By Goh Chin Lian
These products include Lehman Minibonds and Merrill Lynch
Jubilee Series 3.
Senior Minister of State (National Development and Education)
Grace Fu gave this update in Parliament on Monday, in response to a
question from Nominated MP Eunice Olsen.
Since Dec 1 last year, the amount that town councils can invest
in non-government stocks, funds or securities has been capped at 35
per cent of the sinking fund.
Holland-Bukit Panjang invested about 6.7 per cent of its total
funds available for investment in the structured products, and
Pasir Ris-Punggol, about 2.6 per cent.
The sinking funds are used to pay for long-term or cyclical
expenditure, such as replacing lifts, pumps and pipes, re-roofing,
and repairing and redecorating blocks.
The funds are also used to pay for lift upgrading, so that
residents pay a smaller percentage of the total lift upgrading
cost.
The sinking fund is distinct from the operating fund, which is
used for short term expenditures.
Ms Fu said town councils need to invest their funds prudently so
that the accumulated funds are not eroded by inflation.
The investment guidelines - which her ministry has no plans to
change - seek to achieve an optimal balance between reasonable
returns and financial prudence, she added.
She noted that investments in stocks, funds or securities must
be on the advice of a qualified person, such as an investment
adviser holding a licence under the Securities and Futures Act, and
an approved bank or a merchant bank approved as a financial
institution under the Monetary Authority of Singapore Act.
The 16 town councils manage more than $1 billion in sinking
funds.
