GIC’s returns aren’t so bad after all?

I refer to the article “GIC posts steady real returns of 3.7% amid uncertainty” (Straits Times, Jul 10)

It states that “GIC’s 20-year annualised real rate of return – its most important benchmark – was 3.7 per cent (5.1 per cent nominal) for the year ended March 31, down from the previous year’s 4 per cent, it noted in its latest annual review.”

Actually, the GIC’s performance may not be very much worse than other better known and large sovereign wealth funds (time periods vary as the following is the latest data that I can find).

For example, the Abu Dhabi Investment Authority fund’s 20-year annual rate of return was 6.5 percent at the end of 2015, and a 30-year annualized return of 7.5 per cent.

The Norwegian fund generated an annual return of 5.8 percent between 1 January 1998 and the end of the first quarter of 2017. After management costs and inflation, the annual return was 3.9 percent.

According to the article “Many unhappy returns” (The Economist, Nov 21, 2015).

Median pension fund return – 8.5%?

– “Over the past five years the median pension fund has earned an annualised return of 9.5% (in USD terms); over the past 25 years, the return has been 8.5%”.

GIC 20 years’ return – 6.1%?

According to the GIC’s 2014/2015 Report – “In nominal USD terms, the portfolio generated an annualised return of 6.1% over the 20 years ended 31 March 2015.

GIC’s 20-year nominal return was 6.1% per annum in USD terms, while that of the Reference Portfolio was 6.9%”.

Some questions may still be left unanswered:

S$ return from inception?

What is the GIC’s nominal and real returns from inception in S$ and US$?

Comment: This would tell us how much is the excess returns kept by the Government from the interest rates paid on our CPF funds.

Why selective disclosure of S$ returns?

Why is it that the nominal and real returns for 20, 10 and 5 years are only given in US$ and not S$?

Has the 20-year return improved?

Since it was disclosed (2014) that the 20-year return in S$ was 5.2 per cent – has this figure improved for the current 20-year reporting period of the report?

Any other national pension does this?

Comment: Are there any national pension funds or sovereign wealth funds that do not also report their returns in the countries’ own currency?

The real returns in S$ (last reported in 2014) which has been given and in the past are for selective periods only. Why is this so?

No transparency and accountability?

Comment: Why do we still  not have transparency and accountability for our CPF?

CPF members and taxpayers bear the risk?

Finally,  the repetitious argument that the historical lowest real returns in the world of all national pension funds, is fair because the Government guarantees the returns, is nonsensical as no country does this, and the people are bearing the risk of the CPF returns being so much lower than the actual returns.

Govt bears no risk, but keeps huge returns?

In other words, the Government bears no risk, but keeps the  bulk of the excess returns, which belong to CPF members.

 

Leong Sze Hian

 

 

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27 Responses to “GIC’s returns aren’t so bad after all?”

  • Amos humiliate L*L and PAP:

    Mr Leong asks a lot of questions on a lot of things. By now he should know he will never get the answer as long as PAP is in power. PAP is deliberately “opaque” so it can easily cheat and/or mislead Singaporeans. Moreover, without openness and transparency, PAP knows it cannot be held accountable for anything.

    The ONLY way to get answers is REGIME CHANGE. Throw PAP out of Parliament at the next GE – the only way.

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  • Amos humiliate L*L and PAP:

    Is the GIC’s real return of 3.7% gross or net, i.e., is it before or after expenses? This is important because GIC pays its staff mostly foreigners very, very high salaries in the 99% percentile (or its salaries are in the top 1%) worldwide.

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  • Same For Our Nation Reserves!:

    Who can verify the figures?

    Late President Ong Teng Cheong tried, but he did not get any answers!

    Can we appoint an Independent Commission to verify the figures after each Presidential Election so that Mr/Madam President can answer to Singaporeans?

    If not, the KPI of the Elected President will never be met.

    Did Tony get the answer for us; he already finishing his term!

    You know I know right?

    Let’s not bluff ourselves anymore!

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  • How To Protect Our Reserves?:

    If from the onset, he/she do not know the value of our Nation reserves, what is there to guard?

