years long term and selling in dec and jan.
since they so greatly talented, should have no problem exprain.
hi TiredSingaporean on June 5th, 2009 1.30 pm,
i totally understand what you are saying! ;)
hi prettyplace,
i agree, i think S’poreans need that well timed knock on the head, after MiniBond saga, NKF, Ren Ci, some people never learn, so need some “remedial lesson” (train & re-train? lol)…..
……………………………………………………………………………………………………………………………….
if the lost is an individual’s own, few would have demanded for transparency as the loss is private matter, but when the lost is taxpayers’ money then its many people business.
……………………………………………………………………………………………………………………………….
in S’pore long term = you will kick the bucket before you see the money.
your children? maybe lah, but nobody can confirm…
Now you all know why our PM getting more and more services from lawyers and people who can really twist their stories and their tongues well.
But a reminder to our ministers, non-scholar Singaporeans are not IDIOTS!
When will these people honestly come out clean and tell the people truthfully how much of the peoples’ money they have lost in 2008 alone?
$56 net billion …. yeah right? Why sell Bank of America and Barclays and be long term investor to recoup losses then?
“non-scholar Singaporeans are not IDIOTS”
In Singapore, the converse is true.
aiyoyo
sad story
aiyoyo
The sadder thing is…. MOST SINGAPOREANS DON’T CARE ABOUT THIS!
As stated in my previous comments, I still don’t get it why GIC and Temasek went to invest in troubled US Banks in the first place, the cause of this global recession. Very amateurish investment strategy.
Long term investment means “hold it till death do us apart”. Reinvestment of dividends using the law of compounding. Albert Einstein mentioned the law of compounding is one of the great wonders of the world. Things just get compounded.
The period where Temasek and GIC offload their banking shares is the period where it feels like it doom, doom, doom. That is the worse time to offload shares when prices are so depressed. It pains me that they miss the stock market rally after march till now. Their losses would be a lot less if they are to offload the troubled banking shares now. They are making the mistakes very common people will do, nothing special about the investment managers in Temasek and GIC.
***I really wish they had offloaded their shares during this bear market rally. They miss it by 1-2 months. Losses could have been less.
Good news I feel is that I hope they learnt their lesson after seeing them buying shares of Olam International, a commodity firm. Its an area where you can see potential growth in it. Commodities are real assets. Olam International may not be the best commodity firm to invest in but its certainly a better move. The propects are better.
I do not expect Temasek and GIC to beat certain indexes every year. As a normal Singaporean, I just hope that they can protect our wealth, make good, wise, conservative, long term investments. In other words protect our wealth.
Lets interview him , the talent, and see why he did what he did.
such talents must have lots of words of wise.
Is his pic on the net ? can see his hansom face?
I have a dream. I am dreaming of investing in all the power plants in China, regardless of the provinces, any one will do. I wonder the Temasek or GIC will buy my company and help me realise this dream. And I think over the long terms, may be 20 years from now or 50 years, we can sell all the power plants in China to eventual private utiltites companies for a massive profit. Enough for Singapore to lose billions in the next 100 years. China has progressed so fast over 20 years and where can they be in another 20 years. This is long term investment, in line with the 5, 10, 15, 20 years cycle reported by finance minister. May be China not good enough, we go to India too. Eventually, may be these two countries can supply power to us via newer transmission technologies too. You think the Temasek and GIC will listen to Singaporeans or foreign ang mo fund managers? I still dreaming..fading…away
104) We want the Truth on June 6th, 2009 2.06 am
“When will these people honestly come out clean and tell the people truthfully how much of the peoples’ money they have lost in 2008 alone?”
Not say i wanna say but how could you say what you say?
I mean , they say TH Perfect 10 and I don’t mean “spin the record DJ perfect 10″ ok.
You know what? This world is so amazing. I almost faint.
The day might come when there is a change of the government and te new government will find that our so-call reserves are gone and we may have to suffer like the 3rd world countries.
By then the present government will have fled the country and enjoying themselves somewhere overseas with all our monies. Many countries will accept them and we will not be able to touch them (like Thaksin).
We will then have to suffer from then on as a nation. Some countries who have gone through that never recover.
This is the problem with an unchecked government. When they can assess the nation’s reserve without check. The president only listens to the government anyway, he does not represent the people at all. He may have to flee too on the faithful day.
Just a warning of what we are facing if we still don’t care.
112) Joel Low on June 6th, 2009 1.28 pm
“The day might come when there is a change of the government and te new government will find that our so-call reserves are gone and we may have to suffer like the 3rd world countries. ”
IF that were to be true, we could not completely blame them.
The People are surely also Responsible as well, one way or the other.
They consciously made the decision. 50 years. Half CENTURY. In a Row. Non-stop. Continuous. Eternal.
