The other amazing thing that happened after $50B loss of taxpayer's money is our finance minister stepping forward to explain there is nothing wrong with these losses because Temasek had made gains of $100+B if one measures its gains from the 2003 trough to the 2007 peak. Tharman explained that the annualised gains are 15% compared with the 6% gain in the MSCI Global Index. Tharman had chosen 2003 instead of, say, 1999 as the starting point because that was the market bottom and the absolute returns would be larger than if he had chosen another starting point. It is not clear why he has chosen to compare with the MSCI Global Index when a large part of Temasek's portforlio is in Singapore and the STI gained 16% in the same period. It is also not clear how profits Temasek booked from the sale of strategy assets that are not listed on the market such as the 3 power stations that were sold to the Chinese, Malaysians and Japanese for a total of $12B (They explained that the purpose of the sale was to create competition - but you really have to wonder how that can happen when each party now owns a portion of the total capacity ...what incentive is there compete when they have unable generate for any significant gain in market share?). It is indeed surprising for me to see an elected representative who is supposed to serve Singapore citizens trying to defend Temasek by using an arbitrary measure of performance. The correct way to measure Temasek's performance is to look at its return from active management vs the returns from passive holdings. The value add of the 350 people hired by Temasek is in the deals it actively cuts and the decisions its managers make. So far the outcome from many of these major deals don't seem to be good.... Much of the returns from its passive holdings in Singapore Blue chips requires little management and decision making....are achieved just by holding on to profitable GLCs.
The attempt to spin away Temasek's losses leaves much to be desired. Every explanation just leaves more unanswered questions. It is time for elected officials to take stock and make a genuine effort to ensure that the massive losses we have seen do not recur in the future. They either do that or we have to elect the people who will do the right thing in the next elections.