How mainstream media help PAP masks poor performance of GIC

Like PAP, mainstream media journalists treat their readers as goondus and have been helping their paymaster conceal poor investments by Temasek and GIC.  Example:

After GIC had sold Merrill Lynch Financial Centre in 2014, mainstream media published misleading articles which left readers to conclude that GIC had made a handsome profit.  It did not.

Why MSM did not disclose the 2007 purchase price in S$ is obvious: GIC made a capital loss of S$288 million. ($1.488 billion – $1.2 billion)

GIC had invested near the stock market top in 2007 when property yields, net of costs, were likely to be peanuts.

The return on this investment was likely zero – or negative – after 7 years.

Our S$376 billion CPF which forms part of government reserves – managed by GIC – is all invested in overseas assets.

Like it or not, GIC’s poor performance affects CPF members. As is evidenced by PAP constantly tweaking CPF rules to retain more of our retirement savings, especially post global financial crisis.

Singaporeans should be wary of misleading MSM articles on Temasek and GIC.  Besides a handful of PAP ministers, nobody – including all MPs and unelected President Halimah – knows the true state of our reserves.

 

Phillip Ang

* The author blogs at LikeDatOsoCanMeh.

 

 

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19 Responses to “How mainstream media help PAP masks poor performance of GIC”

  • VTO for sure:

    No wonder rocket tax increases and 9% GST coming.

    Make or lose money, they take Big Fat salaries and bonuses at OUR COSTS.

    For Insincere and Dishonest, cannot be elected again.

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  • Bapak:

    The mainstream media are the master in fake news, to cover their masters’ backside. Likewise PAP.

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  • Tremendous:

    Members of a certain party are only custodians of our cpf assets but they behave like owners. The next election is a vote on conscience if we believe locals are not downright stupid. Go talk to any financial expert and they will tell you to be careful if you have too much assets that are illiquid. In our case, our cpf assets get more and more illiquid. As for CCS trying to sing the same tune these few days that they are going to look after locals, don’t bet on it. They keep reneging on promises and yet he sidestepped all the key feedback to talk about other things.

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  • patriot of TUMASIK:

    NOT Help but PAID lah!!! the Fiddler calls the TUNE leh!!!

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  • TL Tan:

    This analysis is incorrect. Think in terms of local currency, in this case, GBP. GIC bought the building for GBP 480mil in 2007 but sold it for GBP 582mil in 2014. This is a gain of nearly 22%. The FX conversion made it seem as though GIC made a loss but the fact is GIC utilizes FX hedging tools. They are much more sophisticated than you think. In addition, you never mentioned the rental income GIC derived from the 7 years it owned the building. All in, GIC would have made a substantial profit.

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  • they r AritoCATs . . .:

    > “Like PAP, mainstream media journalists treat their readers as goondus and have been helping their paymaster conceal poor investments by Temasek and GIC. ”
    -
    Researchers of local U, complained about Gov non-disclosure of economics data –
    that other countries published regularly.
    -
    Papaya claimed they are AritoCATs . . .
    they don’t want others snooping around . . .
    lest the Peasants learned that the Emperor is wo clothes.
    -
    Remember the Ballot Box !

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  • rukidding:

    Ah!,,,,,I hear the “satay Indian/Malay” Macik named being called again ?

    She really “beh pai seh”….just like her Boss ???

    Anyway,…what to do ?…just let GOD do the “punishment”job for us lor !

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  • oxygen:

    @ TL Tan,

    HOW DO YOU KNOW GIC hedge every investment decision on currency risks? Hedging is not cost-free. What if the investment turned sour (if there is an underlying currency hedge) as did in such a case as Paladin Energy, an Australian uranium miner? I have never know of any investment fund BUYING OVERSEAS INVESTMENT AND HEDGING THEIR CURRENCY RISKS together. FX is part of the risks package of possible loss and gain when it comes to offshore investing. Funds that invested off shore are not FX-risks timid.

    And you ignored the cost of capital employed.

    TL Tan: This analysis is incorrect. Think in terms of local currency, in this case, GBP. GIC bought the building for GBP 480mil in 2007 but sold it for GBP 582mil in 2014. This is a gain of nearly 22%. The FX conversion made it seem as though GIC made a loss but the fact is GIC utilizes FX hedging tools. They are much more sophisticated than you think. In addition, you never mentioned the rental income GIC derived from the 7 years it owned the building. All in, GIC would have made a substantial profit.

