Temasek

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#11
(30-11-2010, 01:50 PM)iisterry Wrote: Hm.. Because it's our reserves? Policies are debated at the grassroots level and submitted for review at Parliament in a Democracy.

I've seen a few suggestions. One of them is to list the company and distribute the shares amongst Singaporeans. This can be in the form of non-transferable equities.

Analysing the company's performance will allow one to determine if the cost of the "fund manager" is too high. An administrative expense of over S$8 billion for an employee count of over 300 translates into almost S$20+ million yearly per individual. Excessive extravagance?

I take offence at this statement.

Quote:(b) it suits your political agenda i.e. you belong to an opposition party.

This is the type of attitude that typifies Sillyporeans. I hardly expect that sort of reply coming from you. And, No. I'm non-partisan. Rolleyes

It seems the breveity of my reply has offended you and for that I apologize. However, I still stand by my comment and will reply to this in detail later tonight on why I still think this is a futile exercise best left to either those want to feel aggrieved or who have a political agenda to pursue.
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#12
(30-11-2010, 03:12 PM)kazukirai Wrote: It seems the breveity of my reply has offended you and for that I apologize. However, I still stand by my comment and will reply to this in detail later tonight on why I still think this is a futile exercise best left to either those want to feel aggrieved or who have a political agenda to pursue.

No worries. Apology accepted. I gather you should be quite senior in age? However I still do not find futility as a valid excuse. The incumbent will not hold on to power forever.

Nevertheless, analyzing how to restructure the SWF into bringing benefits to citizens without compromising operational principles will prove to be a mental exercise that can pose a challenge to the even the most "seasoned of forumner" here.

If it is possible for a person to retire due to financial independence, it should not be too far fetched for a country to achieve a similar level.
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#13
Not listed, out of topic.. put under "others" section? Tongue
1) Try NOT to LOSE money!
2) Do NOT SELL in BEAR, BUY-BUY-BUY! invest in managements/companies that does the same!
3) CASH in hand is KING in BEAR! 
4) In BULL, SELL-SELL-SELL! 
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#14
Pardon me for asking a silly question. When you say "distribute to singaporeans" and "non-transferable", how do we resolve the issues of people kicking the bucket, or newborns, or newly integrated FTs? Just curious. Or is it to be a one- time issue only? Kind of like how they did for NSS or ERS? Just a thought...
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#15
Yup, should be in "Others".
Specuvestor: Asset - Business - Structure.
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#16
I find this thread a very interesting discussion topic, one of the best thread I ever encountered so far.

Please allow me to post some articles to get everyone up to speed and fire the first round of discussion. If there's a need for more information, I would gladly help.

_______________________________________________________________________________________________________________



Sovereign-wealth funds
Asset-backed insecurity
Wall Street, the flagship of capitalism, has been bailed out by state-backed investors from emerging economies. That has people worried ,for good reasons and bad
Jan 17th 2008 | from PRINT EDITION

IN REYKJAVIK almost two years ago the Norwegians were throwing their weight around and the locals were furious. Having spotted that an Arctic boom was about to end, a government-owned fund from Oslo must have thought it had found an easy way to make money in a market it knew well. It began to sell short the bonds of Iceland's over-stretched banks. Only common sense, you might argue.

Halldor Asgrimsson, then Iceland's prime minister, did not see things quite like that. Why was the Norwegian state investing hundreds of millions of dollars to undermine Iceland's economy? Had not both countries signed a Nordic mutual-defence pact against financial destabilisation? "We must protest against this action," he told Morgunbladid, a newspaper.

On Wall Street in the past few weeks, the sums have been bigger and the actions more benign , at least so far. This week Merrill Lynch and Citigroup became the latest to get the sovereign-wealth treatment, picking up a further $6.6 billion and $14.5 billion respectively, much of it from governments in Asia and the Middle East (see article). Sapped by the subprime crisis, rich-world financial-services groups have been administered nearly $69 billion-worth of infusions from the savings of the developing world in the past ten months, according to Morgan Stanley.

