By Leong Sze Hian
I refer to the article “Sovereign funds seen twice shy” (My Paper, Mar 3).
This is what the article states:
“It took the Government of Singapore Investment Corp three days in 2007 to agree to prop up UBS AG, ailing from subprime losses. It may take a decade to recoup that investment of 11 billion Swiss francs (S$14.3 billion). GIC, manager of more than US$100 billion of the country’s foreign reserves, faces a paper loss of about 5.6 billion francs when it becomes the biggest shareholder of UBS on Friday, as shares of Switzerland’s largest bank trade at a third of the conversion price on notes it holds.”
Click image to read article
With this being yet another multi-billion dollars loss for GIC / Temasek, the following questions become pertinent:
- Why is it that the total amount of our foreign reserves in GIC is not public information?
- How much in total did GIC and Temasek lose during the financial crisis?
- How were the investment decisions made? Who made the decisions? What evaluative and decision-making processes were followed?
The article also stated that:
“European and US bank chiefs made personal pitches to the funds during the height of the mortgage-market meltdown. Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec 6 2007 and by the evening of Dec 9, GIC had committed to make its biggest single purchase at the time.”
So, what actually happened in GIC during those three days?
The article goes on to say:
“Acknowledging that recouping the money might take longer than initially expected, Mr Ng said in GIC’s annual report, published in September, that he still has ‘confidence’ in the ‘long-term prospects’ of the investment.”
Well, the “confidence” and “long-term prospects” of the investment has now devolved into a glaring announcement by the abovementioned article that “It may take a decade to recoup that investment of 11 billion Swiss francs (S$14.3 billion)”.
One statement the article makes stands out:
“One lesson that all investors, including the sovereign wealth funds, learnt from this crisis is that you have to do the due diligence before investing.”
This statement underscores the need to have the answers to the above questions. Otherwise, how do we learn from our mistakes to avoid making them again?
What “due diligence before investing” did GIC do during the three days?
According to the article “Singapore, Abu Dhabi Face Losses on UBS, Citigroup” (Bloomberg, Mar 2), GIC declined to comment on the nature of due diligence carried out.
So, will GIC now give a comment to Singaporeans?
From the various media reports on sovereign wealth funds, it would appear that GIC and Temasek had one of the worst performances amongst such funds during the financial crisis.
GIC-Medisave Link
Well, what has GIC losing billions got to do with allowing Medisave to be used overseas?
According to media reports, from March, Medisave can be used for overseas hospitalisation through two approved healthcare providers.
What was perhaps conspicuously absent in all the media reports was that there was no mention of whether Medishield would cover such overseas hospitalisation.
Medishield currently does not cover hospitalisation overseas, and all the private insurers’ CPF Shield medical insurance plans also do not cover overseas hospitalisation, except in the case of medical emergencies.
Singaporeans and permanent residents who are considering overseas hospitalisation using their Medisave should be alerted to this issue.
Since the proposal to use Medisave for overseas hospitalisation was first mooted about a year ago, why is it that with almost a year to design this new scheme, no consideration has been given to the vital link between insurance coverage and overseas hospitalisation?
As more healthcare providers are approved, and more people may utilise this scheme, because the cost savings can be more than 50 per cent, will it result in less claims and higher surpluses for the Medishield scheme?
Why not disclose the claims experience and surplus of the Medishield scheme now, so that if there is an improvement in the future due to lesser claims in Singapore, the Medishield premiums may be reduced gradually, or cover periodic health screening to benefit from early detection which may lower overall costs in the long run?
As there are additional risks and inconvenience in using overseas hospitalisation, we could also review the current limits for the use of Medisave in Singapore.
In this regard, often patients pay out-of-pocket because the current Medisave limits may not be enough to cover the increasing medical costs in Singapore.
From the perspective of the standard, quality and risks of treatment from the patient’s viewpoint, patients should not have to balance the subjective dilemma of deciding between overseas hospitalisation that are within the Medisave limits against hospitalisation in Singapore which exceed the Medisave limits.
