20150510 PAP should provide more transparency on CPF investments

GIC has been investing CPF monies for 34 years but CPF members know next to nothing about its real performance.

CPF monies are supposed to be invested to generate sufficient retirement savings for members, not for concealing the total amount of government reserves.

PAP says that if our CPF monies are managed in a standalone fund, the guaranteed LOW interest rates would be unsustainable. However, Malaysia’s standalone EPF has has managed to provide a higher return to its members for 2 decades. Should our fund managers be paid multiple times their EPF counterparts to produce a lower return for CPF members for 2 decades?

The likely reason for the pooling of funds is to mask GIC’s real performance because there are too many wipeout investments by GIC. I have already highlighted a few here, here and here and obviously there are many more to be highlighted.

I would like to thank commenters who have stated the losses in those bad investments are insignificant relative to GIC’s assets under management. But the problem is nobody knows the exact market value of GIC’s investments.

Another CPF investment which has incurred massive losses – China Coal Energy Co Ltd.

There is no data for this investment prior to April 2011 but as could be seen from the chart below, GIC was likely to have invested in China Coal when it shares were trading above $10. After GIC had reduced its stake to below 5%, the balance shares were likely sold below $5.

Source: Financial Times

GIC is likely to have bought the initial 5% or estimated 200 million shares at HK$10. Selling them at HK$5 and below would have incurred losses (including forex) exceeding S$200 million. (I hope GIC could confirm the exact figure. I am basing this on GIC’s love for picking bottom and it is therefore unlikely to have invested at the IPO price of HK$4.05.)

Information for the transactions below.

PAP should not encourage speculation on GIC by offering all sorts of crap reasons to allow GIC to conceal its real performance from CPF members.

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