Friday, July 8, 2011

Temasek Revelations

Source: Print ad in Straits Times, Friday 8 July 2011
 Singaporeans were allowed a rare peek at how Temasek was doing with the monopoly money today. Analysts like APS Asset Management generally agree that the rates of return achieved were "respectable", but not "particularly impressive". Said one, "It's not a figure you can be jubilant about." Or use to justify the salary increases over the years for the 400 staff, which used to be 92% Singaporean (2004), currently reduced to 66% (2011).

The total returns to shareholder was merely 4.6%, after dumping US$3.6 billion of shares in Bank of China and China Construction Bank (not included for the net profit computation). Temasek MD Nagi Hamiyeh said the divestment was part of the portfolio rebalancing, while reiterating in the same breath, "We are bullish on China in the long term." Why sell if the future looks promising? Another buy high, sell low stratagem like the Bank of America "divestment" in 2Q 2009? Temasek lost US$1 billion in that one deal (188.8 million BOA shares valued at US$13.7 each sold at an average US$8.67 per share).

The bragging rights seem to be about the Temasek portfolio hitting a record $193 billion. But where, may we ask, is the source of funds for the shopping spree?

According to the CIA Factbook release in 2010, Singapore has the 8th highest public debt to GDP ratio in the world after bankrupt states Zimbabwe (1st) and Greece (5th):
The CIA Factbook also notes "Singapore public debt consists largely of Singapore Government Securities (SGS) issued to assist the Central Provident Fund (CPF), which administers Singapore's defined contribution pension fund; special issues of SGS are held by the CPF, and are non-tradeable; the government has not borrowed to finance deficit expenditures since the 1980s." That's our CPF in the quote.

With the kind of lacklustre performance from Temasek, one can see why they are reluctant pay more than 2.5% on our CPF funds. But there's nothing to stop the powers on high to keep increasing the quantum of minimum sum frozen in the CPF accounts (just "revised" to $131,000 on 1 July), money which may generate better returns in the hands of more financial savvy fund managers. The CPF board says that the minimum sum revisions are to ensure that Singaporeans have sufficient savings to meet their healthcare expenses, nothing is mentioned about adding to the pool of play money for the Temasek guys.
Prettier picture in Temasek Review 2011 Annual Report


  1. When they lost billions of our money, Our MSM truly deserves a pulitzer prize for painting rosy pictures of our home-gown SWF performance, when they were merely recouping what was lost in previous years - by no less selling off some key Assets and Bank shares so she can "stay" on a high note?
    Looking at the number what's there to crow about? Esp when you know SIA owns 33% & Temasek 17.5% of Tiger Airways. That amounts to $1.5m loss/day of non-operation for next 30days till Aug. And Tiger stock has shaved off 16% since grounded and not forgetting they lost $7m last yr...oh boy, they're selling one hand to do a hatchet job on the other bleeding end...and not a word on MSM!!! Incredible huh?
    SPH under Shaun Seow is old news making new news. He should sit on pulitzer committee board instead.

  2. Btw, CPF is lowering the interest payments for the Medisave, Special Account and Retirement Account portions of our CPF from 1st Jan 2012 onwards. The above 3 accounts are currently paid a minimum of 4% interest. But from next year, it will be tweaked to be around 3.3% to 3.4% only.

    This is yet another stealth theft of our CPF money, in addition to the relentless yearly increase in the Minimum Sum, the Medisave Minimum Sum, and the shifting goal posts of increasing draw-down age.

    What to do? Sinkies has a chance of real change in 2011. But most daft sheep Sinkies threw away that chance. Can only repent for next 5 years. We deserve what we get.


    Funny or ironic isn't it. WE as stakeholders of our country's reserves can't even get a detailed breakdown and accurate reading of our hard earned moneys from our local press or directors, but must scan our old contacts or ww news in order to get to the truth..what does it tell you about our sorry state of media affairs?

    So our corporate raiders continue to pay themselves handsomely in bonuses/high pay for so little returns, why do we bother to let them go scot-free with a lame & insider job president?

  4. Can we asked President Nathan to brief us on the results. What are his views and comments before we release his salary or bonus

  5. So, am I right to surmise that the "cost" of borrowing for Temasek (ie. for using our CPF) is a constant, unchanging maximum 4% (to be lowered to 3.4% from 1 Jan 2012). Could someone enlighten where else on this earth a commercial entity could borrow money for decades and the interest rate does not fluctuate, especially upwards?