    It is one of the KPIs of the Elected President, if he is not given the figures, how do you expect he/she to do a proper job?

    You expect he/she to guard our Nation Reserves when he/she do not know what he/she is guarding?

    This must be the greatest joke in the World!

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  • Stop the 'Whitewash' Now!:

    Let’s BE REAL, no more wishy washy stuff please!

    L*Y’s era is over!

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  • oxygen:

    IT WAS A LOUSY PERFORMANCE – the global economy was better in 2016 and stocks would be ordinarily expected to do much better than achieved of funds performance at Temasek & GIC. Going into 2017 Financial Year, both Temasek and GIC warned of treacherous road bumps ahead.

    http://www.msn.com/en-sg/money/news/sovereign-wealth-fund-gic-warns-investors-arent-fearful-enough/ar-BBE64tt?li=BBr8Cnr

    and

    http://www.cnbc.com/2017/07/11/singapore-investor-temasek-market-valuations-are-stretched.html

    The gains in the last Financial Year at Temasek & GIC could all be wiped out and more as price over earnings multiples would shrink as equities valuation adjusts downwards.

    Both Temasek & GIC took some profits off the table in the last FY, what could be left is decaying stocks vulnerable to big losses if economy/financial market turns sour as rising interest rate takes hold of QE unwinding shocks warned by J.P. Morgan chase.

    http://www.marketwatch.com/story/jamie-dimon-says-qe-unwind-could-catch-investors-by-surprise-2017-07-11

    There could be a big surprise on the downside in this current financial year.

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  • rukidding:

    when the real Brexit gets into action and when Donald is being impeached,…..all the “long term assets” becomes “non performers”.

    Ownself “masturbate” own self now,….otherwise later got “no bullets and can only fire blanks” !

    and the show……goes on for another round !

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  • Gic scums:

    No matter how well or how poorly the investments do , the GIC team are all paid in the millions…plus huge bonuses. Wth.
    Do they really deserve it?..after losing peasants retirement funds …then keep pushing the draw down age farther n farther.
    We suffer but they are singing n laughing all the way to their banks.
    Scums of sg…

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  • Compulsory Pyramid Fund:

    What can you do when 70% are dreamily contented with 2.5%?
    Only when they are old, then they kpkb cpf no money. When young, they happy with 2.5%.

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  • LIONS:

    aw alright,maybe they are PAYING AND PAYING ‘themselves’ too much ‘MANAGEMENT FEE$’ and that is eating a ‘YUGE’ CHUNK OF THE PROFITS???

    MAYBE WE CAN RECOMMEND CUT COSTS OF MANAGEMENT to improve BOTTOM-LINE??

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  • Rabble-rouser:

    It is not GIC’s long-term return profile nor is it the ongoing performance but rather when is the CPF going to return my retirement funds in full before most of us baby boomer’s die off. And that is the MONEY question!
    The present withholding of retirement sums from CPF balances & Medisave balances is a sick joke! The pure reason why PAP refused to release those amounts (our CPF savings) to us is because Tummysick & GIC [Generally Incompetent Clowns] have lost huge amounts of money trading in the stockmarkets & investing in emerging markets like China, India, Indonesia & Thailand (remember Shin Corp). Long & short is that CPF monies are already lost by those SWF clowns headed none other than the hapless HC.
    PAP can’t even do 2 things right;
    1. Can’t grow & expand businesses. Look at present GLCs – SPH, SMRT, SIA , etc. NOL already lost! A lot of CPF monies are trapped in GLC structures.
    2. Can’t even profit from trading financial assets. SWFs a joke – look at the amounts lost investing in shares by Tummysick & GIC. In addition, there’s a lot of ZOMBIE shares within their portfolio.
    In a gist, the problem is cash-flow related. All the cash is either chewed up within the system (GLC indebtedness) or trapped within the SWFs (dead stocks/poor liquidity investments/huge capitalized losses on share sales). They are PONZI scheme operators who can quote you a believable rate of return for your money but when you can’t withdraw the beautiful sums printed on your fund statement – it means that you’re screwed!
    Liquidity or cash flow has dried up leaving just arbitrary numbers which is meaningless. Don’t be fooled by returns – cash flow & real money in your hands is what that matters. Looking at the numbers in your CPF statement doesn’t give one any real hope! For all you know, the money’s gone!

