The ST should be careful on how they report their facts. Lest they become even more unreliable and independent.
The title of the article states unquivocally that "No bonuses for Temasek staff". Now there is nothing unclear about "No bonuses" is there? Well when you read on you will discover that a Temasek employee's bonus is drawn from a pool that is paid out over a number of years. When the company does well, the pool gets bigger and the individual's share along with it.
Hence when Ho Ching announced "negative bonuses" it could either mean each employee will get no money from the pool, or the value of the overall pool shrinks. With the latter, negative bonuses means less bonuses and not no bonuses.
The reason why i think it is more likely to be the latter is because of Ho Chings own words: "It is a tough challenge to share negative bonuses". You can't share zero but you can share less.
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July 30, 2009
No bonuses for Temasek staff
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_410035.html
THE entire staff of Temasek Holdings are taking personal financial hits, with annual bonuses likely to be slashed in the wake of the investment firm's losses over the past year.
Part of every Temasek employee's bonus goes into a pool that is paid out over a number of years rather than at the end of each year.
When Temasek meets its internal performance benchmarks with higher-than-targeted returns, the pool of bonuses to be distributed grows and each employee gets a bigger slice.
But when it fails to do so, employees get 'negative bonuses': They get no money from the pool, or the value of the overall pool shrinks.
This compensation structure is based on a key principle of having staff 'share in the institution's performance, both for positive and negative results', said chief executive Ho Ching yesterday.
In her speech at the IPS Corporate Associates Lunch, she said: 'We share gains and pains alongside our shareholder. This is in essence having an owner's approach to our business and operations.'
Temasek came in below its targets last year as well as this year, which means staff get 'negative bonuses'.
'From CEO to office attendants, all our staff were allocated negative bonuses last year, and will be allocated more negative bonuses this year,' said Ms Ho.
If Temasek achieves above-target returns, known as Wealth Added and reported in the annual Temasek Review, it will have gains to share with its staff.
'It is a tough challenge to share negative bonuses...it is even tougher to deliver a positive Wealth Added every year,' she said.
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Showing posts with label temasek. Show all posts
Showing posts with label temasek. Show all posts
Thursday, July 30, 2009
Sunday, June 21, 2009
Losing touch and sense of proportion
While Temasek is losing its investment touch, Alvin Foo of the ST is losing his sense of proportion and reality (as you will see from his article attached below). With great conviction it is declared that Temasek out performed nearly very index and person worth noting (Buffet no less), but it comes with a caveat: "assuming the value of its portfolio remained unchanged since November last year".
What value is there in making a comparison for a 10 yr period that ends in March 2009 when the data is only updated to November 2008??
It is also quite convenient that the period of comparison ended at march 2009; a period that many analysts consider to be the bottom of this economic downcycle. Temasek's recent investment disasters were offload either prior to or during this period. This meant that they did not benefit from the vicious rebound since the march lows to date. Would Temasek still beat the street if the months of april to june were included? It probably would if you continue to only consider their holdings as of Nov 2008.
The first 3 months of 2009 were torrid times for ALL investors, including Buffet that earnestly came out and declared he had make big investment mistakes in late 2008 and apologised to his sharehlders.Did Mdm Ho make such public apologies for her countless blunders? No. She had no regrets and picked up an award for it.
We must also understand that Buffet's Berkshire Hathaway is unlike Temsasek which has constant captial injection (tax payers money). This naturally puts Temasek at an advantage as we all know the market moving power of big money. And without fear of losing this captial injection, Temasek can basically throw caution to the wind and place their bets at the roulette table knowing full well that their chips will be replenished every month at a rate of 33% of gross salary.
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_392459.html
SINGAPORE investment agency Temasek Holdings may have taken a hit recently on some of its high-profile banking investments, but over the longer term it has outperformed key global benchmarks.
Figures obtained by The Straits Times show that over a 10-year period to March this year, Temasek outgunned several closely-watched equity indexes.
It also beat other notable long-term investors such as Berkshire Hathaway, a top US investment company headed by billionaire Warren Buffett.
Temasek's performance has come under scrutiny in recent months after it suffered significant losses earlier this year on investments in Western banks Barclays and Bank of America (BoA).
