Temasek’s 10-year rolling returns at 10-year low?

I refer to the article “Temasek’s net portfolio value hits record $275b” (Straits Times, Jul 12).

It states that “This measure includes dividends paid to its shareholder, the Finance Ministry, but not capital injections from the ministry. Temasek’s shareholder did not make any capital injections in the last financial year.”

According to the chart in its report – the 10-year rolling returns for the last 10 years is at a 10-year low of four per cent.

What was the return with “boost” assets?

According to Temasek – “From 2002 onwards, the performance of this portfolio of earlier Temasek assets is free from the “boost” afforded by such listings and continued to perform well relative to the markets, showing annualised returns of 11% in SGD terms from 31 March 2002 to 31 Mar 2012″ – why isn’t the annualised return (after adjusting for this “boost”) given, so that one can have a better understanding of what the 15 % annualised return would be reduced to without the “boost”?

The Government, which is Temasek Holdings’ sole shareholder, had said in 2014 that the capital injection then did not include proceeds from the Special Singapore Government Securities (SSGS), which are instruments that the Central Provident Fund (CPF) Board uses to invest Singaporeans’ CPF savings.

According to the Government in 2014 – Temasek Holdings does not manage any CPF monies.

It is understood that it was the first time that we had disclosure as to where exactly the capital injection into Temasek Holdings came from.

But if this was the case – why?

Transparency sometimes only?

In the 10 years to 2014, the Government had injected capital into Temasek Holdings a few times. For example, in Temasek Holdings’ 2007-2008 financial year, the MOF pumped $10 billion into the company and in 2011, the Government put in a further undisclosed amount to fund the joint venture between Temasek and Malaysian state investment firm Khazanah Nasional.

Why is it that we have partial transparency? At times, we have announcements that state the sum of the capital injections made by the government, while at other times this figure was not stated.

Also, did any of the capital injections from the past say exactly where the money came from? The clarification in 2014 by the Government stated that the $5 billion injection did not come from proceeds of the SSGS, proceeds from government land sales in Singapore, government budget surpluses, and proceeds from SGS? Did we get this clarification only because there was then renewed public interest in CPF funds?

In addition, how do we know for sure that Temasek Holdings’ capital injections before the Government of Singapore Investment Corporation (GIC) was formed, never came from CPF funds since Temasek Holdings started about 7 years before the GIC was formed?

CPF funds were first co-mingled with the rest of Government’s funds?

According to the Government, the Government pools the proceeds from SSGS issuance with the rest of the Government’s funds, such as proceeds from the tradable Singapore Government Securities (SGS), any government surpluses as well as the proceeds from land sales.

The Government said that the commingled funds were first deposited with the Monetary Authority of Singapore (MAS) as Government deposits. MAS converts these funds into foreign assets through the foreign exchange market. However, a major portion of these assets are of a longer term nature, and are hence transferred over to be managed by GIC.

More than $35b injections into Temasek – You sure none from CPF funds?

Although the reports state that the SSGS proceeds are not passed to Temasek Holdings for management and it manages its own assets which do not contain any CPF monies, Temasek Holdings pools its assets with the rest of the Government’s funds. So, how do we know for sure, especially in the early years, as to whether the Government’s injections into Temasek Holdings did or did not include CPF funds?  As of 2014, a total of $35 billion plus an undisclosed sum in 2011 were put into Temasek.

Why did it take 49 years (in 2014) for Singaporeans to be told exactly where their CPF funds have gone to, and was managed by whom?