Norse raiders one year and white knights the next, sovereign-wealth funds are as hard to grasp as shadows. In principle everyone welcomes foreign investment. But when the money belongs to other governments, people , especially politicians , are not always so sure. America's Congress has uttered barely a squeak as Wall Street's titans have taken foreign cash. But when credit was loose it was alarmed at the state-backed acquisitions of oil companies and ports.

Some funds, such as Norway's, behave as capitalists bent on making as much money as they can. Others may have "strategic" goals , to nurture national champions, say, or to galvanise regional development. Sovereign-wealth funds are a way to help recycle emerging-market surpluses. And yet suspicion about their motives could make their money much less welcome: rather than accepting investment from sovereign-wealth funds, countries could turn to financial protectionism.

You can see why a call from Canada's Alberta Heritage Savings Trust Fund may strike you differently from an offer by Venezuela's Investment Fund for Macroeconomic Stabilisation. The question of what to do with other governments' money is becoming more urgent by the month. The 29 sovereign-wealth funds monitored by Stephen Jen, an economist at Morgan Stanley who has followed them closely, are now worth about $2.9 trillion (see table).

His list contains a wide range of funds. The Abu Dhabi Investment Authority, of the United Arab Emirates, worth $875 billion, is biggest. But the table also includes the China Investment Corporation (CIC), which last year was sent into the world with $200 billion in its back pocket; and Alaska's $38 billion Permanent Fund, based on the state's mineral wealth.

Although sovereign-wealth funds make up only 2% of the world's $165 trillion-worth of traded securities, they have a lot of firepower: more equity than private equity and more funds than hedge funds (see chart 1). In a paper for RGE Monitor, a research firm, Brad Setser and Rachel Ziemba conclude that the Gulf rivals China as "new financial superpower".

.Moreover, sovereign wealth is growing fast. Mr Setser and Ms Ziemba reckon that the Gulf's big funds could gain another $300 billion to manage this year alone. If you combine that with Asia's surpluses and the marvels of compound interest, you soon get to some large numbers. Simon Johnson, the IMF's chief economist, thinks sovereign-wealth funds will be worth $10 trillion by 2012. Mr Jen has pencilled in $12 trillion for 2015. But even at that rate of growth, the funds will probably still account for less than 3% of global traded securities.


Golden guano

The idea that governments should put something aside for a rainy day has a long and respectable history. Kiribati, a Pacific island country that mined guano for fertiliser, set up the Kiribati Revenue Equalisation Reserve Fund in 1956. Today the guano is long gone, but the pile of money remains. If it manages a yield of 10% a year, the $400m fund stands to boost the islands'GDP by a sixth. Many oil producers now run similar schemes for similar reasons. Today's windfall is too big to spend in one go at home without waste and inflation. It is wiser to save for times when oil prices are low or for the generations who will come after the oil runs out.

In addition, returns on a portfolio of assets are likely to be higher than on a single commodity. Chart 2 shows, for instance, by how much equities outdid oil between 1985 and 2007. Better for an exporter to sell as much oil as it can today and invest the proceeds, than to leave the stuff in the ground in the hope of spreading production over the decades. The recent run-up in the price of oil and other commodities only adds to the attraction of producing now while the going is good.

Commodities are not the only source of sovereign wealth. Many Asian emerging markets have been running current-account surpluses at the same time as they have been managing their exchange rates. As they have mopped up dollars, using government bonds, they have accumulated reserves. At first these went into safe, liquid assets like American Treasury bonds , the Asian financial crisis of 1997-98 was still a recent memory and many countries were keen to amass reserves. But economies like China, South Korea and Taiwan now have more reserves than they need to defend themselves against shocks. Their governments understandably want to earn a higher return than Treasury bonds will pay, so they create a fund to manage their assets.