The state investment house delivered an annualised total shareholder return by market value of 5.4 per cent from March 1999 to March this year, assuming the value of its portfolio remained unchanged since November last year. That is the date of the last available update of the value of its investments.
This compares with a return of 4.5 per cent in the same period for the MSCI Asia Pacific excluding Japan index, 3.1 per cent for the MSCI Singapore index, and -3 per cent for the MSCI World index, according to figures obtained by The Straits Times.
MSCI indexes are key indicators commonly used by institutional investors to see how well they are doing relative to the market.
Temasek's main investments are in stocks, with the bulk of its assets in Singapore and Asia, so these indexes are regarded as a useful gauge of its performance.
Temasek's returns were also better than that of long-term investors like Swedish investment firm Investor AB, which delivered 3.7 per cent, and Berkshire Hathaway, which yielded 0.7 per cent.
Last month, Finance Minister Tharman Shanmugaratnam told Parliament that Temasek has performed 'respectably' compared to relevant market indexes and reputable institutional investors.
What value is there in making a comparison for a 10 yr period that ends in March 2009 when the data is only updated to November 2008??
It is also quite convenient that the period of comparison ended at march 2009; a period that many analysts consider to be the bottom of this economic downcycle. Temasek's recent investment disasters were offload either prior to or during this period. This meant that they did not benefit from the vicious rebound since the march lows to date. Would Temasek still beat the street if the months of april to june were included? It probably would if you continue to only consider their holdings as of Nov 2008.
The first 3 months of 2009 were torrid times for ALL investors, including Buffet that earnestly came out and declared he had make big investment mistakes in late 2008 and apologised to his sharehlders.Did Mdm Ho make such public apologies for her countless blunders? No. She had no regrets and picked up an award for it.
We must also understand that Buffet's Berkshire Hathaway is unlike Temsasek which has constant captial injection (tax payers money). This naturally puts Temasek at an advantage as we all know the market moving power of big money. And without fear of losing this captial injection, Temasek can basically throw caution to the wind and place their bets at the roulette table knowing full well that their chips will be replenished every month at a rate of 33% of gross salary.
http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_392459.html
SINGAPORE investment agency Temasek Holdings may have taken a hit recently on some of its high-profile banking investments, but over the longer term it has outperformed key global benchmarks.
Figures obtained by The Straits Times show that over a 10-year period to March this year, Temasek outgunned several closely-watched equity indexes.
It also beat other notable long-term investors such as Berkshire Hathaway, a top US investment company headed by billionaire Warren Buffett.
Temasek's performance has come under scrutiny in recent months after it suffered significant losses earlier this year on investments in Western banks Barclays and Bank of America (BoA).
The state investment house delivered an annualised total shareholder return by market value of 5.4 per cent from March 1999 to March this year, assuming the value of its portfolio remained unchanged since November last year. That is the date of the last available update of the value of its investments.
This compares with a return of 4.5 per cent in the same period for the MSCI Asia Pacific excluding Japan index, 3.1 per cent for the MSCI Singapore index, and -3 per cent for the MSCI World index, according to figures obtained by The Straits Times.
MSCI indexes are key indicators commonly used by institutional investors to see how well they are doing relative to the market.
Temasek's main investments are in stocks, with the bulk of its assets in Singapore and Asia, so these indexes are regarded as a useful gauge of its performance.
Temasek's returns were also better than that of long-term investors like Swedish investment firm Investor AB, which delivered 3.7 per cent, and Berkshire Hathaway, which yielded 0.7 per cent.
Last month, Finance Minister Tharman Shanmugaratnam told Parliament that Temasek has performed 'respectably' compared to relevant market indexes and reputable institutional investors.
Thursday, June 4, 2009
Temasek Losing Its Touch?
Today marks the 20th anniversary of the Tianamen massacre. Today also brought a news update of yet another massacre; a financial massacre.
It was announced that Temasek Holdings sold its stake in British banking giant Barclays in December and January, at an estimated loss of between 500 million pounds (S$1.2 billion) and 600 million pounds.
