The Online Citizen

GIC report – ‘significant’ recovery but how much exactly?

GIC report – ‘significant’ recovery but how much exactly?
September 30
13:35 2010

By Leong Sze Hian

I refer to the report “GIC recovers losses from previous year, sees higher returns” (Channel News Asia, Sep 27).

It states that “The Government of Singapore Investment Corporation (GIC) said on Monday that it has significantly recovered its losses from the previous year.

No figures were given, but the comment came in its latest annual report for the year ended March”.

Imagine you ask your stockbroker,”how much money did I make last year?” – and his reply is “You have ‘significantly’ recovered your losses from the previous year, but I can’t give you any figures”!

What would be your reaction? How would you feel?

I find it somewhat puzzling and perhaps rather strange that the custodian of our reserves tells Singaporeans that we did “significantly” well, but sorry no exact figures for you.

Since its “significant”, why not give us the figure?

By the way, since we also don’t know what exactly were the previous year’s losses, how do we figure out how “significant” it was?

May I suggest that the GIC’s annual report be re-written or highlighted with parentheses (my emphasis) as follows:-

“In September last year, GIC said it had recovered more than half (how much exactly) of its losses (how much) then (when – for what period (s) precisely). GIC’s porfolio lost 20 per cent in Sing dollar terms (how come losses are in S$, whereas returns are in US$?) in the financial year to March 2009, compared to the previous year”.

Since the S$ has been strengthening against the US$ over the last 20 years or so, giving “its 20-year nominal average annual rate of return increased to 7.1 per cent in US dollar terms, compared to 5.7 per cent the previous year”, may be akin to “making the picture look brighter”.

So, what was the return in S$ terms?

Has the GIC always reported its returns in the past in US$ terms only?

Can you imagine the Bank of England reporting its returns in US$, without any mention in sterling terms?

Fund managers, sovereign wealth funds, etc, typically always report returns in annualised rates of return.

Whilst there is nothing wrong with reporting returns in “nominal average annual rate of return” or “adjusted for inflation”, the annualised rate of return should not be omitted altogether.

As to “adjusted for inflation”, are we talking about the inflation rate in Singapore, United States or the world, against the US$ or S$ return?

To illustrate this point with an example, if Singapore inflation is used against US$ returns, then the return may look better, because historicial inflation has been relatively lower in Singapore compared to say the United States.

As to “This is the third year that GIC with investments valued at over US$100 billion or about S$132 billion is releasing its annual report”, what does “over US$100 billion” mean? – US$101, 110, 150, 190 billion?

With regards to “The sovereign wealth fund said its real rate of return, adjusted for inflation, was 3.8 per cent, up from 2.6 per cent a year ago”, global equities (MSCI World Index) increased by about 60 per cent from around March 2009 to around March this year (GIC’s report end date is 31 March this year). Global equities increased by about 80 per cent from the 9 March 2009 low point of that year to the high point of this year in April.

Whilst I do not have the exact numbers for an exact time period comparion, it is customary for fund managers to report returns against a benchmark.

In fact, both GIC and Temasek had compared its losses during the recent financial crisis to global equity indexes.

In other words, if we compare ourselves to global equity indexes when we suffer losses, we should also do the same when we make gains, so that there is some consistency in benchmarking returns and performance.

So, what benchmark is GIC using to report its returns now?

In respect to “So its “portfolio is in good shape” now” – compared to what? (benchmark?), to whom (other sovereign wealth funds?), by exactly how much?

“GIC said it will continue to own 3.8 per cent of stocks in Citi and 6.4 per cent in UBS. It added that as a long-term investor, it is prepared to stay with the two institutions because they have weathered the financial crisis and have returned to profitability” – This begs the obvious question – how much has GIC lost on these two stocks and when will they ever “return to pofitability” for GIC?

Whilst almost all fund managers report their annualised rates of return from inception, and for various time periods like 1, 3, 5, 10 and 20 years, I am unable to find these information in the annual report.

The financial regulations in many countries also require such similar reporting standards.

I am also unable to find any detailed financial statements in the 53-page annual report.

By the way, did the Government make any injections of funds into GIC last year, or in previous years?

If there were injections of capital in the past, is there a need to adjust the reported rates of return, or are they (if any) already reflected in the reported returns?

Does GIC  stand for ‘Give Information Cannot’?

  • Fugazzi

    In a one-party rule or govt all one is going to get is truth-sounding lies.
    There are so many instutions and organsations under the purview of the incuments and just visualize and one would shudder at the thought(s) of transparency and accountablility.
    This wishing, wanting wondering and … utter waste of time and energy. Change the political landscape thru wise voting and a semblance of transparency …. may come about.

  • Ho

    Perhaps GIC made alot by buying Singapore properties, working in cahoot with HDB to bully the people.

    These people cannot survive out there. they can only do well in a monopoly or protected environment.

