Temasek’s 10-year rolling returns at 10-year low?

I refer to the article “Temasek’s net portfolio value hits record $275b” (Straits Times, Jul 12).

It states that “This measure includes dividends paid to its shareholder, the Finance Ministry, but not capital injections from the ministry. Temasek’s shareholder did not make any capital injections in the last financial year.”

According to the chart in its report – the 10-year rolling returns for the last 10 years is at a 10-year low of four per cent.

What was the return with “boost” assets?

According to Temasek – “From 2002 onwards, the performance of this portfolio of earlier Temasek assets is free from the “boost” afforded by such listings and continued to perform well relative to the markets, showing annualised returns of 11% in SGD terms from 31 March 2002 to 31 Mar 2012″ – why isn’t the annualised return (after adjusting for this “boost”) given, so that one can have a better understanding of what the 15 % annualised return would be reduced to without the “boost”?

The Government, which is Temasek Holdings’ sole shareholder, had said in 2014 that the capital injection then did not include proceeds from the Special Singapore Government Securities (SSGS), which are instruments that the Central Provident Fund (CPF) Board uses to invest Singaporeans’ CPF savings.

According to the Government in 2014 – Temasek Holdings does not manage any CPF monies.

It is understood that it was the first time that we had disclosure as to where exactly the capital injection into Temasek Holdings came from.

But if this was the case – why?

Transparency sometimes only?

In the 10 years to 2014, the Government had injected capital into Temasek Holdings a few times. For example, in Temasek Holdings’ 2007-2008 financial year, the MOF pumped $10 billion into the company and in 2011, the Government put in a further undisclosed amount to fund the joint venture between Temasek and Malaysian state investment firm Khazanah Nasional.

Why is it that we have partial transparency? At times, we have announcements that state the sum of the capital injections made by the government, while at other times this figure was not stated.

Also, did any of the capital injections from the past say exactly where the money came from? The clarification in 2014 by the Government stated that the $5 billion injection did not come from proceeds of the SSGS, proceeds from government land sales in Singapore, government budget surpluses, and proceeds from SGS? Did we get this clarification only because there was then renewed public interest in CPF funds?

In addition, how do we know for sure that Temasek Holdings’ capital injections before the Government of Singapore Investment Corporation (GIC) was formed, never came from CPF funds since Temasek Holdings started about 7 years before the GIC was formed?

CPF funds were first co-mingled with the rest of Government’s funds?

According to the Government, the Government pools the proceeds from SSGS issuance with the rest of the Government’s funds, such as proceeds from the tradable Singapore Government Securities (SGS), any government surpluses as well as the proceeds from land sales.

The Givernment said that the commingled funds were first deposited with the Monetary Authority of Singapore (MAS) as Government deposits. MAS converts these funds into foreign assets through the foreign exchange market. However, a major portion of these assets are of a longer term nature, and are hence transferred over to be managed by GIC.

More than $35b injections into Temasek – You sure none from CPF funds?

Although the reports state that the SSGS proceeds are not passed to Temasek Holdings for management and it manages its own assets which do not contain any CPF monies, Temasek Holdings pools its assets with the rest of the Government’s funds. So, how do we know for sure, especially in the early years, as to whether the Government’s injections into Temasek Holdings did or did not include CPF funds?  As of 2014, a total of $35 billion plus an undisclosed sum in 2011 were put into Temasek.

Why did it take 49 years (in 2014) for Singaporeans to be told exactly where their CPF funds have gone to, and was managed by whom?

 

Leong Sze Hian

 

 

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13 Responses to “Temasek’s 10-year rolling returns at 10-year low?”

  • Hiding Ho Ching's mistakes:

    Ho Ching’s stupidity and incompetence are hidden by combining the financial results of Temasek’s onshore (GLCs) and offshore investments. She is not responsible for the former (e.g., SIA, DBS Bank, Keppel, Sembawang, etc.) who have their own board of directors. Their financial results should not be used to cover up the Temasek’s losses overseas. Ho Ching should be held accountable for Temasek’s overseas investments.

    Temasek’s (and GIC’s) lack of openness and transparency is consistent with the allegation made by the Lee siblings (LWL and LHY). FOR SURE LHL AND PAP CANNOT BE TRUSTED.

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  • rukidding:

    LPPL ?

    Cpf to SSGSs to Tumbalek…what’s the difference as Cpf to Tumbalek ?

    Always using “magical tricks and smoke” and “select committee” to “pretend and look Innocent and fair” ????

    Wtf !

    LPPL……the Leegalised way !

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  • PATRIOT of TEMESAK:

    Mr. Leong do you KNOW how they spell Lee in Indonesia???

    ANSWER:….Lie!!!

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  • KELONG PAP:

    PAP IS KELONG PARTY……….