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  • Sinkies Deserve It:

    Sinkies are not my brothers or sisters! Why ask so many questions?

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  • Why Sudden Announcement?:

    Trying to divert Singaporeans’ attention?

    Not so many DAFTS remaining, after the Lee Family Saga!

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  • PATRIOT of TEMESAK:

    Rabble-rouser:
    It is not GIC’s long-term return profile nor is it the ongoing performance but rather when is the CPF going to return my retirement funds in full before most of us baby boomer’s die off. And that is the MONEY question!
    The present withholding of retirement sums from CPF balances & Medisave balances is a sick joke! The pure reason why PAP refused to release those amounts (our CPF savings) to us is because Tummysick & GIC [Generally Incompetent Clowns] have lost huge amounts of money trading in the stockmarkets & investing in emerging markets like China, India, Indonesia & Thailand (remember Shin Corp). Long & short is that CPF monies are already lost by those SWF clowns headed none other than the hapless HC.
    PAP can’t even do 2 things right;
    1. Can’t grow & expand businesses. Look at present GLCs – SPH, SMRT, SIA , etc. NOL already lost! A lot of CPF monies are trapped in GLC structures.
    2. Can’t even profit from trading financial assets. SWFs a joke – look at the amounts lost investing in shares by Tummysick & GIC. In addition, there’s a lot of ZOMBIE shares within their portfolio.
    In a gist, the problem is cash-flow related. All the cash is either chewed up within the system (GLC indebtedness) or trapped within the SWFs (dead stocks/poor liquidity investments/huge capitalized losses on share sales). They are PONZI scheme operators who can quote you a believable rate of return for your money but when you can’t withdraw the beautiful sums printed on your fund statement – it means that you’re screwed!
    Liquidity or cash flow has dried up leaving just arbitrary numbers which is meaningless. Don’t be fooled by returns – cash flow & real money in your hands is what that matters. Looking at the numbers in your CPF statement doesn’t give one any real hope! For all you know, the money’s gone!

    GIC is NOT transparent….whatever figures GIVEN cannot be “VERIFIED”…..ask The Vatican or Veritas….LKY once said that for a Church that can withstand Two Thousand years of Turbulence through History there MUST be something about them that must be RIGHT!!!

    and… he is NOT talking religiously until DEATH came a KNOCKING and he started calling for Jesus to relief him from the NIGHTLY Demonic attacks!!!

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  • Bobo:

    Amos humiliate L*L and PAP:
    Is the GIC’s real return of 3.7% gross or net, i.e., is it before or after expenses? This is important because GIC pays its staff mostly foreigners very, very high salaries in the 99% percentile (or its salaries are in the top 1%) worldwide.

    Why is GIC employing more foreigners than Singaporeans? Majority are from Malaysia, next in the list is the Philippines and India. Recently more PRC youngsters have joined the pool. They also brought with them wife, children and parents. They are the new batch of Singapore citizens taking over the wave of office job. Singapore will be a branch of China soon.

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  • PAP is Pro-Alien Party:

    Bobo: Why is GIC employing more foreigners than Singaporeans? Majority are from Malaysia, next in the list is the Philippines and India. Recently more PRC youngsters have joined the pool. They also brought with them wife, children and parents. They are the new batch of Singapore citizens taking over the wave of office job. Singapore will be a branch of China soon.

    GIC hiring foreigners started in the late 1980s (Stock Market Crash in 1987) and accelerated during the Asian Financial crisis in the late 90′s. LKY was then GIC Chairman. The market meltdown saw many experienced fund managers in US and Europe lose their jobs. GIC Chairman LKY decided it is much cheaper and quicker to just hire experienced fund managers from overseas than to train Singaporeans. To get the “best” GIC decided to pay “top dollar” for experience. So its salary structure was set at 99 percentile (pay is in the top 1% of the market). GIC also prefers to have foreigners because they are less likely to make public GIC’s losses.

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  • Neo:

    Since when we get any answers? The 70 agreed it is NOT IN THEIR INTEREST TO KNOW.