Like other sovereign funds, these tend to invest government money, often abroad and for long periods, in relatively risky assets. Yet the funds do not only come from a wide array of countries; they also have a variety of motives. Norway sees its stash as a pension fund. Russia and Iran have stabilisation funds, to counter the volatility of energy prices. China and South Korea want returns , and possibly access to markets, ideas and technology.


Things that go bump

Whatever their motives, sovereign-wealth funds are sure to influence prices and markets. Mr Jen expects them to cast their money broadly across industries and economies. Hence they will buy assets priced in Japanese yen and emerging-market currencies; their governments' foreign-exchange reserves tend to be concentrated in dollars and euros. Mr Jen reckons about 40% of the funds' assets will be in dollars, compared with 60% of their countries' reserves. By contrast, he thinks a fifth of the funds' assets will be in yen, against just 2% of reserves.

As they spread their money around the world, sovereign-wealth funds will usually be greeted with open arms. Often, however, they will be treated with suspicion. Already, even as private-equity and hedge funds have retreated in the face of the credit crunch, they are being set up as the next villains of international finance.

For some, the nub of it is that governments are less interested in money than in power. Kevin Hassett of the American Enterprise Institute illustrates the worries by imagining that China bought Citigroup. What if America sought to take sides in a conflict with Taiwan and China and then threatened to shut the bank down? Or, less apocalyptically, suppose that Venezuela bought Alcoa and set about closing its aluminium smelters in the United States in order to move production to Latin America, as part of a strategy for development.

Others are worried for precisely the opposite reason: that the funds are interested chiefly in making money. This would not matter much but for the sheer size that some funds have now attained. They are big enough to shift markets , as the Norwegians and Icelanders discovered. The 21st century's successors to George Soros, who made a killing from sterling's ejection from the European exchange-rate mechanism in 1992, may not be a private fund-manager but the agents of foreign powers.

Yet, for all these imagined fears, it is hard to find examples of sovereign-wealth funds abusing their power. As with private-equity groups and hedge funds, the anxieties owe less to reality than to a mix of secrecy and suspicion. With a few exceptions, like Norway, which opts for disclosure, you cannot tell what a sovereign-wealth fund's objectives are, precisely how much money it manages and where it has made its investments. Already the funds use the full range of investment options, including hedge funds and private equity, which further covers their tracks.

Investing abroad for profit is hard enough: recall Japanese companies' bubble-era forays into Hollywood and New York. Running a business non-commercially is a recipe for huge losses rather than world domination: look at the history of France's Credit Lyonnais or China's state-owned banks. Criticism of sovereign funds' investments has by no means all come from recipient countries. China's CIC seemed to have scored when it paid $3 billion for a stake in Blackstone, a private-equity group that listed its shares. Today its holding is worth closer to $2 billion and CIC has been lambasted in Beijing.

All this raises the question of who has the upper hand on Wall Street now. Are the investment banks selling cheaply, out of necessity? Or have the sovereign investors been seduced by Wall Street hustlers?

There are benefits on both sides, but maybe the American side is happier. The investment banks are getting much-needed capital. Most likely, their new shareholders will want to stay around for a while , or will find it hard to sell a lot of shares quickly if they do not. And via the new investors, Wall Street may enjoy better access to emerging markets. Certainly, American politicians have been glad enough to see emerging-market governments bail out their banking system , with funds that, Mr Setser impishly points out, have been flowing faster than IMF aid ever did to emerging markets in crisis.


Keep out

Mutual admiration is not the rule. The first sovereign-wealth fund, the Kuwait Investment Office, created in 1953, ran into trouble in Britain two decades ago. In 1987 it bought more than 20% of British Petroleum, then recently privatised. The British government, headed by Margaret Thatcher, was in no mood to see so much of a national treasure owned by a foreign government , and an oil producer at that. Never mind the free market: the Kuwaitis had to sell more than half their stake.

