This answer is very strange and inappropriate. Temasek is responding to a comment asking whether CPF min sum had been raised because Temasek had lost money. Stephen Forshaw, a foreign employee of Temasek, then sets out to explain to us Singaporeans the PAP policy on CPF, life expectancy etc. Who made him spokesperson for CPF and for the PAP? By spelling out the PAPs justification for raising the minimum sum he only adds weight to the argument that the two (CPF and Temasek) are co-mingled. What will we have next? The Head of Standard Chartered ( in which Temasek has a 20% stake) writing to ST to explain to us Singaporeans why women will have to start doing National Service? As for the returns. They are simply saying that bets put on since 2002 have done better in the past 10 or so years (He doesnt specify where this accounting period ends) than those before 2002 but again doesnt say whether this is from 1974 up to 2002 or 1992- 2002, for example. The date 2002 could have been chosen as the date The PMs wife took over , or it could be because that date was at the bottom of the previous recession since 2008, so of course anything after that is going to go up. Farnshaw can pick a statistic our of the air that even I cant examine perfectly because he doesnt provide a link to the balance sheets or any other data. He doesnt provide information on the valuation criteria that Temasek uses particularly for its unlisted positions. Again Ive been calling for transparency and public listing would achieve that. If I ran a fund in which all the longer term positions were performing worse than the newer ones, I would expect my investors to be concerned. Consistency is everything. Why arent the poorer, older performers culled? Or is there another explanation for recent out performance such as recession recovery or another more sinsister explanation or even a bubble waiting to burst. Actually I have already provided an answer for part of this previously when I highlighted the Olam takeover. That kind of maneouver allowed Temasek to put the complete purchase on the books as a profit because they had owned shares before what is widely believed to have been a leak in the takeover process, that pushed the share price up . Other Assets such as Changi Airport were transferred to Temasek for probably a 10th of their true market value. Instant profit. Forshaw tells us As for Temaseks performance, we have more than doubled our portfolio value since 2002, excluding any net new capital. - Lets look at that new capital. That is money that the government injects into Temasek. CPF may be invested elsewhere and not directly into Temasek or vice -versa but it all comes from the same pot- government capital. As the CPF monies are available for the government to invest elsewhere, it frees up government capital to inject onto Temasek. Conversely it stands to reason that if one performs poorly depleting that capital, so less money is available for the other. Its nonsensical to say the two and GIC are not linked. Lets look at that doubling of the portfolio value since 2002. The S&P 500, the Hang Seng and most global stick indices have doubled over the same period since the low of 2002. So in other words if you had been investing in an index Fund and gone on holiday since 2002 you would have done as well as temask. Had Temask done nothing in that time, the simple fact of the market rising would have created the same doubling over that period. Bravo! Now tell me again Farnshaw, why is our minimum sum being raised? KJ
Posted on: Wed, 04 Jun 2014 20:02:48 +0000
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