    So 别问。

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  • millennial:

    In a sea of deformed markets with Ponzis and Zombies, may top rated investors with credibilities and solid performances. These People have their skins in the games. They are not even talking about what should be risk adjusted return. Risk adjusted return is a myth. If they do anything, it is to trade volatile fund flows. Trading is not investment.

    Real returns are not risk adjusted returns. Real returns account for inflation. Inflation is an oxymoron in a controlled economy where prices are imposed through rent seeking and not discovered through free markets.

    The SWFs actually do not need even to disclose anything when their coffers will continue to be filled by mandatory contributions, etc. The 70% cult worshippers will accept any smoke. This nation is defined by the 70%,

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  • Rabble-rouser:

    PATRIOT of TEMESAK: GIC is NOT transparent….whatever figures GIVEN cannot be “VERIFIED”

    Not exactly true! There will be counterparty reporting or mandatory shareholders announcement in foreign stockmarkets. It’s just S’pore MSM may decide not to make such announcements or reporting in S’pore. The rise of the Internet have made such concealment harder to hide with the S’pore MSM.
    In mature stockmarkets, significant shareholders position have to be made public information re: Paladin Energy – denial in S’pore Parliament but yet the ASX shareholding roll show Temasek’s equity holding in Paladin Energy.
    Any changes in significant shareholding position must be made public via stockmarket announcement eg. UBS sale of share by GIC recently. They couldn’t hide the announcement – broadcast on financial news like on Bloomberg, Reuters, CNBC, etc.
    Any delisting or company defaults in stockmarket listing re: NZ airline, Ansett default where SIA held a substantial stake; ABC Learning Centres where Temasek held a substantial stake after it collapsed! Again, this can’t be hidden.
    Noticed how Roy Ngerng made the Powers-to-be squirm in their seats when his detailed investigation into CPF & various shennanigans were made to the public via his blog, HEARTTRUTHS. He had to be silenced. Look at the different treatment meted out to Roy & to PM LHL’s own siblings. How come PM LHL didn’t sue his siblings for essentially defamatory statements? Roy, on the other hand, wrote the truth but had paid the price. He ended up being a Martyr after the recent UBS loss debacle which had proved his point. He is now forgotten! Methinks Philip Ang is doing a reasonable job digging up the dirt on Tummysick & those Generally Incompetent Clowns otherwise known as GIC. How long can one hide?
    Anyone with a forensic/investigative mind can ‘dig’ up all the dirt one needs to prove a point & to reconstruct the accounts & do a proper balance sheet. It’s just very tedious work & frankly, there’s no money in doing such work! Unless you’re Muddy Waters or some short-seller who might find value in obtaining such information to put up a short-sell position.
    Remember Chip Goodyear – he was supposed to be Tummysick’s new CEO but was ushered out even before he could assume the seat. There were simply too much skeletons in the closet! Go figure!

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  • Dekit NSR:

    LSH is good at what he does. Asking the right question where ordinary me would not be in the know. Not being in the know is also taken to be not being in understanding.

    But like sheeps let to the slaughter, we would not know it’s the slaughter house we are in until the knife goes to work. That is clear. So to the LSHs out there, thanks.

    It is however a question of why these has to be addressed.

    The feed element is the National Reserves (be it CPF or gold held) in coffee shop parlance and is being channel to the TH & GIC.

    It all good to tell you how these channels performs. The question begs
    - drawout from the national reserves to these funds
    - returns to the reserves by these funds.

    The stewards of these funds enjoy their harvest, how is it our national has grown. Does not these more concern than how these funds performs.

    Granted all investment rises and falls. Non performance in any of these funds, without oversight, who is to know the national reserves are indeed not use to show them up and good. By GOD, no one gets fired too (how to when resusal are within a family).

    Thanks to the like of Chris Kuan, Leong Sze Hian, Prof Balding and others.
    In a way there is oversight but at the moment we the few people suffers them fools and they the more people suffers us fools

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  • Dekit NSR:

    LSH is good at what he does. Asking the right question where ordinary me would not be in the know. Not being in the know is also taken to be not being in understanding.