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  • Hedging Mistake:

    You sure they hedge correctly or the other way around. Most likely hedging also lost, that’s why dare not publish the figures and left it blank.?

    TL Tan:
    This analysis is incorrect. Think in terms of local currency, in this case, GBP. GIC bought the building for GBP 480mil in 2007 but sold it for GBP 582mil in 2014. This is a gain of nearly 22%. The FX conversion made it seem as though GIC made a loss but the fact is GIC utilizes FX hedging tools. They are much more sophisticated than you think. In addition, you never mentioned the rental income GIC derived from the 7 years it owned the building. All in, GIC would have made a substantial profit.

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  • LIONS:

    whatever it is,author is not wrong to say MSM mot reporting important info in the PROPER MANNER.
    the report lacks transparency and deliberately blurs info in effect.

    why not report the FX HEDGE as well?
    such a big transaction and over 7 years,the FX TRANSLATION CAN BE IMPACTFUL,positive or negative.

    well,IT IS NOT AS IF th or gic DO NOT BOAST OPENLY WHEN THEY REALLY MAKE SOME TINY PROFITS.
    In fact,they keep repeating it thru various channels like CNA etc repeatedly???

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  • TL Tan:

    @Oxygen

    You are correct to say investment funds take the FX risk as part of their of their overseas investment. But where GIC hedges the overall portfolio level, not in individual investments. So in this case, while the investment is in GBP, the vast majority of investments is in SGD. Or, GIC could have raised funds (bonds) in GBP used to finance this GBP investment, thus having a natural hedge.

    As for the cost of capital, GIC can borrow very cheaply in the capital markets, given Singapore’s AAA credit rating. Therefore, there is good reason why GIC can perform well. And you should meet GIC employees. They are some of the smartest people around, comparable to those working in Goldman Sachs or McKinsey Consulting.

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  • LIONS:

    TL Tan:
    November 30, 2018 at 9:02 pm (Quote)
    @Oxygen

    You are correct to say investment funds take the FX risk as part of their of their overseas investment. But where GIC hedges the overall portfolio level, not in individual investments. So in this case, while the investment is in GBP, the vast majority of investments is in SGD. Or, GIC could have raised funds (bonds) in GBP used to finance this GBP investment, thus having a natural hedge.

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  • Uncle Wong:

    Old uncle Wong sell water melon, own sell, own praise.
    Ownself check ownself.

    Goalkeeper went sell Milo; Sitty Times play ownside
    Cheap reserves from sucker sinkies
    smartest PaYpAy suckers around
    cheaply to use, forever win….. lose cover up and Uncle Wong sell water melon again. Sitty Times ownself write ownself. bad ones left blank.

    TL Tan:
    @Oxygen

    As for the cost of capital, GIC can borrow very cheaply in the capital markets, given Singapore’s AAA credit rating. Therefore, there is good reason why GIC can perform well. And you should meet GIC employees. They are some of the smartest people around, comparable to those working in Goldman Sachs or McKinsey Consulting.

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  • oxygen:

    @ TL Tan

    MATE, YOU ARE LIKELY TO BE SPECULATING ON HEDGING. I find it illogical because of the following reasons

    - its investment in GBP is of varying time horizon – if GIC were to raise funds (bonds) in GBP to finance this GBP-denominated investment – it has got fixed maturity. How do you know they coincides of investment/borrowing time horizon. And bond market rates at maturity might be unattractive to risk entry, so you are stuck.

    - its investment in foreign currency investment might have gone sour and that could even coincide with currency hedging on the wrong side of the bet as well. Give you an real example – Paladin Energy (an Australian uranium miner) which GIC was substantial shareholder. GIC lost their pants on this one and it was bought when A$/S$ parity was higher which means that if they hedge the A$ exposure – they lost both the invested capital and ALSO LOST ON CURRENCY HEDGING. My estimate is that GIC investment in Paladin cost over A$100 million and its current worth is a few million A$. What good does hedging in A$ do for them? I have never heard of GIC issuing A$ bond borrowing (listed) Down Under.

    TL Tan:Oxygen, You are correct to say investment funds take the FX risk as part of their of their overseas investment. But where GIC hedges the overall portfolio level, not in individual investments. So in this case, while the investment is in GBP, the vast majority of investments is in SGD. Or, GIC could have raised funds (bonds) in GBP used to finance this GBP investment, thus having a natural hedge.