    NO INTEGRITY

    ZERO PRINCIPLE

    LACK ACCOUNTABILITY

    NIL COMPASSION AND HUMANITY

    SHAMELESSLY GREEDY IN PAYING THEMSELVES HIGH , DOING NOTHING AT ALL

    CHEATING THE PEOPLE’S CPF AND TAX MONEY

    THE LIST GOES ON AND ON…..

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  • Temasek-40% unListed Firms. .:

    Good article !
    -
    Bloomberg has this –
    https://www.bloomberg.com/news/articles/2017-07-11/temasek-s-assets-jump-to-record-199-billion-on-rallying-stocks
    -
    The hype – “Temasek Assets at a record . . .”
    -
    The FinePrint – “UnListed firms under Temasek nudging up to 40% . . ”
    -
    What’s the big deal?
    -
    Many of unListed firms are in “bubble” territory.
    As unListed firm, Uber is valued at USD60b; MoBilke 3b; Ofo 1b – Any taker???

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  • Rabble-rouser:

    Temasek’s 10-year rolling average rolling off a cliff’s edge? If Temasek’s 10-year rolling average is at a 10-year low of four per cent – something is very wrong with Temasek investment strategy! In the US, much wealth have been created via the stockmarket – so what’s Temasek’s problem?
    Not when since 2008 – 2017, the global stockmarkets have made consistent higher highs especially the US stockmarkets followed by the Chinese stockmarkets, HK, etc. How come Temasek is underperforming the stock market indices? The last 10 years circa 2008 to 2017 had been brilliant for stockmarkets as global Quantitiative Easing (QEs) have benefitted stocks more than anything else! Stocks have been number 1 in this liquidity flushed environment!
    In fact, the current stockmarket is never more easier to invest – passive investing ie. index investing had outperformed active investments; hedge fund investments, private equity investments & a whole host of investing philosophy by a mile! Techies investing in the top 5 technology stocks [Alphabet (Google); Amazon; Apple; Facebook; & Microsoft] have outperformed the general market by several basis points – again showing the bias of the investment process.
    If Temasek can’t do a good job investing, then they should return their funds back to their funding source eg CPF. In essence, the PAP should allow people flexibility to invest their CPF funds in the best areas ie. passive index fund based on growing global equity markets like the US & China. Since they (the PAP) don’t seemed have to have a grasp of investment know-how; pretty much behind the investment curve & really, really bad in real-time investing. Methinks I could even do better than Temasek with my own money than them.
    Sorry to say this but why do Temasek exist when they can’t even justify their worth in a real-life existance. Temasek currently exists because they not only Jiak Leow Bee from CPF funds but to provide cushy jobs & prestigious positions for the political elites not because of their capability (talent) but because it provides aristocratic economic privilege with non-accountability – can one do that in the real world? In the US, you’ll be sacked in quick time!

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  • LIONS:

    Each time,TEMA$ick lo$e big time in foreign foray$,it will COLLECT MORE MONEY from poor sgs through its local stable.

    It is time to SEGREGATE OVERSEAS P/L from local PROFITS for FAIR N TRANSPARENT FINANCIAL REPORTING N TO ANNOUNCE THIS PUBLICLY.

    If foreign investments are mostly losing money,it is obvious HJ N TH executives are SQUANDERING Sg taxpayer money away.THIS MUST STOP.

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  • No Eye to See:

    They are only transparent when there is Good News. Ever wonder why we never noticed any transparency? Simply because where got good news. Always only Goondu News. Whatever s*it comes out from their mouth, always have to read between the lines and expect differently. Apologise, I m sorry, Cry cry baby, so FAKE.

    One Goondu minnie stir even can open mouth and state of course got Check n balance. Got own people checkown people to ensure TH accounts. Got EP to check on Govt. Got Committee to review Ministers Salaries, 38 Hoaxly. We are assured and as sure as the sun will rise from the West tomorrow.

    Yet, still got 70% dafts still believing in them.

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  • PATRIOT of TEMESAK:

    Rabble-rouser:
    Temasek’s 10-year rolling average rolling off a cliff’s edge? If Temasek’s 10-year rolling average is at a 10-year low of four per cent – something is very wrong with Temasek investment strategy! In the US, much wealth have been created via the stockmarket – so what’s Temasek’s problem?
    Not when since 2008 – 2017, the global stockmarkets have made consistent higher highs especially the US stockmarkets followed by the Chinese stockmarkets, HK, etc. How come Temasek is underperforming the stock market indices? The last 10 years circa 2008 to 2017 had been brilliant for stockmarkets as global Quantitiative Easing (QEs) have benefitted stocks more than anything else! Stocks have been number 1 in this liquidity flushed environment!
    In fact, the current stockmarket is never more easier to invest – passive investing ie. index investing had outperformed active investments; hedge fund investments, private equity investments & a whole host of investing philosophy by a mile! Techies investing in the top 5 technology stocks [Alphabet (Google); Amazon; Apple; Facebook; & Microsoft] have outperformed the general market by several basis points – again showing the bias of the investment process.
    If Temasek can’t do a good job investing, then they should return their funds back to their funding source eg CPF. In essence, the PAP should allow people flexibility to invest their CPF funds in the best areas ie. passive index fund based on growing global equity markets like the US & China. Since they (the PAP) don’t seemed have to have a grasp of investment know-how; pretty much behind the investment curve & really, really bad in real-time investing. Methinks I could even do better than Temasek with my own money than them.
    Sorry to say this but why do Temasek exist when they can’t even justify their worth in a real-life existance. Temasek currently exists because they not only Jiak Leow Bee from CPF funds but to provide cushy jobs & prestigious positions for the political elites not because of their capability (talent) but because it provides aristocratic economic privilege with non-accountability – can one do that in the real world? In the US, you’ll be sacked in quick time!

    Bro, Temesak was not buying into blue chips or good stock…they were buying into Dead Horses trying to FLOG them to life ABC & Paladin are Prime examples NOT PRIME STOCK!!!

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  • 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.

    It proves that Temasek portfolio holding is HIGHLY VOLATILE of performance in the last 3 years – in tougher times, it swims underwater and in good times it swims above it. No surprise there for FY ended March 2017 because global economies were recovering a little in the prior 12 months and global equities were heading up north.

    China is 25% of its portfolio holding, mostly in Chinese banks. TH never learns the lessons from our debacle with investments in banking sector post GFC – these are dog’s business with big risks because of too many counterparty risks. China economy is growing albeit slower each year of around 6.5% far better than global average and definitely far better than mature economies but our investments in Chinese banks are NOT PERFORMING in the last 3 years. In bad times of down-turn, Chinese banks will be badly hit – they have too many skeletons in their cupboards. So will Temasek’s investment holdings in Chinese banks is highly vulnerable.

    Temasek Holdings warns that global equities is overvalued – long due for a steep correction of valuation – that means that its other non-Chinese investment portfolio which did “better” from March 2016 to March 2017 is at risks of a big slicing of its valuation.

    The other big investment of TH is Singtel – this is a dinosaur got getting anywhere BUT LIKE A SAFE PARKING LOT in good times whose value will also be hit if there is a global downturn and global equities taking a downward revaluation in its wake.

    MY bet is that TH portfolio is more like than not to take a HUGE beating in the FY ending March 2018 ( Chinese banks and Singtel are vulnerable investments) if global economies slows down with higher interest rate or if there is a stock market revaluation downwards.

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  • oxygen:

    OF COURSE, TH performance by the size of its portfolio, needs to take into account how many billions were injected by the Ministry of Finance. In simple analogy, if your investment portfolio is $100K in 2015 and in 2016, you put in another $50K into your investment pool – IT DOES NOT MEAN you score a 50% gain on your original investment of $100K invested in 2015, it simply means you add on to your risks capital. It is NOT PERFORMANCE on your original equity.

    Until TH final accounts is out, we will know how much Ministry of Finance pumped more capital into TH in what was a better year for global economy.

    TH managed our CPF money despite its denial now. Before GIC was formed in 1980s, our CPF money along with govt. budget surplus flowed into TH. Roy Ngerng’s website “HEARTTRUTH” previously captured screenshots of TH webpage telling us that TH managed our CPF money. That is why Roy became so controversial of truth telling and offensive to political sensitivity. Besides, Ministry of Finance is very rich, collects plenty of money via land sales (for BTOs), COE, ERP, all kinds of inflated charges for public services etc etc and those are channeled into TH’investment portfolio.

    SO THE SIZE OF GROWTH in TH investment portfolio is NOT a measure of its performance. It could be capital injection.

    BUT IF THE SIZE OF TH investment portfolio declines, its means some of its investment holdings has gone bad and despite Ministry of Finance capital injection – this capital infusion is NOT SUFFICIENT to offset the decline in the value of TH investment portfolio.

    That is why peasants have to be careful in interpreting TH’s performance on the size of its portfolio holdings. That is

    - growth in the size of investment portfolio of Temasek Holdings MAYBE BUT NOT NECESSARILY a good sign of investment performance.

    - DECLINE in the investment portfolio for the FY ended 31 March 2016 is SURE A BAD THING of asset value erosion.

    SO DON’T BE TAKEN IN BY MEDIA FARTING FRENZY OF NONSENSE in FAKE NEWS publishing by PRAVDA SINGKIELAND.

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  • oxygen:

    THE OUTLOOK FORWARD IS THREATENING FOR TEMASEK HOLDINGS & GIC – all credits to both of them of seeing looming ominous clouds ahead. Here is the latest update on US economy.

