"In Hougang, let us keep Mr Low Thia Khiang on his toes. He is responsible for running the Hougang Town council. ........... I suggest you study the annual accounts of the town council to ensure that the funds are properly used. Check whether the arrears for S & C charges are piling up, and eating into their reserves. Make sure that enough money is put aside for cyclical maintenance. In your walkabouts, check on the estate maintenance. If Mr Low has done a good job, give him credit for it. If there are deficiencies, point them out to the residents. In short, play the role of an effective opposition in Hougang. " - SM Goh Jul 2008 HOUGANG COMMUNITY CLUB
$12M in structured products? Who cares? I would be more concerned if they refused to tell us the actual amount and leave us guessing. I'm just a bit surprised that $12M = 0.6% of the total investible reserves. Only 40% of their reserve can be invested. On the back of envelop calculation tells us they accumulated $5B in reserves for estate maintenance. This is crazy! To build a reserve of this size, they have unnecessarily burdened Singaporeans with conservancy charges which could have been lowered. This explains why I did see any rats and roaches in Hougang although MP Low has not increased conservancy fees for decades. Anyway $12M lost is nothing in the scheme of things....why?
In October alone, Temasek lost S$16.4B counting only stocks it owns on the SGX which are mostly Singapore blue chips. We have also heard the unfortunate news of ABC Learning in which Temasek lost US$400M to a CEO who was a former milkman turned CEO turned party animal. ...he sure didn't forget how to milk his shareholders. ABC Learning is now insolvent - I hope Temasek did some learning in this sorry episode. The full tally of Temasek's losses perhaps will never be know to the citizens of Singapore. But if you have been reading my blog these salient questions remain:
1. According to the PAP govt, one of the reasons for holding so much reserves is to safeguard Singapore during the period of crisis. Why then does Temasek Holdings invest in so many risky assets whose value will fall during crisis?
2. Why still no transparency? If transparency is hard during the better times, it is harder during the bad times when there are losses. Citizens to which the reserves belong don't know what is going on. Have you ever own something you don't understand? ...Minibonds? Troubling isn't it.
3. How much is enough? Don't forget the these reserves are the sweat and blood of the people. It is the people who paid for the service rendered by the state own monopolies etc that allowed the reserves to be built up. It cannot be "the more the merrier" because it translates to hardship for the people. Big reserves are not a happy situation when the people are struggling. Singapore has enormous reserves without a corresponding social safety net for the people.
My personal belief is that it is almost never wrong to return money to the people. If you look at USA what got them into trouble is irresponsible banks and defense spending. It is not welfare spending that got them into trouble. What is not spent on the people ends up being wasted anyway by the govt. With a lot of money lying around and people well paid to think of what to do with it, you can only end up with either investment losses or waste. It is the nature of things that the only way govts can handle large amounts of money well is to have complete transparency. ...otherwise you have competent people doing stupid things simply because they are hired to do something with the money which sometimes is best left idle in govt bonds and gold. Just look at the town council....a lot of money lying around + smart alec = losses in minibonds. All of which could have been prevented if there was total transparency.......
If the town councils are bad, what do you think happens in our secretive GIC and Temasek Holdings....
SINGAPORE, Nov 4 — Last month's market upheaval swept away S$16.4 billion (RM40 billion) in market value from Temasek Holdings’ portfolio of major investments in Singapore-listed companies alone. Calculations, based on the shrunken market capitalisation of 12 companies Temasek has a significant stake in, show that the value of its investments fell 25.7 per cent between Sept 30 and Oct 31. Compared to the beginning of the year, the drop is 45.7 per cent, or S$40 billion. Singapore’s stock market capitalisation plunged S$123.5 billion in the month of October. Temasek saw a huge chunk of market value destroyed — on paper — from its 55 per cent stake in SingTel, which translated into S$7.1 billion getting sliced off its portfolio's value in the month of October. The value of its SingTel stake fell S$13.7 billion from Dec 31, 2007. Its 29 per cent core interest in DBS Group meant that the bank contributed the second largest cut in value to Temasek's Singapore portfolio — S$2.4 billion over the course of last month. DBS had borne the brunt of the sell-off among the three local banking stocks in October, losing 34 per cent of its market cap. Temasek's 54 per cent share in Singapore Airlines' market cap dipped S$2 billion in the month of October, and S$4 billion this year so far. Its other transportation and logistics investments saw market value shrink too. Temasek's stake in SMRT Corporation meant a loss in market value of S$360 million, while the value of its interest in Neptune Orient Lines fell by S$563 million. Market cap fell for the three infrastructure, industrial and engineering stocks with Temasek interest too. Temasek's share of ST Engineering, Sembcorp Industries and Keppel Corporation's market value losses last month came to S$584 million, S$726 million and S$1.1 billion respectively. Technology stocks Chartered Semiconductor Manufacturing and STATS ChipPAC meant value cuts for Temasek of S$232 million and S$776 million respectively in October too. Its comparatively smaller 15 per cent stake in Fraser and Neave still led to a loss in value of S$171 million last month. CapitaLand was not hit as badly in October, so Temasek's 40 per cent interest in it led to a loss of S$237 million, though for the year so far, the property developer has taken S$3.8 billion off Temasek's portfolio. Geographically, Singapore accounts for about a third of Temasek's net portfolio value. It maintains a 12 per cent portfolio exposure to Asean countries, 22 per cent to North Asia, 23 per cent to the OECD economies, and a 7 per cent exposure to emerging South Asian economies such as India and Pakistan