Allowing Medisave to be used overseas may just be a short-term partial solution to the problem of rising healthcare costs in Singapore. Ultimately, we have to consider spending more on healthcare than the current four percent of GDP, of which I understand only about two per cent is public spending.
So, if GIC and Temasek has not lost billions, perhaps we could have spent more on healthcare?
By the way, medical costs have gone up again.
Between 2008 and 2009, the increase in the average bill sizes ranged from three per cent for Class B1 to 10 per cent for Class B2, according to the report “Hospitals bills higher but most did not have to fork out cash” (Channel News Asia, Mar 3).
This means that the percentage increase in the hospitalisation bills incurred by poorer Singaporeans who go to Class B2 wards (10 per cent) is more than three times that of the increase in costs experienced richer patients in Class B1 wards (3 percent).
Surely some of the billions lost may have helped to limit rising medical costs if we had spent more on healthcare.
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My impression all the while is that Ho, like many aunties punting in the stock market, thought the financial crisis was an opportune moment to dive into the market for bargains and make a killing to show her mettle. Like those who do not do their homework, she was slaughtered, abeit with no regrets, cause it wasn’t her hard-earned money.
To limit medical cost, we need to limit the number of medical doctors in parliament.
These self serving pigs will not allow medical fees to decrease since they benefit from it.
A direct conflict of interest issue illustration again.
//Sgcynic
The people who made monies from HO Ching during the crisises are the Arabs who bought her barclays’ share.
Ho & Lee should step down immediately from the SWFs to take responsibility for gambling with taxpayers’ monies.
GIC & TH urgently need to be audited by an independent auditor, before the shit hits the fans.
The way things are going, Singaporeans will only do something when they wake up one day to find their savings in Singapore dollars become worthless, by which time it will be too late.
These PAP ministers shld be jailed for TREASON.
Take a look at the so-called family tree of TH,who dominates all the top most positions? End of the day,all the monies of TH which more than S$170 billion or so own by L.. and family,these are really their wealth blanketed by TH.Whether lost or gain from those investments,not a single ordinary Singaporean’s benefited from it.If someone say,yes Singaporean’s benefited from it,in what way?
As for those hospitals across the causeway whereby Singaporean’s able to use their medisave because all those mentioned hospitals partly owned by Singapore blue-chip healthcare group.
on the one hand the pigs are assisting singaporeans to seek medical care in malaysia and on the other hand the same pigs are actively promoting singapore as a medical hub to lure foreigners to come here for medical treatment. How ironic!
singaporeans you are not welcome to use the medical facilities in singapore. foreigners you are most welcome.
Isn’t it strange ?
Our Prime Minister does not even dare to utter a single word about all these losses ?
And neither has his father or wife mention a single word about all these losses ?
Want to enjoy the power and monies but doesn’t want to face the music ?
You are wrong, that is their monies so dont need to say anything to us.
You see the pic?
smells like mo good years?
The latest this morning is that GIC has lost another $5 billions in the UBS investment. http://www.theedgesingapore.com/the-daily-edge/business/13194-gic-says-converts-ubs-notes-into-shares.html
in the US, the finance committee will be grilling those responsible for the losses in live TV telecast. In Singapore, nobody needs to be accountable. Uniquely Singapore indeed!
They do not have any info, the do not know what they are doing…and that’s why they make a lost…look at the Oracle of Omaha himself…paper profit of 1.8bil?
well, it contrast warren buffett is the man who says that he will want to buy a wonderful company at a fair price and not a fair company at a wonderful price…which our dear top leader seems to contradict this wise oracle’s advice
If they have lost money in GIC and Temasek and they feel, they do not even need to explain this to the taxpayer, that is fine with me. If they even want to pretend that the Emperor has no clothes, that is also fine with me. Even if they want to pay themselves the highest salary in the world, that is fine with me. I only ask for one thing in return, no more tax raises. That is all I care about, no more increases in GST, levies, tarrifs and all that. Just leave us all in peace to live our life in dignity, pride and with a modicum of self esteem.