    But like sheeps let to the slaughter, we would not know it’s the slaughter house we are in until the knife goes to work. That is clear. So to the LSHs out there, thanks.

    It is however a question of why these have to be addressed.

    The feed element is the National Reserves (be it CPF or gold held) in coffee shop parlance and is being channel to the TH & GIC.

    It all good to tell you how these channels performs. There questions beg
    - drawout from the national reserves to these funds
    - returns to the reserves by these funds.

    and in the name of national confidentiality for the supposed good of the people, it better we do not know. So we are told.

    The stewards of these funds enjoy their annual harvest, how has the (not ours anymore) national reserves grown. Compare with the like of Norway or like economy. Does not these more concern than how these funds performed.

    Granted all investment rises and falls. When non performance by these funds, without oversight, who is to know the national reserves are indeed not use to show them up and good. By GOD, no one gets fired too (how to when a the reporter and reporting are money in unity).

    Thanks to the like of Chris Kuan, Leong Sze Hian, Prof Balding and others.
    In a way there is oversight but at the moment we the few people suffers them fools and they the more people suffers us fools

    Be patient.

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  • PATRIOT of TEMESAK:

    Rabble-rouser: Not exactly true! There will be counterparty reporting or mandatory shareholders announcement in foreign stockmarkets. It’s just S’pore MSM may decide not to make such announcements or reporting in S’pore. The rise of the Internet have made such concealment harder to hide with the S’pore MSM.
    In mature stockmarkets, significant shareholders position have to be made public information re: Paladin Energy – denial in S’pore Parliament but yet the ASX shareholding roll show Temasek’s equity holding in Paladin Energy.
    Any changes in significant shareholding position must be made public via stockmarket announcement eg. UBS sale of share by GIC recently. They couldn’t hide the announcement – broadcast on financial news like on Bloomberg, Reuters, CNBC, etc.
    Any delisting or company defaults in stockmarket listing re: NZ airline, Ansett default where SIA held a substantial stake; ABC Learning Centres where Temasek held a substantial stake after it collapsed! Again, this can’t be hidden.
    Noticed how Roy Ngerng made the Powers-to-be squirm in their seats when his detailed investigation into CPF & various shennanigans were made to the public via his blog, HEARTTRUTHS. He had to be silenced. Look at the different treatment meted out to Roy & to PM LHL’s own siblings. How come PM LHL didn’t sue his siblings for essentially defamatory statements? Roy, on the other hand, wrote the truth but had paid the price. He ended up being a Martyr after the recent UBS loss debacle which had proved his point. He is now forgotten! Methinks Philip Ang is doing a reasonable job digging up the dirt on Tummysick & those Generally Incompetent Clowns otherwise known as GIC. How long can one hide?
    Anyone with a forensic/investigative mind can ‘dig’ up all the dirt one needs to prove a point & to reconstruct the accounts & do a proper balance sheet. It’s just very tedious work & frankly, there’s no money in doing such work! Unless you’re Muddy Waters or some short-seller who might find value in obtaining such information to put up a short-sell position.
    Remember Chip Goodyear – he was supposed to be Tummysick’s new CEO but was ushered out even before he could assume the seat. There were simply too much skeletons in the closet! Go figure!

    GIC books were and will NEVER open for the Public…whatever given were or are STATEMENTS…who will KNOW the TRUTH??? they can and will always MASSAGE all figures before letting it loose to the Dogs…My 2cents lah!!! bro…

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  • ah tee:

    This are massage numbers…..on the reports.

    Like OLAM they are manupulating big time and wonder how they play the stock plus cream the invesment place by Tumasik.
    Go to report in Gebon they consider a company under land grabing…Thsi is mafia this GIC link are into .This smell.Go to landgrab report you find them.