Many also have migrated.
Harry on June 5th, 2009 8.53 pm,
simple. he is just being a senile 80+ old man who just refused to give up his power and position and probably will create history by being founder who make singapore great and as well downfall by screwed up in coming near future.
113) To Joel Low @112 on June 6th, 2009 1.33 pm
Agreed 100%.
Singaporeans are so good to their leaders.
Upturn and Downturn.
Left turn and U-turn.
Long Term and Short Term.
must aim for this kind of job.
1. Don’t confuse your desire for transparency with the fund performance. If you are concerned with portfolio performance, then compare it with alternatives available to you, such the the MSCI World Index. If you want to use more competitive benchmarks, then make investment decisions yourself and don’t expect the government to be responsible for your savings.
2. Don’t assume you own a share in the fund larger than it is. How much does income taxes and CPF contribute to the reserves, especially if you are not in the high tax bracket?
118) two things
1 thing for you, how much is yours and your employer’s CPF contribution? it many not be much compared to the overall fund, but it is a substantial percentage of your own money….capish?
Come on guys…..do you expect the FM to criticise his boss’ spouse??
#118 SZ,
1. I don’t follow your logic. If you only have $1, and you contributed to the fund. Does it give you the right to the whole fund?
2. You may not like how your money is managed but that is an entirely different question from the pain that you see when your contribution is depreciating. You can suggest a better way of your portion of the funds, but don’t make a big hoo-ha just because your own a share.
HC scored merits, again!
aiyoyo
do we need to work until 80years old? cpf how huh?
aiyoyo
117) two things on June 6th, 2009 2.55 pm
two things ….. you are wrong. This is exactly the type of attitude that a lot of Singaporean have and it is selfish, self-centered and irresponsible.
Whether how much any individual small contribution compare to the whole sum of the reserve, Every citizen own Singapore. So it is everyone responsibility to check and be concerned about the whole amount of the reserves.
For your info, the reserves are monies accumulated by our late ancestors as a savings for a raining day for Singapore. IT BELONGS TO ALL SINGAPOREAN.
If according to your type of attitude, majority of us have no rights to ask about our reserves funds because unless you are a high earner like 3-4 million per year, our share is too small in comparison and we just have to accept even if the government lost all of it.
If every Singaporean are like you, we are doomed. You have to wake up your idea and stop your propaganda for the PAP. Respect the right of everyone!!!
We need a good and trusted team to manage our reserves, and I think we have them despite of the announced losses in BOA and Barclays etc.
Our net worth had increased. Do you believe? If you don’t then you have reasons to want to know the true picture.
I will be very disturbed if Temasek or GIC give too much attention to all these ego trips and unreasonable demands.
Logically who do you want to manage the reserve? Ministers with lower pay or even higher pay. I feel that we have got the best now, but investment need some luck too.
Maybe we can be disgruntled with the CEO because there had been too many bad decision calls like Micropolis, ABC, BOA, Barclays, etc and bad explanation like ‘I will do it all over again!’
But we still have a majority in the team that are competent, honest and committed. They had delivered before and they will continue to deliver.
In my heart I wish the Govt will buy an annuity insurance programme for citizens above 80 years old as a gift for their past contribution.
aiyoyo
114b make in 5years, 56b loss in 5years? dont think so la…
who make 114b? who loss 56b?
root cause(s) eliminated? corrective+preventive actions taken?
commoners gain/loss?
aiyoyo
Thinktok, u r contradicting urself.
First u wrote that u believed that we have a good and trusted team. Then u list the mistakes they made. A good and trusted team will not make such huge mistakes that frequently. One multi billion $ loss after another cannot be the product of a good and trusted team. Unless u have low performance target.
Why limit the blame to the CEO ? The frequency and magnitude of the losses are indications of systematic failures.
117) two things,
First your attitudes sucks. All Singaporeans should be treated equally irregardless of the amount of income tax they paid. To line up Singaporeans in a pecking order according to their income and wealth is one of the worst kind of discrimination one can treat a fellow Singaporean.
Two, irregardless of how much income tax we paid, all Singaporeans contributed to the success of the Singapore story. Even the unemployed served NS. Even the cleaners contributed to the economy of Singapore. So all Singaporeans have a stake in the wealth and future of the country. So all Singaporeans have a right to question the government if they perform badly.
There is so much going on within the inner circle. PM has got his man as the FM. So Tharman will be the loyal dog for the LEE family. Just like Dhanabalan. Things are definately not right. Money corrupts. No matter what you say, time will tell. And history will repeat. The LEE family will be caught some day…soon.
Yes, Enough is Enough!
my comment to two things is under moderation, but a number of people has spoken along the same line
Hi 109
I think the FM in T is David H….
