Temasek is seen as the richest book smart kid in fund management and has been taken for a ride by foreigners. Billion-dollar investment losses are not only downplayed in the local media but Temasek is portrayed as bestest fund manager in the universe.
However, many Singaporeans don’t share the official view of Temasek because it engages in selective transparency.
Even ordinary Singaporeans now feel they are qualified to manage our reserves at our 40-year-16%-returns SWF. A real imaginary conversation (below) was overheard at a local coffee shop.
Ah Kow: Bro, how about we go apply to be fund manager at Temasek. Wa lau, they every year making more and more money but how they make, no one suppose to know.
Ahmad: Better don’t anyhow say or the government will sue you until you tak boleh tahan. I don’t want to get into trouble OK. If lose my job, HDB 30-year loan cannot pay, Workfare also habis then who take care of my family?
Arumugam: “Mat, actually Kow is right. I read a lot about Temasek online and many investments actually underwater. Recently, one ordinary Singaporean keep critising Temasek and they keep quiet. So this guy must be correct man.
Ah Kow: I also heard most of their investments in banks sibei jialat, underwater and worse than NOL. Since Arumugam got bring his laptop, we can confirm if this is true or not.
(Turning on his laptop) Arumugam: OK, wait a minute … by chronological order in Wikipedia first one is Bank Danamon in Indonesia.
Image @ FT.com
Ah Kow: Bang, now you believe I tell you we can be fund manager, right? This type of investment got make 16% returns meh? Like that my grandmother can be MMA fighter leow.
(now smiling) Ahmad : Now I understand what you mean. After 12 years, rupiah collapse 50% and shares also going nowhere. I think I can do better. Ha ha.
Arumugam: Not only that, you see the shares actually going down from 2010 and then suddenly cheong in 2012 because why? Temasek portfolio company, DBS, make offer to buy la. What a joke. Temasek’s head swell lagi big with Indo newspaper headline “Temasek scores big payout with Bank Danamon sale”.
Ah Kow: Wa lau eh, I think going to score own goal in 2016 la. Temasek is like PAP – always want to control and self praise so much. But as major shareholder controlling the bank still cannot perform well is really a disgrace.
Arumugam: Now we take a look at the next bank which Temasek also controls but bleeding taxpayers – NIB Bank in Pakistan. This one it has invested about S$1 billion for 1 decade and also got one Roland Teo Cheng San as director since 2011.
Ahmad: Like that I really must give up my delivery business and go Temasek to apply tomorrow. I can do better la – look at my Singtel investment is better than this peng san bank. Ha ha.
Ah Kow: Knn, I never know Temasek got this type of investment. Make money one, all advertise in ST and BT. Lose money, say for long term. Like that also can meh??
Arumugam: OK, you look at the net income and you will think the aim of this bank is to lose money.
Ahmad: So we only kena stuck with 2 banks right?
Arumugam: Hello! You don’t know Temasek kena jinxed? Bureaucrats trying to act like big time fund managers sangkut with only 2 underwater banks?
In 2006, Temasek bought almost 12% of Ang Mo bank, Standchart, with money like drop from the sky. After 3 rights issue and almost S$15 billion invested, excluding dividends, look at where we are now (chart below).
Ah Kow: Shitty Times say we kena forced to spend S$1.1 billion on the latest rights issue. Garment lousy investment can close both eyes throw one billion tax dollars away but when time to help the people, must go pariahment argue over peanuts. Pui! Bloody disgusting.
Arumugam: Nothing new leh, why you so angry. If I show you some more, don’t kena heart attack OK?
Ahmad: Temasek think other investor all bodoh but the really BODOH one is Temasick. Ha ha. But sorry, cannot laugh because in the end, it’s all OUR money.
Arumugam: From July 2007 to Dec 2008/Jan 2009, our ‘long-term’ investment in Barclays lost about S$1.5 billion in 18 months.
Ah Kow: Wa lau, Temasek think can just spend billions like go shopping and buy good businesses? If so easy, I ask my wife join Temasek cause she also like shopping.
Arumugam (sigh): But that’s not all. Around the same time, Temasek lost US$4.6 billion in 18 months on another investment, Merrill Lynch. This was sold to Bank of America.
Ahmad: So people say they just tikam-tikam and buy when market fall is right. If shares go up, Shit Times will praise them. If market go down, then PAP will say keep for next generation cause it’s long-term investment.
Ah Kow: But news also say Temasek got other investments in Indian banks make 100% gain or more, right?
Arumugam: They are right but that’s only half the story to make Temasek look good. They don’t mention the currency loss of up to 50% since 2004. How come the currency of a well managed country can drop like a stone? Should Temasek invest billions in corrupt countries?
Arumugam: All investments before 2014 must take into account forex losses. If Temasek invested in 2004 and divested in 2013, forex losses could reduce its capital gains by up to 50%. For example, buy Bank A shares at 100 rupees and sell at 200 rupees, the profit is actually zero because 200 rupees got to be reduced by 50% due to exchange rate loss.
Ah Kow: But Temasek maybe got buy insurance for foreign currency?
Arumugam: You think so when the CEO likes to take risk? Temasek is looking to make a killing in the stock market to make up for other investments with steep losses.
Arumugam: The danger now is our investments in Chinese banks where they practice accounting gymnastics – bad debts and NPLs keep piling up the last few years but no one really knows what’s happening. From Temasek’s track record, billion-dollar foreign investments mostly lose big time.
Ahmad: If kena rights issue like Standchart, then where is money coming from?
Ah Kow: I think GST will increase and money of course come from taxpayers la. You think from PAP pocket meh? Taxpayers also pay PAP salaries you know?
Arumugam: Government said losses all made up by investment gains already but which are the good foreign investments making up past losses? Temasek cannot even clarify with the public because foreign investments are not performing as well as it claims.
Ah Kow: Ya lor. Anyhow say make 16% or 18% long term returns without proof everyone also know. Ha ha.
Ahmad: Lucky got a friend like Arumugam understand finance so much. He should replace botak as finance minister instead of Minister Heng some thing.
Ah Kow: I think Temasek should employ Ahmad and me as fund managers even though we are ITE graduate only. Aru can be director cause he got finance diploma. Ha ha.
Arumugam: I hope more citizens know and start to believe our reserves belong to every citizen and not PAP. The people must first demand transparency so that PAP cannot suka suka do whatever they want. OK, I want to tell you more about Temasek, especially the investments in 2007. Maybe next time cause it’s a bit late and we should get going…