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  • Rabble-rouser:

    @ PATRIOT of TEMESAK:
    Professor Chris Balding whose an academic at Peking University had done considerable work in the field of Global Finance. He has the following article on his website. Click on the link:
    http://www.baldingsworld.com/2015/09/09/a-brief-note-about-singapore/
    He has this to say:
    Despite a reputation for clear and technocratic government, S’pore public finances present large irreconcilable differences in the real world.
    This is a similar problem as with China financial reporting – with data manipulation resulting in very large financial discrepancies.
    Among the facts he provided in his analyses;
    1. For many years, Singapore has run large operational public surpluses.
    2. Simultaneously, Singapore had become a highly indebted country relative to GDP primarily through public borrowing in a complicated scheme involving the Central Provident Fund (CPF).
    3. Total public debt stands at approximately 98% of GDP (2015 GDP figures).
    4. According to Prof Balding, cash holdings allocation and the rates of return on cash holdings, there is a discrepancy between reported & expected financial asset holding of SG$650-850 bn or US$459-600 bn.
    5. Prof Balding even provide some perspective on the discrepancy, in 1974 the year when Temasek was created; the sum of free cash flow was SG$822 billion then. In the most recent reporting period, Temasek’s financial assets were SG$834 bn. Temasek claims to have earned 17% annually since inception in 1974 – this is a significant financial discrepancy! Based upon the annual free cash inflow, Prof Balding’s calculation would provide Temasek a post cost rate of return of a mere 0.1% annually, not the 17% earned annually. WHAT HAPPENED TO THE DIFFERENCE [DISCREPANCY] – WAS THE FREE CASH FLOW LOST IN TRANSLATION OR SIMPLY LOST IN THE MARKETS?
    Notice that as with all Finance experts worth their salt; Prof Balding uses the time-honoured free [discounted?] cash flow method to calculate investment returns. Whatever Temasek uses to calculate their investment returns is a wonder to behold? The Madoff method???
    Go read his article. If nothing else, it will at least make you a finance expert & genius in quick time.

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  • Rabble-rouser:

    Rabble-rouser: Noticed how Roy Ngerng made the Powers-to-be squirm in their seats when his detailed investigation into CPF & various shennanigans were made to the public via his blog, HEARTTRUTHS. He had to be silenced. Look at the different treatment meted out to Roy & to PM LHL’s own siblings. How come PM LHL didn’t sue his siblings for essentially defamatory statements? Roy, on the other hand, wrote the truth but had paid the price. He ended up being a Martyr after the recent UBS loss debacle which had proved his point. He is now forgotten!

    @ PATRIOT of TEMESAK:
    Even Prof Balding had similar misgivings about Roy Ngerng’s defamation suit by PM LHL. He says the following:
    “Yesterday in the damages portion of the lawsuit against Roy Ngerng by Prime Minister Lee Hsien Loong, the absurdity of this legal standard was on full display. In response to the inquiry whether the facts on Mr. Ngerng’s blog were accurate the son of the first prime minister of Singapore responded “the quotes are factual but the article is not.” Mr. Lee has presented no evidence to refute the facts, that even he does not dispute, or demonstrate how the facts presented by Mr. Ngerng are constructed to create a false narrative. Mr. Lee refuses to even argue about the truth. He later argued that “…there’s not point going through it again other than to aggravate damages.”
    Put this dispute in perspective. Mr. Lee is not disputing facts presented by Mr. Ngerng but rather that his feelings were hurt. The problem the son of the first prime minister faces is that he cannot argue facts with Mr. Ngerng. There is clear public evidence that the Lee family has personally benefited from the financial dealings of Temasek which could be presented in open court. There is clear evidence that public Singaporean funds have been used to subsidize Temasek owned firms. There is clear evidence that enormous discrepancies exist in Singaporean public finances. $822 billion SGD in free cash flow over 40 years cannot earn 16% and 7% and be transformed into $834 billion. These are facts.”
    Link: http://www.baldingsworld.com/2015/07/02/in-singapore-truth-is-no-defense/

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  • oxygen:

    HEADLINE BREVITY READ is brief and often does NOT illuminate the real substance and reality of the situation.

    Straits Times:GIC posts steady real returns of 3.7% amid uncertainty”

    I would think that the headline read would be more correct if it says

    :GIC posts steady real returns of 3.7% amid asset bubbles”

    Why?