    “Momentum investors buy stocks even though gold and bonds are warning them”

    http://www.marketwatch.com/story/gdp-estimates-for-second-quarter-come-tumbling-down-2017-07-14

    “The culprit was the June retail sales report. Retail sales fell 0.2% in June, the Commerce Department reported.”

    Banks and analysts are in rapid succession downgrading US 2nd qtr GDP numbers. This came after the exhausted 0.7% first qtr GDP growth – attributable to -

    “US first-quarter growth weakest in three years, as consumer spending falters”

    http://www.cnbc.com/2017/04/28/first-estimate-of-2017-q1-gdp.html

    So we are seeing a CONTINUATION OF PATTERN OF WEAKNESS IN CONSUMER SPENDING undercutting GDP recovery. And that spells disaster.

    Janet Yellen Fed Chairperson has backtracked from her forecast (made only 24 hours earlier in London) that we won’t see another financial crisis when she said to the Senate hearing Washington this – “We can never be confident there won’t be another financial crisis”

    monetary policy report.

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

    With falling retail sales and no sign of inflation – business is hard-hit. Business cannot past on falling sales revenue by increasing prices – THERE IS NO PRICE LEVERAGE IN A PRICE DEFLATIONARY ENVIRONMENT.

    That means falling corporate earnings and might even see a return to employment retrenchment and a slow-down of FED-initiated interest rate hike.

    BUT THAT DOES NOT STOP MARKET FORCES FROM GOING ROGUE – the bond market run-off might see falling bond prices (lifting interest rate higher) never mind the Fed did what or didn’t do what. The Fed could end up doing “catch-up” again. How?

    The Fed is likely to focus on unwinding its $4.5 trillion balance sheet instead of raising interest rate in September. The Fed is determined to wind back its bond holding in its book of $4.5 trillion now – fueling asset bubbles from bonds, to equities to real estate killing the recovery strength since the last GFC – and that means falling bond prices (as Fed sells out) lifting interest rate in a weakening economy.

    http://www.marketwatch.com/story/momentum-investors-buy-stocks-even-though-gold-and-bonds-are-warning-them-2017-07-14

    Without the cheap money – as the Fed winds back – all asset classes will be hit from bonds to equities to REAL ESTATE (WORST BECAUSE OF LEVERAGE BORROWINGS).

    GIC, TH will be hit hard – same as property speculators in Toronto, Vancouver, Sydney, Singapore.

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  • Rabble-rouser:

    oxygen: GIC, TH will be hit hard – same as property speculators in Toronto, Vancouver, Sydney, Singapore.

    Mate! The expansionary credit cycle was already telegraphing the end through the volatility in the financial, currency & commodity markets. Yet Janet Yellen was looking up through the ar*e end of the expansionary credit cycle – preferring not to increase rates aggressively. What she didn’t realized was that the tip of credit destruction was just around the corner.
    Being a Classical-trained Economist, she’s looking at the economy from a cyclical perspective ie. from the jobs end (unemployment rate, job creation numbers) & from the lukewarm economy resulting in her maintaining the Status Quo.
    What she couldn’t see is a Paradigm Shift of immense proportion – the US economy is undergoing a radical capital shift; From the low-return type of physical manufacturing jobs as well as to the even-lower returns from Brick ‘N Mortar investments [CREDIT DESTRUCTION] into the higher return investments on capital expenditure on automation/robots/drones; the smart technology (online retailing using Big Data to detect trends) & algo-driven smart apps (the Sharing economy, High Frequency Trading Algo, etc) dispensing with high cost physical labour (ie. the so-called jobless economy). Credit destruction can only lead to one thing; high cost of capital resources going forward!
    Central Bankers can be so clueless as to the Economy which is undergoing Fundamental Restructuring. Janet Yellen should have been sacked by Trump when he assumed power. Now it could be too late to reverse the damage done by her. The joke is on Trump. When he talked about ‘Draining the Swamp’ during his election campaign – the truth was that Donald Trump was the Swamp Thing himself. When Trump assumed power, what he did was entirely opposite to his campaign promises – he filled the Treasury positions with Goldman Sach alumini – the very product of the Swamp.
    The Chinese Capital Flight is ending! China Poliburo are pulling back those expansionary corporations re: Anbang Insurance. Many of China’s corporations are overextended on the debt front. If China’s capital flight ends, the so-called Global Real Estate Boom would crash to unimaginable levels. Already Vancouver is crashing; Toronto is awaiting for the pin to burst the bubble, Sydney & Melbourne is worrying RBA officials with the overextended real estate prices. If China’s capital flight is a one-off phenomena – we’re looking at an extended bear market in real estate! Maybe a 26 year contraction? Most of us would be dead by then!

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