  • VB Boleh

    Thanks Mr Leong!!…but i think this will take more than 56 man-years

  • Popcorn

    Would be grateful if Peter Ng could give a breakdown of the total losses incurred in UBS notes, Citigroup and the manhattan property, and the gains recovered in whatever dollars, and let the public see in concrete terms how much the losses are recovered.
    Vague and ambigious figures would be a blank to daft citizens like us.

  • andrew leung

    GIC is Government Incompetent Corporation.

  • Legion

    It only take 01 day to change a government.


  • iamtheGICbullshitman

    you meant we got back the $3.6billions from thaksin and the socalled $20 billion$ from the europeans/usbanks…
    wah in 1 ear GIC makes over $20 billion$?
    if liked that the peasant must be in line awaitin a rainfall…
    than again no $9000 charkwayteow bonus
    onLEE $300 free medisave bonus…

  • joker

    GIC stands for Goodbye Investment Corporation

  • Ang Kong Kia

    Perhaps it will take some 50 man-years to provide accurate figures.

  • foc

    They also never tell us if there were capital injections.

    Also, imagine you lost 50% in your 1st year.

    And you made 80% in your second year.

    You effectively lost monies over the 2 years. (1-50%)*(1+80%) = 90% of the initial amount.

    But the average return is -50%+80% = 30%.

    Average return is not significant at all.

  • fpc

    What I meant was you only had 90% of the capital invested after 2 years.

    meaning you lost money so what if the average return becomes positive.

    Another smoke screen.

    A cheap attempt to feign that they worked hard to no clear deliverables.

  • fpc


    yeah, your suggestion makes this article a lot more interesting…

    what a joke!

  • masterservant

    Yes, we will have dubai,ireland, iceland, “REVISITED”.

    Have you seen Andy Xie’s report on property in china.

  • RED-man

    Maybe they made a handsome profits of 200 billions peanuts, since there is a bunch of monkeys running the show.

    Btw, where have all the pro-PAP go? It is time you come out to defend your beloved monkey king!

  • http://Website(optional) Yamamoto

    Come on, just think of it…if it is such a great figures, they would have announce it right…by not announcing it, it means they have something that shouldn’t be revealed as it will make them look bad…

  • georgia tong

    They are just trying to make GIC looks good since election in round the corner.

    Everything thing reported is to be taken with a pinch of salt.

  • David

    There are only two possibilities why GIC made “substantial gain”.

    1 By making Singapreans poorer
    2.Say something good (even if it is a
    lie) to path way for the coming

    If No.2 is not true, than why afraid to justify it with figures.

  • preston loon

    Dear RED-man,
    I want to make it clear that i am no PAPer.Some of you are correct to say said that election is coming and that is the whole point for the PAP;To save the best for the last.It is a political ploy to hit back at those skeptics like you.Be smart and be ahead of the political game.

  • theforgottongeneration

    This is standard of our journalism and meritocratic civil servants.

    Let MSK escaped, no heads rolled. Then now M’sia caught and handing him back to S’pore, it is a “significant recovery” also. Home minister didn’t get sacked but instead now can justify a fat bonus!

    Likewise, why should there be a significant recovery if there is no significant losses? Yes, can say no investment is 100% risk-free, that it was due to global recession, blah, blah, etc… but what is the basis of comparison reference? If not mistaken, GIC/TH made losses in some foreign banks while other SWFs did not. So, question is did other SWF also had significant losses during the global recession and how much they have recovered. If they lost say 10%, while GIC/TH lost 30%, and then they “recovered” 30% while GIC/TH “significantly” recovered only 20%, this would be a better basis on the SWF competency. What is the “recovery” is due to injection of funds/assets rather than real capital gains? These should be the follow-ups that a good journalist should be leading, not just parroting the garhem statements. Ah, WTF.

  • Cpt

    it a lot of secret in lky closet. It is difficult for his members to release actual data to the public. in the first place they are not answerable to public? Every GE just a walking over event and public holiday.

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  • xtrocious

    It’s just a play on words…

    From S$1 to S$0.20, it’s a drop of 80%

    But from S$0.20 to S$0.60, it’s a SIGNIFICANT jump of 300%

    So if you add the 2 together and average them, the return is still 110% no?

    Nope, in reality, you are still out of the pocket by S$0.40, or 40% of your original investment…

    Like that I also can join GIC :p

  • s Land Murcielago Loot

    Most singaporeans i know, since 20 years ago to now, they dun give a fuk about the truth.

    1st world, needing so many talents.
    that explains.

  • iamtheGICbullshitman

    preston loon
    ;To save the best for the last.It is a political ploy to hit back at those skeptics like you
    you meant like disbandin ALL grcs and make 1 GIANT grc perhaps?
    ow bout savin co$t as well..
    you nkow kicked out all the deadwoods mps
    roped in hoching(asia most powerFOOL 6 women) whitehair son/2nd mitrained son/sister/brother mrs harryLEE(wheelchairbound with oxygen tank also can what) uncle and goodfriend the wouldbe paster blogger…

  • Jackson

    I agree with the article. GIC must provided statistics that support their assertion. If not, it is unacceptable for the public.