In the United States more recently, controversy has centred on state-owned companies rather than acquisitive sovereign-wealth funds. The efforts of China National Offshore Oil Corporation to buy Unocal, a Californian oil company, in June 2005 roused opposition. And when DP World, a port operator owned by the government of Dubai, sought to take over P&O's business in America, which included terminals in New York and New Jersey, a huge fuss broke out about Arab ownership of strategic infrastructure.

Elsewhere, sovereign-wealth funds themselves have hit obstacles. In 2006 Singapore's Temasek sparked a row in Thailand by buying the family telecoms business of the then prime minister, Thaksin Shinawatra. Thais disliked Mr Thaksin's use of a loophole to avoid paying tax on the $2 billion his family raised in the sale. But they also objected to Temasek as a buyer, because it is owned by Singapore's government. Temasek has also had trouble in Indonesia, over stakes in two telecoms companies bought by firms majority-owned by Temasek. At the time, Indonesia, smarting from the Asian crisis, was grateful for Singapore's capital. Now that telecoms is thriving again, Temasek seems no longer as welcome. Wall Street's sovereign investors, take note.

Such examples point to the greatest reason for concern about sovereign-wealth funds: although the risk that the funds may abuse companies and markets is theoretical, the danger of financial protectionism is all too real. The idea that secretive foreign governments are up to no good exerts a powerful hold on the collective imagination. Nicolas Sarkozy, the French president, and Angela Merkel, the German chancellor, have both issued warnings. A former American official, speaking on condition of anonymity, says that Washington is even now in a state of "high alert". He thinks the public debate about sovereign-wealth funds is the prelude to action against them and that the "kindling is dry".

A broad, politicised hostility to foreign direct investment would come at a high cost. Such investment spreads financial capital, know-how and technology. It helps the world economy adjust to imbalances and gives countries stakes in each other's prosperity. By contrast, as the dispute over DP World showed, conflicts over one investment can rapidly become generalised to others , either directly or through bodies like the Committee on Foreign Investment in the United States, which weighs up the implications of takeovers on national security. That spreads uncertainty, which could even spill over into the trade of goods and services. The European Union, for instance, now wants such a committee of its own.

Even now, suspicion of sovereign-wealth funds comes at a price. The investments in Wall Street have helped to stabilise the banking system, making this an ideal moment for active shareholders to be crawling all over the banks, asking what went wrong in the credit crunch and how to prevent the next. Instead, the banks have taken on large, friendly, long-term shareholders who cannot easily kick up a fuss. If the new investors were to become disgruntled, they may find it costly to sell in a hurry. And most of the funds know that if they cause trouble, people in Washington will soon get to hear about it.


Sovereign guarantees

Moreover, a scandal of one sort or another is almost inevitable. With thousands of investments by hundreds of fund managers wielding trillions of dollars, someone, somewhere is going to do something corrupt or foolish. That is why it makes sense to minimise the risk of conflict now.

Last summer Clay Lowery, an American treasury official, proposed that the IMF work on a code of conduct for sovereign-wealth funds. It is devising a scheme to make them more transparent. Shedding light on their strategy and investments should ease suspicion. But transparency alone gets you only so far: it does not, for example, stop abuse or protectionism.

Hence the importance of the OECD, which is looking at how host countries treat sovereign investors. It can draw on existing rules that are already widely accepted. Most countries, for example, limit who can own banks, because governments often guarantee deposits and because confidence in banks underpins the financial system. Similarly, most countries curb ownership of defence technology and utilities. You do not need a handbook of new restrictions. And you do not need to make sovereign-wealth funds a special case: instead, you have clear, predictable rules that apply to everyone.

The hope is that both host countries and sovereign-wealth funds see that their interest lies in building confidence. The hosts stand to benefit from the funds' capital. Meanwhile the funds are ruled by the politics of the places where they invest. You are sovereign only at home; abroad, someone else wields the power.