Not all of us can be journalist working for ST who get fat salaries and are posted to the US to write things no one is interested in reading. We are all just simple people with very simple life’s. No more taxes.
It is wonderful to read articles like this that highlight the short comings of our government. I am glad the younger generation of Singaporeans today are more pro-active politically than my generation. It is a good sign and we must all continue to question policies that affect our lives. While the government may seem to be taking great pains to explain some of their policies, many of their explanations can be shot down easily. You can’t help but begin to doubt their true intentions. I think there is a lot of hidden agendas. The more transparent the government becomes, the easier it will be for them to convince their citizens of any changes. The more they try to hide, the more suspicious the citizens. Sincerity is wanting to help Singaporeans must come from the heart. When you pay people top dollars to do the same, it will never be as effective.
They need to be shot first
Coming GE, use your votes to effect a change, otherwise we will really wake up one day to find that our hard-earned savings are all gone..
Debacle at Temasek/GIC is because of lack of enough & credible opposition.
Let us have at least 30+ opposition in next parliament and stop this nonsense once and for all
We need multi-party parliamentary enquiry supported by top 4 accounting firms and couple of well known third party / neutral experts from investment banking as well as academia to investigate affairs at Temasek / GIC and prepare a full white paper for presentation to people of Singapore.
Hello, overseas Medisave is only allowed for “APPROVED” medical establishments determined by the MHA. Try using your Medisave for hospitals in Bangkok, China or even India-No Can Do.
It only sounds nice like wa, so good. Dream on. They specify certain medical facilities in Malaysia OWNED by Singapore Healthcare Groups only. So you may on paper save S$10-S$30 if you seek treatment in say JB, but duh, you wanna travel to JB when you are half dead and need that MC from going in to work?
EVERYTHING the MIW do is NOT for the genuine welfare of Singaporeans. They are only disguising their agenda to suck more money out without sounding the alarms. My vote is already “CAST”-for the opposition. I dun care who is the candidate. Even if Mandai zoo Ah Meng runs for opposition, I will vote for him. At least real peanuts costs less and I may even get a gratitude hug from him when I feed him.
Nonetheless, CEOs & MDs at both GIC & Temasek still made $Millions, don’t they?
Of course those $Millions dollars of wages went into their own pockets instead. And just in time for them to re-invest in properties in Singapore to ride the bull-run.
In USA, they have companies TOO BIG TO FAIL.
In Singapore, we have talents TOO INTELLIGENT TO FAIL.
That’s how the game goes.
When did it come Singaporeans’ hard-earned earnings.. I think many of the peasants here don’t even pay income taxes lol
Sorry hor… medishield cannot be used for overseas medical treatment, even for those “approved” hospitals and medical centres.
So this move by PAP at most benefit those already got pre-existing illness and cannot get medical insurance anymore.
Furthermore, as pointed out by Mar 5, 11:55am, those “approved” medical establishments are owned by Singapore companies, and are also not very cheap even if in M’sia or Indo’sia. They are the ‘atas’ brands; it’s like going to Mt Elizabeth or Raffles Hospital in singapore, except you pay in ringgit or rupiah.
It’s more of a win-win for PAP and the 2 Singapore companies. Pay less medishield claims, and the medical companies got more profits.
hm…the medisave scheme havent even start yet in M’sia and they lose 7B already? So power sia…
24% (?) for MINDEF and 4% for healthcare. I don’t understand this preference. 3% increase in medical bills for the rich and 10% for the poor. Why? It is time that we know the full facts and figures of our huge losses by T and GIC. Maybe with such disclosures, we can understand why the poor is discriminated.
i am feeling more and more disappointed by the performance of the leaders.
I think some accountability of our leaders is called for… otherwise mistakes are covered up or simply glossed over and no one can do anything about it..
My heart wept for the future of singapore if this continues….
What a scary thought - Almost $100 billions losses in ill-fated investments by both GIC
and Temasek, and utter silence from our PM Lee and no accountability so far.
Is PM Lee still our PM? We hope the losses are just an exaggeration, else we fear for our
CPF moneys.
