By Leong Sze Hian
According to Creative Technology's (CT) annual report, Holland-Bukit Panjang Town Council (HBPTC) was listed as one of the majority shareholders with 530,000 shares currently valued at about $3.2 million. I understand that CT's share price from 2003 to 2007, has ranged from a high of $27.30 to it's current price of $6.10 on 12 October 2007.
According to CT's Statistics of Shareholding as at 19 August 2005, HBPTC held 200,000 shares. The CT high price for fiscal 2005 and 2006 was $27.20 and $14.40 respectively. Does this mean that the 200,000 shares could have cost as much as $5.4 million?
When did HBPTC purchase its CT shares, and at what price?
If it had held its total holding of TC shares on 1 July 2006, I believe it would have been valued at about $6 million.
According to HBPTC's annual report, it had $8.4 million of quoted equities on 1 April 2005.
If this is the case, does it mean that it accounted for about 70 per cent of HBPTC's total quoted securities portfolio of $8.4 million?
If the above assumptions and timelines are correct, why is its quoted securities portfolio so apparently non-diversified?
Isn't diversification the key principle of prudent investing?
What guidelines do town councils use in investing their residents' funds?
Another question which needs to be asked is: What are the profits from such investments used for and have they ever been used, since town council funds keep growing to more than $1 billion now? Perhaps the town councils should include this in their annual reports and make them public.
When we last checked, only 6 out of the 16 town councils have their annual reports easily available on their websites. Why are the reports of the other 10 town councils not available on their websites?