South China Morning Post Questions Temasek Returns

[makapaaa]

[h=2]South China Morning Post Questions Temasek Returns[/h]

August 2nd, 2012 |

Author: Contributions

"If you were a private investment fund manager with this sort of record... you would be venerated as a deity."

Yesterday I received an email from a loyal reader that Jake van der Kamp, the well known columnist from the South China Morning Post wrote a column questioning the returns of Temasek. Though I can’t find an ungated copy of the column and can’t repost the entire column, he makes a couple of great points about what Temasek is claiming:

“If you were a private investment fund manager with this sort of record, you would have every investor in the world getting down on his knees to you and bowing every time you showed your face in public. You would be venerated as a deity. The world would be at your doorstep asking you to manage its money.”
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Investors today are lauded for much smaller returns much less keeping up 17% for 38 years. I have been unable to find anyother investor that claims to have earned a similar return over a similar time frame. Furthermore, I cannot even find Temasek companies that earn the rates of return claimed by Temasek!!
He goes on to say “And if Temasek’s touted total shareholder return is much, much higher than the overall Singapore market’s, it exceeds that of foreign markets by an even wider margin. If it’s a stretch to get to 17 per cent in Singapore investments since 1974, we are looking at new properties of the elastic band to see it in markets abroad.” In other words, if Temasek beat the Singaporean market by such a wide amount it must beat foreign markets by a similarly large amount.
However, as he notes:

“And then you get that byword for loss, Chartered Semiconductor, Singapore’s foray into the wafer fab business. Temasek finally rid itself of this deadweight but its loss in chasing yesterday’s technologies tomorrow was likely in the billions… Also timed injudiciously were investments in Merrill Lynch and Barclays Bank. The timing of the exits from these acquisitions was equally injudicious. I cannot quantify the losses, but informed opinion generally agrees the figure ran into the billions.”
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This means that Temasek’s winning investments must have earned significantly more than 17% annually since 1974 to produce the types of returns they are claiming. These are simply fantasy level returns.
Given that the South China Morning Post has now broken the cone of silence around questioning Temasek and Singapore, I wonder if others in the major press outlets will also begin to question Singaporean numbers?
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Christopher Balding
* The writer is a professor of business and economics at the HSBC Business School at the Peking University Graduate School. An expert in sovereign wealth funds, he has published in such leading journals as the Review of International Economics, the Journal of Public Economic Theory, and the International Finance Review on such diverse topics as CDS pricing, the WTO, and the economics of adoption and abortion. His work as been cited by a variety of media outlets including the Wall Street Journal and the Financial Times. Prof Balding received his Phd from the University of California, Irvine and worked in private equity prior to entering academia. He blogs at http://www.facebook.com/baldingsworld and http://www.baldingsworld.com.
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Editor’s note: South China Morning Post is a leading English-language newspaper in Hong Kong.
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[mscitw]

Please do not forget Peasantpore is ruled by a typical Asiatic regime, hence fudging the figures is expected. The Master in this arcane art is still the PRC Commies, Peasantpore is still learning from them but thanks to the low quality peasants, they are usually fleeced but the slightly smarter Ang Mohs are not taken it.

Why?

The Brits got rid of god kings at the earliest possible date and the other ang mohs followed suit with the drunken Rossies who shot their Tsar much later. The Chinks suddenly woke up and deposed the inept Manchus but now many of them are worshipping foreign deities. You see, indolent Asiatic cultures are always finding new deities and kings to kowtow.