    As for the cost of capital, GIC can borrow very cheaply in the capital markets, given Singapore’s AAA credit rating. Therefore, there is good reason why GIC can perform well. And you should meet GIC employees. They are some of the smartest people around, comparable to those working in Goldman Sachs or McKinsey Consulting.

    Of course, the irrational logic of investing Down Under and supposedly hedging in A$ when GIC bought into Paladin is this – the hedging (if such was ever done of your imagination) is futile. Why? Paladin’s operating uranium mines are in Namibia and in Malawi

    https://www.paladinenergy.com.au/

    Paladin business exposure in foreign currency of Namibia and Malawi, WHAT GOOD IS THERE FOR GIC investing in Paladin to hedge its currency only in A$ only? I don’t think it can hedge its currency/sovereign risks in Africa.

    SO THE BOTTOM LINE IN TRUTH IS THIS – IF U INVEST IN OFFSHORE INVESTMENT, IT COMES WITH THE RISKS ACCEPTED.

    AND FINALLY cost of capital include equity in finance concepts.

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  • oxygen:

    @ TL Tan

    THOSE IN GIC might have been some of the smartest people around, but it is NEVER A SURE BET of risk-taking decisions.

    TL Tan: And you should meet GIC employees. They are some of the smartest people around, comparable to those working in Goldman Sachs or McKinsey Consulting.

    And as @ Hedging mistake points out, it can go awry wrong.

    Hedging Mistake: You sure they hedge correctly or the other way around. Most likely hedging also lost, that’s why dare not publish the figures and left it blank.?

    This is even true for those with long accumulated experience of forward and currency hedging. Share with you a real life case-history of a COLLAPSED top Australian gold producer – Sons of Gwalia (SOG) – they hedge their bets in the wrong direction of gold price and currency bet. Believe it or not, SOG has a long luminous history of gold-mining and forward sales (including currency hedging) since 1854 and they have top institutional shareholders all got badly burnt when it collapsed suddenly.

    Sydney Morning Herald:Among Sons of Gwalia’s substantial shareholders are the Templeton group, Schroeder and Aviva. Canadian miner Teck Cominco owns about 10 per cent and a major tantalum customer, Cabot Corp, is also on the register. Goldman Sachs, Wellington and National Australia Bank’s funds management businesses were all shareholders until very recently.

    Also exposed to the collapse are some of the world’s biggest banks, including Citigroup, HBOS, Goldman Sachs, JPMorgan, Dresdner, HSBC and, locally, ANZ and Commonwealth.

    The institutions which got caught are angry.

    Sons of Gwalia’s gold hedging had big holes

    https://www.smh.com.au/business/sons-of-gwalias-gold-hedging-had-big-holes-20040904-gdjofw.html

    Believe me, mate, HEDGING IS NOT AS EASY AS YOU READ IN NEWSPAPER OR INVESTMENT GOSSIPS COLUMNS, and luminous institution like SOG with over 150 years experiences simply got vaporized by wrong way bet just like methylated spirits.

    I count my blessing that I wasn’t caught in the life-ending episode of SOG debacle – the smartest of the world’s savviest investors (as you read) were VERY ANGRY at their surprised loss.

    WELCOME TO THE REAL WORLD, MATE.

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  • RDB:

    This idiotic GaGament has big time taken 70% voters for financial gains joy rides.

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  • RDB:

    CPF savings was created as a retirement finance by papa. And then they started deviling it in stock markets so called investments. Thay didn’t know ther are real risks of losing is it? So smart they self claim themselves to be. Smart to and in what? Con Sinkies they called daft. And by their recthoric, have they not reveal by showing themselves as daft, but also cons to cover up their stupidity or not!

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  • Phillip Ang:

    @ TL Tan

    Nowhere in any GIC report is it stated that currency risks are hedged.

    If GIC did hedge, it could have simply stated so instead of leaving out the 2007 buying price in SGD.

    By stating the 2007 buying price only in GBP – not both currencies – the ST article intentionally left it to readers to conclude that the investment was profitable.

    FYI, since 2014, GIC has concealed its cash position under ‘nominal bonds and cash’ in its annual reports. GIC’s actions show that it can no longer be trusted.

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  • 鸟龙的人:

    主流媒体的领导层全都是白衣杂种的人
    报喜不报忧,最多假新闻
    没有专业道德的贱人 丢尼阿猩

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