Now we fear our own sovereign funds would repeat their recklessness once again as newspaper
reports reveal Prudential is approaching us for help to take over AIG. Would GIC
Ng Kok Song do another stupid UBS wayang again, and commit Singapore to another ill-fated investment which would take another ten years to recover.
investment.
the people seem to allow them to make mistakes. strange people.
Up till now, singaporeans still do not know whether their trapped life long cpf savings are still around or not. The nation reserve belonging to the people of singapore could have been just an empty shell by now, just imagine even the President is not allowed to know the truth. If this is not treason by the ruling party, then what else can you call it?
As long as there is no transparency, no accountability, to one is responsible at all, singaporeans now have to right to press for the truth before its too late. Just don’t want to see another Thaksin, Suharto or Marcos case happen here in Singapore but events seem to be like one.
i am already sicked in both physicaLLEE and financialLEE..
i still laned laned updates my medicsaves not by choice but by the deeds of parliament
whenever i goes for expensive outpatient..i pay upfront ca$h….
what the FART is leekuanyew and leehsiehloong is doing? both of them can placed mrs harry lee in a private 1st class room in general hospital without payin $1 single dollar @ all
till today mrs harry lee is still on treatment in the same private ward…
our future is in the hands of the majority. how wise have they been? wise they be wise?
http://www.youtube.com/watch?v=sGvStlnjfRE
damagedDNAs,
For goodness sake by nature mrs harry lee already dead,only the life support machine pumping her heart.Only that harry lee can’t accept the fact she gone and still get don’t know what kind of treatment at the taxpayers expense.It’s was like couple of years when SIA plane was converted to air-bulance to bring her back from London.
Dear Mr leong Sze Hian
After reading your article, i feel that u have not answered your question.
As a finance expert, u should know that investment can lose money. Can u swear that u never lose substantial money in your investments?
U can link the GIC losses with not enough money for education, not enough roads built, not enough subsides for old people, …….
Dear Mr Leng Sze Hian,
The title for your article is “How is allowing Medisave to be used overseas connected with GIC losing S$7.3 billion?” But you have scarcely touched on the answer to this question !
You tried to say that allowing Medisave to be used overseas may just be a short-term partial solution to the problem of rising healthcare costs in Singapore. You opined that rising healthcare costs is due to insufficient public spending on health. And you attempted to link those GIC losses to the inability or unwillingness to increase the health budget.
I think your theory is rather far-fetched and based on barrel-scrapping reasons.
Quite obviously, the health policy and the investment losses are not connected in any meaningful way.
losses of this magnitude is not accidental.
not learning from the losses is worse.
//ludwig
if lhl took care of medical cost, we’d have an easy time stomach the losses.
Quite obviously, the health policy and the investment losses are not connected in any meaningful way
on the contray..not if i have to pay a premium monthly ransomes on my medicsaves
and when i need it for my health treatment in which i do and openLEE declared.. i find it strange that i alway hav to be the poor peasants to pay ca$h upfront while my medicsaves figures keep on goin up in contribution$…
obviousLEE you newver been sick before? right?
when/if you or your family is sick..please come back to rebutt more…
for this i wished you WELL…no ILLFEELINGs @ all…
Maybe Ng Kok Song and Ho Ching think they are Singapore’s Warren Buffett !!!
Fine examples of career politicians.
“As a finance expert, u should know that investment can lose money. ” – ludwig
Ah but the investment lost was too big for endowment investment which it should be.
The Govt was not doing the endowment investment that they should be doing , they are speculating! The reason so much was lost was because they put all their eggs in one basket – 40% in financial market. They must have naively thought financial market could NEVER collapse. In any endowment investment, I would expect the investor to make a safe spread, balancing low and high risk investments. No way should a SAFE investment be 40% in any one sector.
