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”.
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