  • Vote For Change

    They are saying empty words.
    They can fool the then naive 1965 generation, but not the now generation.

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  • Harry Selamat

    Is there an industry for accounting professionals to do audit work in the near future?

  • Josephine Yeo Kwang Yew

    “It states that “The Government of Singapore Investment Corporation (GIC) said on Monday that it has significantly recovered its losses from the previous year.

    No figures were given, but the comment came in its latest annual report for the year ended March”.


    Dear Author Leong,

    As long as the well travelled, highly educated , apparently materialistic and smart looking singaporeans majoritily Accept the Report, what can you do?

    As long as people do not demand for the figures, what can you do?

    As long as such 1st world citizens just TRUST the reports, what can you do?

    1st world man!

  • Wee Leng Chee

    Does singaporean adults behave differently than western 1st worlds counterparts when it comes to questioning political issues?

    YES or NO?

    That is the Naked Truth all of you have to face.

    How 1st world are you materialist people?

  • elmo

    if there is really better return, then give us better return on our cpf.

  • mice is nice

    anyone remember MBT’s (HDB) reply on transparancy?

    what one govt body does, others follow.

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  • wrong focus

    Mr Leong, the fact is, even if figures are not revealed, the majority people have always been able to accept.

    are the people the stakeholders?

    case closed.

    1st world!i think other 1st world citizens may become like this, learn from super advanced 1st world citizens of spore

  • hoosiers

    Dear Mr Leong, this is obviously meant for mass consumption only..not intended for financial crunchers like your goodself, so I guess got to take it with a pinch of salt..

  • VoteForChange

    They know we can be hookwinked(afterall,it’s for decades that they’ve been manipulating us n doing such dirty tricks),and it’s up to true blue S’poreans to really put aside any fear and apathy to stand together and address these seemingly insurmountable situations.We must hasten our resolves or there might be no chances of remedying such problems facing us and our future generation.Stand together and vote together for the common good of one and all!!!!

  • V.F.C

    They can run, but they cant hide…for very long.

  • walamak


    if got gain/recovery
    can cpf $ take out fully at 55?


  • Simon

    Mr. Leong,

    Point of clarification,the custodian of our reserves is actually none other than elected president Mr Nathan,and for which he is beibng paid S$3millions + per year.

    As far as I know,this custodian of our reserves has never ever made any report to us about his appointed duty.
    The manager appointed as manager of our reserves reported on this slight improvement,but hinted that you do not need to know so much,even we know that these are yr money

  • Tulan

    The Press -si -dent —is a “Dog” for Pappy –what more to say ???

  • nihon

    this grc report is a pack of lies, singaporeans have been lied to, cheated n abused since day 1. lky – if i have a choice, i will prefer to run sg without elections.

    what elections? win by cheating thru grcs, playing with boundaries, buying votes, unfair reporting/lying, corrupting independence of public institutions, lky – i make no apologies that pap is singapore n singapore is pap.

    we have the power to change, sack the good for nothing gomen.

  • championgrumbler

    How much is significant? 70% – 90% can be considered significant as well. Say, GIC recovered 80% of total losses, there’s still another 20% yet to be recovered. 20% of S$58 billion would be S$11.6 billion.

  • http://na Little Nonya

    Once again Mr Leong has highlighted an important issue which concerns public interests and the well being of our nation.

    Yet, while there are some who justify their claims about their interests as citizens when criticising alternative viewpoints, even if the host is not Singaporeans, failed to take our Government into account for the lack of accountability and transparency in the report of our RESERVES managed by GIC & Temasek.

    Such hypocrites.

  • Bernard Chan

    Don’t ask so much, just trust Lee Kuan Yew, period. Nothing will go wrong.

    “Trust and obey for there is no other way, just trust and obey.” The new Singapore Pledge.

    10,000 years old to MM Lee.

  • Fugazzi

    In a one-party rule – you are not going to get true answers. One may cajole, chide, exhort and even plead – nothing doing.
    When a govt or any govt for that matter influences and controls the media – independence of ….(add on), is gone for good.



  • DareToAct

    Perhaps our esteemed $4 million a year President, who is supposed to be our guardian of reserves, should demand the answer and tell the rest of us?

  • Slowly cooked Frogs are the most useless beings on earth

    Based on the title of this article, I like to question why people can accept not KNOWING the Exact answer or something clear and concrete?


  • Speculator

    The money for investment is your money and not their money. Everybody say greed is good, but now it has become legal and speculation is the Mother of Evil. All these factors form the global economy bubble.At the end of the day, nobody is responsible.

  • NinjaGenaration

    After the massive loss, many ppl fall into the ninja genaration, “No Job, No Income, No assets”, only have a lot of hopes for an unclear future.