This is not the normal endowment investment we are talking about
As a finance expert, u should know that investment can lose money. Can u swear that u never lose substantial money in your investments?
wow! so you also must be financial expert lark… if like that why should we pay and engaged your services? so basicalLEE you are teeachin us not to invest n bankins/insurances institutions right? just banked on cpf savins sured win win…no need to use our pillows as safebox right?
by the way ludwig..you should sticked to beermakin..you sound german yet you acted liked a romanian transvette….
There were many things PAP do not know and will not want Singaporeans to know. It is dangerous to let them continue to rule Singapore and ruin our lives and savings. I want an immediate election. A day delayed is very costly to many Singaporeans and this country.
PM Lee told BBC that MM Lee is the BEST person to manage GIC, in his mind he must be thinking his wife is talented so that we “only lost so little” in Temasek.
PAP for 50 years trumpet accountabilities, check and balances, separation of duty ( to avoid conflict of interest ), it is clear that The Lee’s are infallable, close to GOD, never make mistake, and they are right even the facts say otherwise.
Who gave them this unlimited power ? THE VOTERS !!!
I heard that people say, there is no alternative !
There is , if you retire 1/3 PAP MPs, the govt policies would be changed to pro-people, and they would recognize that we, voters give them their jobs and not the other ways wrong.
Sending good opposition members to Parliament is better than sending muted, yes men/women of PAP to Parliament. These PAP MP are puppets, only ONE PAP spoke against the immigrant policies, the rest of 50 PAP MP ( excludes office holders ) are all muted, sleeping puppets, why should w epay them $23,000 a month ?
RETIRE THEM !!!
Oh, no. Will the GST be raised to help the poor and needy again?
Maybe the ERP have to set higher to reduce the traffic?
Maybe sooner or later we will have the third IR up for bidding ?
COE? cigarette price going up again as smoking is bad for health?
Review of property tax on HDB flat?
@#$%%^%
It’s high time GIC & TH to be transparent and come clean!
We must make it happen!
ludwig Mar 5, 2010 16:57,
please wake up your idea! Personal investment is money belonging to a person.
SWF invests with people’s money.
I dare you to say you know all the losses.
come back here and reply me, ludwig.
I just got a big kick out of a comment elsewhere by another poster, and I paraphrase:
“For all that the Opposition is said to lack credibility, they haven’t lost a single cent of taxpayers’ money.”
absolute authority without accountability,
out of the world salary without justification and humility,
total freedom to decide what to control and what to let go (to market force).
where to find this best job in the whole wide world?
good govt try to make more money from external and share wealth by improving standard of living for its people.
mediocre govt can’t make money from external but at least do not strain its people further.
heartless govt milk and stress its own people internally but squander its national reserve to external entities.
it is time to wake up.
#LInbei
I bet you after election, all the ERP gantries along the KPE and links will definately be turned-ON, its already so obvious that those new gantries are there waiting for the go ahead from the white crooks. If they are booted out asap, be prepared to see more and more singaporeans committing suicide to come, this is real lives of people who are forced to the limit.
The GIC and Temasek Holdings investments and dealings are unfortunately mostly shrouded in secrecy.
If not for the media reports from overseas, Singaporeans would never even come to know of the massive losses incurred .
Like compulsive gamblers,both entities are betting each time impulsively in attempts to recoup the earlier losses.However,the more they try, the worse the situation becomes.
It’s real worry for us when it’s too late to know that our CPF money has long “evaporated” during those bad bets!
Not unless you still believe their excuse of “long term” investments….
//ludwig
//As a finance expert, u should know that investment can lose money. Can u swear that u never lose substantial money in your investments?//
My fren, if you think hard enough…
1. First of all, whose money in TH & GIC?
2. Second, the amount involved
3. Then, the objective of investment
4. Next, who is responsible for the wrong call? Ghost?
5. Last but not least, aren’t the CEO & MDs paid handsomely (should not be less than what our Ministers are getting) to take charge and perform? If they still make school boy mistakes like you and me do, then they are not worth the money. Their losses amounting to 100 Billions. In percentage term, many investors did better than them during the same period, and I am one of them.
The money lost in the investments is just one issue amongst many others that Singaporeans are not happy about with the current team at GIC & TH.