Seems still around… tho not so smug anymore
In the world of internet, accountability and transparency can be question using information and news. The government can continue to hide, but the citizens will find out sooner or later. The BIG question is, do we dare to vote them out? We are the one who hand them the power, power corrupts mind. Is the public daring enough to take the power back? We are still a democratic country, we can still vote out the government but how many of us dare to do so? We can only be a arm-chair critic unless u show your displeasure in the next election!
how about this system: make cpf optional. govt don’t need to invest the money of people, and people can invest in the way they like. everyone happy.
to take a step further: abolish all personal income taxes and privatise all public services (housing, education, health care, transportation etc). govt don’t need to be responsible, and people can also pick what they like. everyone happy.
aiyoyo
reset the game la, (everyone take back their own $)
then restart the game again,
make it simple ma. (like monopoly game ma)
oh now remember – MONOPOLY!
aiyoyo
to 132) everyone happy system,
why in the first place do we have a government ?
govenments in a demoncratic system are elected by the people for the people. they are supposed to work for the benefits of their citizens. is that the case in singapore ?
Harry,
A good team can still let in a few goals. So when Temasek make money you are happy and loose money you are not. We all should be happy because Tharman had reported that we made money despite the recent realised losses.
So be it, ask yourself who gave you this happy problem to quarrel and bitch about our reserves. America the great demorcracy is running deficits year after year. Iceland is bankrupt! Singapore is in a happy situation.
Maybe we should get Bernie Madoff to take care of our reserves.
137) Thinktok
Yes, a good team will be given allowance for letting in goals….however you seems to have either A) Forgotten or B) downplay it, that these people had portrays themselves as beyond a good team, they are in fact an extraordinary team ….and for such they should be given extraordinary pay and benefits….and of curse the outcome is expected, we will expect unrealistic extraordinary results…
so in short, don’t wear a hat that’s bigger then your head…and this is the outcome of them trying to do it…
and against Mr Thinktok, you are another one who use bad performers to bring out singapore in a better light, which is a typical contrast trick….how about you rephrase your statement using the better performers? the outcome will seem so different, and not so bright for TH
To 135) thinktok,
1.Did the average Singaporeans benefitted from all the hundreds of US$billions being stashed away ? What is the use of keeping so much money for some imaginery future problems when at present average Singaporeans are struggling. In Australia even though the government has to borrow, they are still prepared to dish out $90 billions to help their citizens in this difficult times. In Singapore even with a few hundred US$billions, the government will rather let Singaporeans suffer than to take some of the reserves to give to them.
2.The huge reserves come about because the government has been very stingy with Singaporeans. They are putting an unnecessary large amount of revenue away when they should be spending it for the benefit of the current generation. Why are they paying Singaporeans such low interest rate on their CPF balances when the same money were used by the government to earn higher returns?The risks they take are still risks to be bear by Singaporeans.
3. The present PAP government is so inferior compare to the PAP government of the 70′s and 80′s. Those PAP old guards don’t get $million pay and yet they really uplifted the quality of lives of Singaporean. The current PAP regime is letting in too many goals and Singapore is losing. Singapore is the first to enter a recession and our recession is the deepest in the world. While the Abu Dhabian made $billions from their investment in Barclays, Temasek lost $billion. Something must be very wrong if u r happy with their performances.
Harry,
I agree with your observations para 137. I like you wished that our Govt can release some, a small bit of it to benefit the people. How and in which area I do not know. For example the Arts in Singapore. They have Telok Kurau Studios and FAS in Jalan Eunos. They are struggling and I do not think it is actively promoting arts in Singapore. Surely a grant can be given to them to build them a more permanent facilities in a more permanent Location, instead of giving them short leases. Spending billions on Art Museums and Durian do not directlty benefit the majority of Singaporeans, maybe for TOURISM and foreign talent.
High pay was due to benchmarking to commercial renumerations. Always choosing the top winners is debatable. Even Tiger Wood has his bad days. Our CEOs pay are pegged to American and European CEOs which is now quite debatable, as they managed to bankrupt their companies like GM, Country Wide, Freddie Mac, RBS etc etc.
Lost is lost. But as whole they have scored more goals than letting in goals. Next time may not be so lucky!
#127 Harry,
1. I’m not discriminating against low-income people. The point is when you buy a unit trusts investment, you look at how much your investment gain or loss, not how many billions the fund is gaining or losing. You have to measure the performance of the whole portfolio, and not pick at specific investment decision. No fund is able to guarantee all its specific investments will gain.
2. The second thing is don’t confuse fund performance (point 1) with transparency. Will you be happy if investment transactions are totally transparent but yet making a loss? Instead of transparency, is having an influence over investments what you want? If that is what you want then, you should argue that each individual, not the government, should be responsible for his pension planning.
Quotable quotes … just food for thought.
