Tuesday, October 28, 2014

Negative Returns

The board of steel mining company London Mining, which suspended trading on AIM (as in AIM the London Stock Exchange Company, not the $2 outfit associated with Teo Ho Pin), decided to put the company into administration after "a lack of liquidity due to the dramatic fall in iron ore prices”, a victim of the double whammy of supply glut and softening of demand from China, the world's largest consumer.

When the company ceased trading on AIM on Friday 10 October 2014, its share price was valued at 4.17p.  In 2011 the shares traded at more than 400p.

In 2010 GIC (formerly Government of Singapore Investment Corporation) was a substantial shareholder in London Mining with 8,485,184 shares or 7.46% of the doomed stock. By 2014, GIC grew this to 9.26% before cutting back slightly to 9.23% in August 2014, and started to trim to 4.21 in October ("GIC Pvt Ltd cuts stake in London Mining to 4.21 pct"). When GIC finally exited London Mining on 10 October, there was a big hole in the balance sheet of about S$50 million by one conservative estimate. The monkey business is yet to be reported in our mainstream media, which chose to splash stories of the Colonel Sanders look-a-like clinking champagne glasses with the Queen of England.

It's a classic repeat of the Bank of America investment strategy, buy high sell low. Temasek Holdings lost US$1 billion in that one deal in 2Q 2009 (188.8 million BOA shares valued at US$13.7 each sold at an average US$8.67 per share).

In August 2014, Deputy Prime Minister and Minister for Finance Tharman Shanmugaratnam told parliament the GIC is not managing the Special Singapore Government Securities (SSGS) or Central Provident Fund (CPF) monies on their own, but a combined pool of Government funds. Since Hong Lim Park will be off limits for any public discussion of what that really means, we do understand Tharman also said, "GIC has achieved good long-term returns to date. But as investment markets are uncertain and volatile, GIC's returns over shorter periods could be low or even negative."

All we want to hear is what happens when GIC's returns are "low or even negative." And is that when the "Return Our CPF" chant is considered annoying enough to be a chargeable offence, while Yang Yin's "Come on, money, I love you!” is not.


  1. They better pray hard that the Great Recession does not return before the next GE. Given the recent stock market volatility, it is anyone's guess what will happen to the CPF.

  2. Good grief!! All these horrific losses, where is the accountability to us Singaporeans?

    1. Accountability to us singaporeans?

      How do you account for your vote every 4 years that will give you the lever to hold them accountable to you ? You have civic rights? You have unions speaking out for you? You have grassroots leaders who is citizen-centric and not party-centric? You have student leaders who can advocate freely on campus? You have platforms to protest openly without being charged with silly abusive laws? You have transparency in your pension funds? Which part of the state of organs do you have as a citizen at your disposal that you can trust that is working in your interest? What do you have exactly?

      Singaporeans are nothing but disposable chips worse than their HK, Taiwan, Malaysian and Thai counterparts. And majority are still sleep walking and talking through their ass.

    2. As Dr Chee Soon Juan said "The only difference between Hong Kong and Singapore, is that “while Hong Kongers have retained their fundamental freedoms of speech, assembly and association and a free media, Singaporeans enjoy none of these.”

      No wonder SIN is so 'peaceful' and the 'silent majority' is so silent lah..

      Unless you are like the super-rich elites who have the means to fight each other with queens counsel and overbilling invoices, why do ordinary salaried people find the time and resources to correct the subversive faulty laws? When you hire someone who can sukar sukar technically circumvent the law in their favor because of their card carrying status, so much for 'working from within' lah. Whether you dog lover or hoarder lover, once you're enrolled into inner circle, simi law also can bend for you. Why bother with rule of law when you can rule by law, tiok bo? Is called the Law of Least Resistance lah.

  3. Those with an MBA will know that if you are the CEO of any public company and loses 1 million of your company funds without good reasons, the exit door will be shown to you even if you cry your heart out for your daddy or mommy. That is the basics we are taught at Management School.

    But here we have one CEO who lost 1 billion of our taxpayer monies just like playing some poker games at our Genting and yet no MP with the right conscience dared to question her just because she had a hubby to cry out for.

    Is it because our MPs have already been silenced with our dollar bills to shut up their mouths for good ? Or is it another form of indirect leegalised corruption Singapore style ?

    Just think which is a bigger crime, the one that lost billions of our monies until we can't withdraw our CPF savings at 55 or the one who was making some noise at the Speaker's Corner ?

    Do we even have any sense of proportion of the crimes committed by those in charge ?

  4. It is leegalised crime btw...anyway who cares...everyone dies in the end...so much money also won't stop death from claiming one in the end...lol....foolish self serving short term sighted mortals...with idiots like these in charge...no wonder humanity will become extinct soon enough. So what if your future generations got so much money..can all that money save them and earth in the end...don't think so...can only drag out their suffering in the end.


  5. It is crucial for citizens to scrutinise the investment decisions of the GIC and Temasek like you and others have. However, I feel that you miss the real point, glossed over as usual by Tharman. When he told Parliament recently, in answer to Low Kia Thiang, that the reason for co-mingling CPF funds with other monies was that CPF funds alone were insufficiently large to be invested separately. That answer drew LKT's incredulous response - you mean $300 million is not big enough? Psychologists who studied the actions of investment officers' apparent wild gambles during the last financial crisis point out the dangers of leaving them with too much money invest. The expectation that they have to make profits from them inevitably lead them to take unnecessary risks. It is time to for the government to return a large chunk of the reserves to the people so that the GIC and Temasek can no longer blow them away in such adventures that you and others reveal.

    1. It is not $300 million, but $300 BILLION. Not large enough to be invested separately? Shake head. The problem with investment managers is that the funds they manage are other people's money, not their own. This means that they can play masak masak or tikam tikam with the money without any risk to themselves while earning their fees and big bonuses when their gambles pay off.


  6. Would not conclude that Sin WILL NOT follow similar developments elsewhere. Globalization is a double edge sword, it can result in modernization and it can cause instability.

    What's happening in Middle East and the Regimes there and the Fates of Hosni Murbarak, Saddam Hussein and Gadaffi may happen here.

    There is also the Possibility of natural disaster as is happening in Ebola.

    Pray hard.

    1. Yeah, they really preyed hard for our money.

      Happens like Middle East? Never will lah. There's no precious oil or minerals for them to strip and steal. Just a piece of rock that is strategically placed here in asia. The only asset is the beguiling and compliant citizens who 'see no evil, speak no evil, hear no evil', and all kinds of laundering can be business as usual meh.