That is one reason why the managers of sovereign-wealth funds say they want only minority stakes. It is also a reason for them to have modest ambitions. Joshua Aizenman and Reuven Glick, in a note for the Federal Reserve Bank of San Francisco, point out that with such large sums to invest the funds should chiefly aim to keep pace with an index, rather than to invest strategically. Sometimes that will make sense politically, too. The former official advises: "If you want to invest in the US, be boring...Try to look like everyone else."

Sovereign-wealth funds are large and growing fast. Secretive and possibly manipulative, they are almost designed to raise suspicions. That is why the chief threat they pose is of financial protectionism. And it is why today's grand rescue on Wall Street is likely to lead to a backlash in Washington tomorrow.


Further articles can be found here:

http://www.economist.com/node/15065731
http://www.economist.com/node/9549590

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#17
Hi iisterry,

Contrary to what you believe, I am very young. At least I hope 27 is a very young age. Maybe I am young and naive but well, the bright side is that I have more room to learn from my mistakes. At least, that's what I like to believe.

Now, to validate my earlier statement. My reply is divided into a Normative (What is) and Positive (What it should be) component.

Normative

First, let me say that when I saw your first post, I assumed that you were seeking a discussion on Temasek precisely for the assessment of how Temasek as a company has performed and by extension what an investor of Temasek would think. After all, you posted their numbers.

Now, as you have replied:
Quote:Hm.. Because it's our reserves? Policies are debated at the grassroots level and submitted for review at Parliament in a Democracy.

Analysing the company's performance will allow one to determine if the cost of the "fund manager" is too high. An administrative expense of over S$8 billion for an employee count of over 300 translates into almost S$20+ million yearly per individual. Excessive extravagance?

I'm pretty sure that I was right on my first point. If you truly feel that the reserves belong (at least, partly) to you, then as you have highlighted, it serves to make one feel aggrieved.

Firstly, because "your reserves" are being used in a manner that you disagree with and secondly, you can't do anything about it (at least not in the sense a normal investor could such as through voting against resolutions you are in disagreement with or cashing out). Technically, these won't apply because us citizens aren't the legal shareholders anyway.

On to my second point, if you couldn't do a thing about it in the way a normal investor could i.e. take your money from what you deem to be an unwise investment, then may I ask, for what purpose are we analyzing Temasek's performance for?

The most direct stakeholders in Temasek's performance would be its shareholders. Since us citizens are, by law, not Temasek's shareholders, I fail to see how this analysis of their performance would benefit us other than perhaps to instruct us on how-to or how-not-to run a fund.
Taking it one step further and this is where I may have jumped the gun with my statement, if we actually have no direct reason (i.e. we can take investment decisions from it) to analyse Temasek's performance, then the next plausible reason that comes to mind would be to use that assessment of their performance in order to make a point about the current status of Temasek as a SWF. In short, a political agenda.

On hindsight, I shouldn't have said "your political agenda", I should have said "one's political agenda" because the same line of reasoning would apply for anyone who undertakes an analysis of Temasek's performance and I shouldn't have brought the opposition party thing into the picture because when I think about it, you don't have to be in the opposition party to have a view on politics and it really is your entitlement to do so.

However, I like to highlight the statements you made later.
Quote:For a discussion on how a sovereign wealth fund can benefit the citizens, this should be a better forum to kick-start. Not TR, not CNA, not salary.sg or REACH for that purpose.

I've seen a few suggestions. One of them is to list the company and distribute the shares amongst Singaporeans. This can be in the form of non-transferable equities.

I find the idea that a citizen can own and partake in a country's economic progress through partial SWF ownership intriguing.

I do not doubt that the actual policy formulation is beyond the capabilities of this forum, but little droplets of water can amount to a torrential tide. No?

However I still do not find futility as a valid excuse. The incumbent will not hold on to power forever.

Nevertheless, analyzing how to restructure the SWF into bringing benefits to citizens without compromising operational principles will prove to be a mental exercise that can pose a challenge to the even the most "seasoned of forumner" here.