“The great masses of the people will more easily fall victims to a big lie than to a small one,” Hitler said.
“The bigger the lie, the more it will be believed.” – Joseph Goebbels, Hitler’s Propaganda Minister
“Lost is lost. But as whole they have scored more goals than letting in goals. Next time may not be so lucky!”
How about the idea on privatisation of profit and socialization of costs. This is not a closed system within a small group where benefits and COSTS are absorbed fully only among themselves. Where serious blunders have been morphed into a more subdued scoring of goals, why are things going to be improved with views not to enlighten but to provide intellectual cover.
correction
“why are things going to be improved with views not to enlighten but to provide intellectual cover.”
HOW are things going to be improved with views not to enlighten but to provide intellectual cover
134) Harry on June 7th, 2009 11.13 am to 132) everyone happy system,
why in the first place do we have a government ?
“govenments in a demoncratic system are elected by the people for the people. they are supposed to work for the benefits of their citizens. is that the case in singapore ? ”
The big question is:- are we a democratic country with a democratic system in the first place?
To 139) two things,
1. If the fund u invested in starts to give huge negative return, what will u do ?
2.If your fund don’t tell u their performance, how will u know whether they are making money of not? Will u invest in a fund which did not update u regularly and truthfully on their performances ?
Hi Harry 146) to help you add on
and To 139) two things,
people will be unhappy either way there are loses, but trying to hide it or cover up only makes it worse…let me ask you, with all due respect, if you have some illness, will you want your doctor to tell you or do you want him to lie to keep you happy? capish?
“If that is what you want then, you should argue that each individual, not the government, should be responsible for his pension planning.”
Ain’t it ironic, that 20% of your own CPF contribution plus employer’s contribution is been held up for your own “future” pension….and how will the money who own this money but has no way to assess it and knows its gain/lost be responsible for his pension planning?
next thing we will be hearing is, plan those pension with the other 80% of the money you are taking home….with those people little realizing that there is nothing much left from that 80% due to living and housing expenses.
Ordinary Singaporeans must feel powerless – utterly powerless in the face of a huge and overwhelmingly powerful state apparatus. It’s like an individual trying to stop a hurricane. The who hold the power and authority act with absolute impunity. I can understand why Singaporeans feel so trapped that the only outlet is act deaf and blind. There is simply no light at the end of the tunnel, at least not yet.
But there are more powerful establishments that the S’pore govt (amongst others)is at the mercy of – the world financial institutions and military complexes. They forrm the ‘invisible’ govt that controls the world and they control the main mass media outlet that controls the majority of the hearts and minds of the people of this world. YES, the one world government is already in existence. Either you with thme or you are against them.
the word temasek is now a jinx word in my dictionary, anything to do with it is bad luck
Temasek used to be a prime and prestigeous name. Now the mention of Temasek invoke anger, disgust and worst cynical laughter. That just show how much damage the management has done to Temasek. To still consider Temasek to be doing well is the utmost insult on the senses of Singaporeans.
I find it interesting that in 1992, the current FM was guilty of “inadvertently” letting 2 economists from Crosby Securities and 2 reporters from the Business Times see 2nd quarter flash projections of Singapore economy’s performance which is considered offical matters, thus violating the Official Secrets Act.
Whenever someone signs on with the civil service, they have to sign some document pertaining to the OSA and is given a copy of a list of violations which will fall under the purview of OSA.
Dunno whether The FM said he didnt know it was a secret, havent tell the public means its a secret *duh*
The other 4 people said, the FM gimme leber say its a secret, so all claimed they were unaware and that the govt’s OSA is so undefined that anything can be considered a secret when deemed necessary. Like say some MP’s bra size.
The chaps from the BT went on to publish the 4.6-4.8% estimated figure in June way before Big Brother’s official report in August.
The current FM was then the Director of MAS. This was reported in the NY Times. Since I was in sec sch then, I cant remember reading abt it in the local papers.
The current FM, who has like 3 degrees, one from LSE, Cambridge and Harvard cant tell what is official, what is secret and what you cant share with reporters.
The current FM was found guilty, fined $1,500 and a decade later holds a dual portfolio of education and finance, now is the FM.
And here I was under the impression that if you are convicted of a crime in Sg, you cant apply to work in the civil service, or is it that the FM is doing voluntary work and is not being paid, so the govt didnt take into consideration his criminal history. People like him end up in political positions as they have decided to take it up the ass from the current political action party. the party gets elected as a whole. they cant say, okay we are in power, but i want someone from the opposition having the educational portfolio, cos they assume since its the opp, they are GUARANTEED to screw up the job. not cos they are working for the people. no, cos their views are not in line with the BIG brother.
Tharman has such an adorable, glistening pate.He ought to use it to reflect more light on our CPF investment,especially the losses……….