  6. Are you guys performing better than Temasek?

  7. Temasek seeks more deals in China, citing ‘bullish’ outlook. Next thing you know, six months later China starts to crash like 2008 and the whole thing repeats again.

  8. Yes, I am definitely doing better than the measly 2.5% they're paying on my CPf a/c which I can't lay my hands on. Plus if I sell the only HDB flat I have, I'll also be millionaire but I'll have to think which beach I can set up my sleeping tent so I can live debtfree for life.

  9. BigBrotherWatching7/08/2011 2:38 PM

    So Ms Ho Jinx & PM Lee were both in Sun Valley pow-wowing among media moguls and investors who are cream de la cream of digital social media.
    Since they were pretty badly crucified on the new media in 2011, anyone wanna bet they're ready to throw some of our serious money to "buy/own" some of these outfit for future machinery use, kee chiu?!

    Soon, we will have our leegime hovering all over us in that space too.

  10. I live debtfree... paid off my flat and my car. C'mon ask yourself sometime, upgrade a car every three years? must stay in a 99 year condo?

    GO stay abroad for ten years in several countries and compare. You may want to return home to Singapore. If you found somewhere, tell me.

  11. To anon 2:38, maybe they shopping for their son...he used to work4 a certain do-no-evil-social-media-co....the son also rises next?

  12. How do you know i haven't lived abroad How do you know I want to return to Sg? And Why must i tell you? daft..

  13. Entirely up to you, fellow Singaporean. :)

  14. One thing which PAP can't deny is that we have all along been treated as suckers. Our hard earned CPF earnings are for them to gamble, they share the profits while we bear the risks.

  15. Maybe they could buy Warren Buffet company shares, and there is no need of TH/GIC. Why so trouble some and just let Warren Buffet take care of the funds. Maybe should have been 40 years ago or whatever lah.


  16. To anon July 8, 2011 2:41 PM, which part of overseas you have spent your 10 years? You probably have not stayed long enough in any country or have not stayed in many countries to compare. I now live overseas in a bungalow with swimming pool and own 2 cars. I pay one third of the price for the same model of the car. You may say all these stuff are materials. Have you visited any shopping mall that carpark is absolutely free or at nominal parking fee? Have you visited a real public library that is quite, well organised and helpful? I have travelled for my past 40 years career and finally choose to stay here - where? I will not tell you. Go and find out yourself. If you have not travelled enough, Singapore appears a very good place to stay. But, there is much better place to live on this earth. Again, your choice is only your preference.

  17. To anon 8:12pm , LIKE!
    Some pple may hv lived abroad but just can't adjust themselves and kept going back to the frog's well and live in temperature rising boiling water.

    If pple will just think about it. What business does a country's PM have to do with the investors in Sun Valley? Do you see korea or HKG or european countries chief leader go find out abt new inventions and ideas and see how they can 'profit or benefit from it'? Even if he is there as GIC head along with his SWF CEO wife, again, think our entire nation's well-being and interests are rested on these one ruling couple?!?? Does it sound right or scary? The power of our reserves rest in this Lee & Ho's hands, with no transparency and accountability. And here we are worry about the micro details like our survival in the pigeonhole and some sleepness nights by a Minister!! Fix the leaking pail before you worry about how much water to pour into the bucket..

  18. Tattler
    Temasek just published their 2011 annual report on website.
    Their slide 2 chart for year in review over 5/10yrs look rather different from yours leh...

  19. Hey Anon@July 8, 2011 2:41 PM, I have been living overseas for a decade now. I live in a house with a sea view but didn't have to pay $30 million for it. Only a tiny tiny tiny little fraction of it. Oh, it's also freehold because not much here are 99-year leasehold. Why, because the government doesn't control all the land here and make you pay thru the nose for a pigeon-hole. I drive a 15-year old car which cost me $3,000. Why? Because I have a choice and the government here doesn't insist that a car becomes a polluter once it hits the magical 10-year mark. And cars are depreciating assets to give one mobility to get from point A to point B, so I don't see the need to pay a 6-figure sum for a vehicle. My family & I get free healthcare here, my children get free education (without the need for tuition), and public service is just that - public service. Sure, I pay higher taxes here but so do Singaporeans - only many of you do not realise the "unseen" taxes that you pay everyday! PS - I'm also debt-free.

  20. haha the chart above with over 1 year performance line says it all.
    She's really just recouping the losses..and she made a song and dance about it! Just say lah. Thanx for the entertainment.