I'm not sure if the other forummers think the same way but from your posts, I get the feeling that this exercise is more a political one rather than a Value Investing one. Given that I made my comments even before you made most of the above statements, I'm pretty certain now that you had the political angle in mind whereas I was replying you from the Investing point of view.

Positive
Now, if we are to discuss things from "What it should be" point of view, then it's a different story. Without going through the numbers, my thoughts on Temasek are that:

1) You can't treat it as a plain and simple invest and get returns fund. On paper, SWFs may be there to manage our reserves but when you install people that are ex-civil servants without finance or business background to boot, you got to wonder why.

2) We know they made lousy international deals. That's been widely reported. Yet, they still have a pretty decent record to show for it. Why? Because of GLCs. So if you look at the whole picture, it's not that simple to judge their performance. Hypothetical example, if I'm a king and I have a son that I put in charge of the country's reserve fund. Say I then send my team of diplomats around the world to lobby for deals for companies that were set up using the fund. Can I then say that the fund's performance has been superior because of my son's performance? I'm not saying this is how GIC or Temasek works and I'd be happy if someone could enlighten us all but I'm just painting a scenario that is entirely plausible.

3) Temasek's sole shareholder is the Ministry of Finance, which legally means that us citizens aren't entitled to Temasek's profits. However, the government gets its money either by borrowing or through taxes so of course, many people say that if you trace it back to the source, citizens are by extension the shareholders. However, the system is such that it complies with the letter of the law so you can't fault it.
So I believe that the system is inherently wrong. The question is what can and what should one do about it?

I see the question has been floated on how can citizens partake in the wealth generated by the SWFs? Not that I'm against the idea (hey, if they throw $ into my lap, I'd take it) but let's be realistic about it. Policy formation is a tricky thing because you have to make the majority happy. And if the minority that gets left out happens to be media-savvy enough, that might generate momentum for them.

In sum I believe that this idea is a nice one to discuss and as many have pointed out, it is interesting to discuss and all but in my opinion, if you really want to make a difference, then all one has to do is:

Work hard, invest well and thus, make most government policies irrelevant in your life. If one's concern is about those who get left out by the system, then follow the first few steps, help yourself first, then help others.

As individuals, that's probably the biggest and most practical impact we can make.
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#18
Theoretically, SWF is benefitting the citizens indirectly by providing income to the government.
If the government is cleaned and corrupt-free, this mode of operation is probably the best since the money will be channeled to the citizens via infrastructure constructions, education and citizens' welfare.

I am not sure why anyone wants to cut up Temasek and makes every citizen a shareholder. Operationally, it is diff to allocate the share. Should Ah beng and Wee Cho yaw get the same no. of shares? Then, as Jon San had said, does future citizen entitled to the share too?

Besides that, if temasek runs into cash flow problem, can temasek call for a right issue and ask all Singaporeans to chip in? Wow... sure to topple the government...haha..

Next, if Temasek decides to buy Citibank, can the shareholders vote and object?
SWF needs to be nimble and if major decisions require half of the Singapore population to agree, it becomes a slow turtle.

Anyway, as many of them have commented, an analysis of Temasek is futile simply because there is no way to invest in it.

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#19
(30-11-2010, 05:10 PM)Jon-san Wrote: Pardon me for asking a silly question. When you say "distribute to singaporeans" and "non-transferable", how do we resolve the issues of people kicking the bucket, or newborns, or newly integrated FTs? Just curious. Or is it to be a one- time issue only? Kind of like how they did for NSS or ERS? Just a thought...

Well, that would be under the purview of the elected legislative. The idea would be to prevent unfair entitlement and to reward citizens for partaking in the economic growth of the country. There can be stringent criteria set up to allow eligibility.

(30-11-2010, 05:35 PM)arthur Wrote: I find this thread a very interesting discussion topic, one of the best thread I ever encountered so far.

