Tan Kin Lian's Blog: Temasek Investment Results

Friday, July 09, 2010

Temasek Investment Results

Mr. Tan,
Did you read the article about Temasek's investment returns in the Straits Times? A similar article appeared in the Asian Wall Street Journal - same information but completing different view - a more neutral view. Would be good to have our comments in your blog.

REPLY
I read the Straits Times report with some a pinch of salt. A large part of the investment gains came from the recovery of the global stockmarkets, and more specifically, the Singapore market, where Temasek held a large stake. I do recall that is fact was mentioned, but it was hidden amidst the overwhelming praises of good performance.

My personal investments also recovered significantly, and I did precisely NOTHING.

15 comments:

Anonymous said...: Same here. The recovery from the 2008 crisis was lightning fast.; July 09, 2010 10:16 PM
Chu Yeow said...: I feel you're spot on with your assessment, especially your last sentence :)

It wasn't surprising though that the local media put a positive spin on Temasek Holding's performance.; July 09, 2010 10:33 PM
Anonymous said...: The joys of active investment management fees for implementing passive management strategies.; July 09, 2010 10:48 PM
Anonymous said...: Most of the gains are from Singapore.

Why? Once you step out of your house, every cent you spent goes to GLCs. They almost monopolized the whole Singapore market. They increase prices as they wish, no protest here.

If GLCs can do it in any other country, I will respect them.; July 09, 2010 11:29 PM
C H Yak said...: Annual reports are for presentations ... camouflages are common.

Especially reports by Singapore Authorities and GLC.

Even PLC do that, Temasek Holdings - no exceptions taken.; July 10, 2010 12:24 AM
Huang HW said...: Kin Lian, to be fair, when the investment went sour with the general market earlier on, the people in Temasek also did "precisely nothing" wrong!; July 10, 2010 2:58 AM
Steve Wu said...: It appears that creative accounting is at work; the situation is a lot less rosy than what is presented.

1. The $8 billion administrative charge for the year is nebulous and is ridiculously high. What is the breakdown?

2. The amount of capital injection by the government, e.g. Changi Airport corporatized and parked under Temasek Holdings, is not specified.

3. The core activities for the whole year is minor: invested $10 billion and divested $6 billion.

4. There is increasing liability due to bond sales.

5. The whole setup is just too costly, relative to the returns.

6. Where is the accountability?; July 10, 2010 4:24 AM
Tan Kin Lian said...: Reply to Huang HW

I agree with your views. I prefer to follow Jack Bogle and invest in the whole market. There is no need to pay astronomical salaries to asset managers to speculate the market.

The real value of the invested stocks are in the dividend that comes from the profits, and not from the gyration of the market.

I did not criticise Temasek for the massive losses and will not give them credit for the massive recovery in prices.; July 10, 2010 7:23 AM
Anonymous said...: Anon July 09, 2010 11:29 PM

You are very right. And not just outside the house. Inside the house too. Your utility and phone bills, your Town Council charges, your TV licence charges, property tax, and the biggest of all, at least for 80% of pupulation, your HDB flat.

How can the govt have no money (profits)? It is a big captive market for the govt.; July 10, 2010 7:49 AM
Anonymous said...: It is indeed just paper gains.

For those who recognized that it's just marked-to-market issues, and was fair to Temasek during the crisis by not slamming Temasek (me included), they earn the right to be critical about Temasek's recent marketing pitch.

However, for those commentators who were opportunistic and did slam Temasek back then, they look really insincere now when they continue to critizise Temasek. Looks like objecting just for the sake of objecting.; July 10, 2010 9:06 AM
Anonymous said...: If an organisation / individual has deep pockets to withstand short term price flunctuation, and can happily switch tune and announce that the purchase for XXX is for "long term investment", and with practically immunity from media and "shareholders", not forgetting the invisible accountability, i think they can say or report whatever they like. Personally, even if what is reported is true, the results is not impressive given the above

Jerome; July 10, 2010 3:15 PM
Anonymous said...: Both Temasek Holdings and The Straits Times have lost their 'integrity' long ago.; July 10, 2010 4:51 PM
Concerned said...: Temasek announced the total value of the portfolio has recovered dramatically and even higher than before 2008, i.e. before Lehman crises. Yes, value of portfoilo has increased by about 43%, but what about the value of the shareholders' equity. Don't forget that during the last 2 years, Temasek has gone to the market to raise funds by way of bonds, etc. With the funds raised it can then purchased further investment and this will increase the value of the portfolio. So the relevant thing here wil be "to compare the value of the shareholders' equity at 31st March 2010 and 31st March 2009 and not to compare the value of the portfolio.; July 10, 2010 6:26 PM
Anonymous said...: Actually, Temasek still LOST bigtime. Their last peak audited portfolio in Mar 2008 was $185B. Now as of Mar 2010 it is $186B. So theoretically Temasek grew their portfolio by 0.5% over 2 years, or 0.25% per year.

HOWEVER, they did not tell you how much Billions were poured into Temasek by PAPpies to support it during the darkest months in late 2008 to early 2009. Moreover, they also did not highlight the Billions of dollars raised through equity as well as the much publicised bond-raising in 2009 (and still ongoing).

If Temasek had really done nothing and did not receive the $$ Billions in extra-injections in 2008/2009, the portfolio value will now be still at least -20% in the RED.

Every person in the financial world knows this, but just keep quiet. Nothing to gain.; July 10, 2010 8:04 PM
Anonymous said...: No big deal, our portfolios also increase in value, and I don't have bond fund contributions to increas my investment funds, and yet my investment value stays
slightly above the year 2007.
So we are smarter than our SWF Temasek, and yet we do not stand out to boast. We do not need to, Temasek has to in order to cover up their embarassment of a billion dollar loser of the world during the financial chaos, wher they sold barclays for a song, and a Middle eastern SWF country picked them up for a song. So shameful.; July 12, 2010 1:13 PM