    Because there are two component of real return on any investment – first the dividend yield and secondly the unrealized value of the underlying assets in the investment portfolio. The dividend yield is actual amount of financial reward received in hand of those investment. The unrealized value of the underlying assets is FICTIONAL and its accounting quantification is inflated by price-over-earnings multiple (multiply by the number of shares in that entity). So if the price-over-earnings ratio (PER) is 25 times instead of the long-term trend of 15 times – then an investment that earned $1 is priced at $25 per share instead of $15 per share on long term trend. so if you got 1 million share in this entity, your investment is worth $25 million in bubble situation instead of $15 million. Your “return” on investment is inflated by $10 million -disregarding dividend. It is this component is extraordinary large in asset bubble economy like now of cheap money. For any investment of 1 million shares, it is unlikely to get a dividend of $10 million a year. SO MUCH OF THE RETURNS ON PORTFOLIO is FICTITIOUS and fluctuates with stock market uncertainty and volatility. So if you have invested $15 per share and bought 1 million shares and in a market downturn, your entity might be worth only $10 per shares and your investment portfolio declined by $5 million – THAT IS MASSIVE LOSSES despite you got a dividend.

    So both GIC and Temasek warned correctly of assets over-inflated now of valuation – there must be a big chance of asset pricing deflation looming over the horizon.

    http://www.msn.com/en-sg/money/news/sovereign-wealth-fund-gic-warns-investors-arent-fearful-enough/ar-BBE64tt?li=BBr8Cnr

    and

    http://www.cnbc.com/2017/07/11/singapore-investor-temasek-market-valuations-are-stretched.html

    S& P 500 stocks has long-term PER of 15X, now it is 25X earnings.

    If there is a return to long-term average, US stocks is 66% over-valued currently, it means a price/valuation fall is potentially 66%.

    WHAT WOULD THAT DO TO GIC INVESTMENTS in US and the rest of the world NEXT YEAR?

    A 20% decline will take at least 5 years to recover at current 3.7% return.

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  • oxygen:

    THE HEADLINE READ in TRE is also probably over-optimistic as well.

    Temasek Review Emeritus: GIC’s returns aren’t soo bad after all

    I think a better headline read would be this narrative

    : GIC’s returns are so lousy

    Why?

    With both Temasek Holdings and GIC warnings of overvaluations in asset pricing in investment market globally, THEY OUGHT TO SCORE A PHENOMENAL RATE OF RETURNS IN dividends and ASSET VALUE GROWTH but has BEWILDERINGLY NOT to be so.

    Here is MY OBSERVATIONS of the real performance of Temasek Holdings FY 2016/2017 return ending 31 March 2017

    oxygen:LOUSY PERFORMANCE from Temasek Holdings – in 2015, the value of its portfolio is $266 bln and in the last balance sheet year to March 2017, its value is only $275 billion. That means 3.38% in TWO years or annualised only 1.7% annually. The reason is that 2016 Financial year ending March 2016 had taken a beating.

    http://www.tremeritus.com/2017/07/13/temasek%E2%80%99s-10-year-rolling-returns-at-10-year-low/#comment-1779796

    THAT MEANS THAT IN BOTH INSTANCES, both GIC and Temasek Holdings have badly under-performed despite VERY ROSY prevailing financial market conditions. Their investment portfolio is either very weak of investment selection of either too conservative or has lot of non-performing ambulance and funeral stocks taking down the overall portfolio performance or BOTH POOR INVESTMENT SELECTIONS & CONSERVATIVE choice.

    GIC got investments like Paladin Energy as its substantial shareholder for example, – it is a funeral stock going into possible and probably cremation – now in administration

    All bubbles have to burst. In good times, you can’t perform. What is going to happen when the bad times arrive and must come visiting one day?

    We know how much they lost in the GFC & Temasek Holdings in the last GFC – multiple of tens of billions. The next financial market crisis could be bigger. Donald Trump is cocky & stupid to impossibility, Janet Yellen is clueless. In London, she talked of no financial crisis – less than 24 hour later in Washington before US Senate hearing, she backtracked completely.

    http://blogs.marketwatch.com/capitolreport/2017/07/13/janet-yellens-testimony-in-the-senate-live-blog-and-video/

    I am looking for a bloodbath in financial market soon. GIC and Temasek Holdings had better watch out and NOT lose their panties and something else too YET AGAIN.

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