Reserves

From Todayonline 110209,

Yesterday, the Government disclosed the
extent of the decline in Temasek’s investment
portfolio in an eight-month period: A slump of
31 per cent to $127 billion at end-November,
from $185 billion at end-March last year.

It has emerged that Temasek lost about 31% of its investment portfolio due to the financial crisis, which is about $58 billion. Compared to other indices such as MSCI Singapore and MSCI Asia ex-Japan, which fell 44 and 45 percent respectively, I would say Temasek did relatively well, if it is just another fund out there.

But Temasek is not just any other fund. First, like what other bloggers have noted, Temasek does not just invest in equities alone. It invests in several other sectors, and thus comparison with the indices are inappropriate to begin with.

Second, the money it uses are the people's money. They are there to be used "for a rainy day", like what SM Goh Chok Tong said. If that is the case, why is so much exposed to sectors which will be hardest hit in a crisis? What is the point of investing in assets that will bear the full brunt of crises when you specifically intend to only use the funds in the face of crises?

Finally, even if Temasek beats the market, I still have a bone to pick. I thought we pay our ministers world class salaries because they claimed they are world class talents? In that case, how come they cannot see the crisis coming and take appropriate measures? Why are they like the common analyst who failed to foresee the extent of the damage to the economy, instead of the exceptional few who took steps to prepare themselves for the coming plunge in the market? This episode just proves that people like Warren Buffet, George Soros, John Paulson, and Peter Schiff are the real world class talents. Next time our ministers boast about their credentials I think we can just regard it as mere fluff.