Please allow me to post some articles to get everyone up to speed and fire the first round of discussion. If there's a need for more information, I would gladly help.

The amount of controversy that such topics gather always lead me to believe that most are genuinely interested, however self-censorship are practiced in lieu of the unspoken OB markers.

(01-12-2010, 12:06 AM)kazukirai Wrote: Hi iisterry,

Contrary to what you believe, I am very young. At least I hope 27 is a very young age. Maybe I am young and naïve but well, the bright side is that I have more room to learn from my mistakes. At least, that's what I like to believe.

Hi kazukirai, good to know that I am only slightly older and just past 28.

Your response still shows a slight apathetic slant. Politics permeate every facade of our life regardless of whether you are aware of it. Even by abstaining, you are indirectly partaking in it. However, that is not the focus of the discussion.

I pointed out the fact that the incumbent will not remain in power forever because I can feel that you believe your views/actions are oppressed by the ruling party and hence futile.

Non inclusion does not equate to automatic exclusion.

I disagree with your final 2 statements, however debating on it will only lead to further topic digression.

(01-12-2010, 07:25 AM)yeokiwi Wrote: Theoretically, SWF is benefitting the citizens indirectly by providing income to the government.
If the government is cleaned and corrupt-free, this mode of operation is probably the best since the money will be channeled to the citizens via infrastructure constructions, education and citizens' welfare.

I am not sure why anyone wants to cut up Temasek and makes every citizen a shareholder. Operationally, it is diff to allocate the share. Should Ah beng and Wee Cho yaw get the same no. of shares? Then, as Jon San had said, does future citizen entitled to the share too?

Besides that, if temasek runs into cash flow problem, can temasek call for a right issue and ask all Singaporeans to chip in? Wow... sure to topple the government...haha..

Next, if Temasek decides to buy Citibank, can the shareholders vote and object?
SWF needs to be nimble and if major decisions require half of the Singapore population to agree, it becomes a slow turtle.

Anyway, as many of them have commented, an analysis of Temasek is futile simply because there is no way to invest in it.

Ho Ching would beg to differ. Smile Last I heard, they are looking for sophisticated investors to partake. It is to be extended to retail investors at a later part.

http://www.asiaone.com/Business/News/My%...57918.html

It is a matter of time and discussion is on how to fine-tune it. Allocation could be in the form of preferred stocks which confer no voting rights and are non-transferable.

Some who are versed in digging up the numbers can would be able to see if it is a feasible idea. Our countries various expense ratios can be found in the AG's report to the President (I believe).

Temasek's FCF, OCF, EPS can be crunched to determine viability. GIC manages our reserves, not Temasek. Temasek was created to manage our GLC (government linked companies), its mandate has since expanded overseas.

Hence, I would not put the idea of Temasek generating direct returns for its citizens as to be too far-fetched?


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#20
Temasek's Y2010 report is here.

http://www.temasekreport.com/2010/docume...rt2010.pdf

I took a quick look at the numbers.

Asset Under Management has grown from 199.1 billion @ 2005 to 284.8 billion @ 2010 or approximately 7.5% annualized.
Selling & Distribution Cost is 5.318 billion or 1.87% of assets.
Admin Cost is 8.723 billion or 3.06% of assets. That translates to an average of $22,955,263 per employee in year 2010 (380 employee strength).
Other costs is 9.937 billion or 3.49% of assets.
A total of 8.42% for asset management. Or 9.27% if we include finance expenses.

I suspect annualized returns since inception appears to be high primarily because of the injection and sale of certain assets.

The expenses incurred appears to be extremely high.

On another note, SeaTown Holdings has been established.

Quote:We established SeaTown Holdings, a wholly-owned global investment company, with committed capital of over S$4 billion. SeaTown operates and makes its investment decisions independently, with reciprocal co- investment rights between Temasek and SeaTown. SeaTown is intended as a co- investment platform for sophisticated investors in the medium term.

So... any private investors interested?
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