Guess we can’t be too shocked by this news as the MSM was preparing us for it by softening the sentiment with ‘good’ news the day before:
Once again thanks to ‘astute’ investment timing, Temasek chose to offload its stake just as the stock hit its lowest levels since 1985. It is rumoured that this round of panic selling was over fears that Barclays could be nationalised. That didn’t happen in the end but they would argue that at that time, it was a very real threat. With that said, shouldn’t then GIC be worried about its investment in CitiGroup? Or will the excuse be that the investment thesis changed as it did for its investment in Merril?
There are ways to divest can still make a profit. Just look at the Abu Dhabi government which unlike Temasek, made a killing in its Barclays investment. It invested into Barclays last October sold out for a US$2.5 billion profit only last month.
Jeremy Warner of The Independent questions if Temasek is losing its touch. He adds “Temasek's loss on a similar investment in Bank of America was an even more jaw-dropping $3bn. If they haven't been already, someone, somewhere, is going to get fired.”
If there were a silver lining to be found, perhaps the decision makers at Temasek would be more cautious before they run head in and dump millions into another company laden with financial woes and uncertainty. Ooopss ... spoke too soon. Now they are looking at AIG.
It was announced that Temasek Holdings sold its stake in British banking giant Barclays in December and January, at an estimated loss of between 500 million pounds (S$1.2 billion) and 600 million pounds.
Guess we can’t be too shocked by this news as the MSM was preparing us for it by softening the sentiment with ‘good’ news the day before:
Once again thanks to ‘astute’ investment timing, Temasek chose to offload its stake just as the stock hit its lowest levels since 1985. It is rumoured that this round of panic selling was over fears that Barclays could be nationalised. That didn’t happen in the end but they would argue that at that time, it was a very real threat. With that said, shouldn’t then GIC be worried about its investment in CitiGroup? Or will the excuse be that the investment thesis changed as it did for its investment in Merril?
There are ways to divest can still make a profit. Just look at the Abu Dhabi government which unlike Temasek, made a killing in its Barclays investment. It invested into Barclays last October sold out for a US$2.5 billion profit only last month.
Jeremy Warner of The Independent questions if Temasek is losing its touch. He adds “Temasek's loss on a similar investment in Bank of America was an even more jaw-dropping $3bn. If they haven't been already, someone, somewhere, is going to get fired.”
If there were a silver lining to be found, perhaps the decision makers at Temasek would be more cautious before they run head in and dump millions into another company laden with financial woes and uncertainty. Ooopss ... spoke too soon. Now they are looking at AIG.
Sunday, May 17, 2009
Temasek and Bank of America - Are we missing something?
Published first at http://singaporeenquirer.sg/?p=3762In December 2007 – the nascent and uncertain times prior to the eventual global credit meltdown – Temasek Holdings placed a strategic US$4.4 billion bet on troubled US investment bank Merrill Lynch. As markets continued to unravel from the subprime crisis and credit squeeze Temasek nearly doubled down with an increased stake of US$ 3.4 billion in July 2008.
In justification of this tremendous capital injection in uncertain times, and perhaps to calm nervy Singaporeans, Temasek declared “great confidence” in then Merrill Lynch CEO John Thain.
MP Lim Hwee Hua – Singapore's minister of state for finance – announced in parliament that “Because our reserves are invested with a long-term horizon, this long-term orientation will keep us from selling in panic in a market downturn” and that “The downturns also offer opportunities for our agencies to invest in good quality assets at prices that are attractive from a long-term perspective.”
History is cruel and unforgiving as less than a month later, Lehman Brothers went bust; setting off a chain of events threatening to take down giant insurers, banks, motor companies, … etc down with it.
Having already suffered heavy loses on initial investments, optimism sprung eternal when Bank of America bought over Merril Lynch to prevent it from going bankrupt.
The conversion of Merril into Bank of America shares promise some long term recovery given that Bank of America is a much bigger franchise.
Had Temasek sold its stake after the Bank of America takeover in Sep 2008, it could have gained US$1.5 billion, according to an estimate by Ilian Mihov, an economics professor at graduate business school INSEAD in Singapore. The stock price of Bank of America ranged from US$26 – US$37 per share in Sep 2008.
Perhaps Temasek believed in its mantra of having a long term investment horizon and sought to retain the Bank of America stock to earn more than what to them was a measly potential 20% return on investment.
That resolve, or foolishness, was short lived and today it was confirmed that Temasek had sold its entire stake by 31 Mar 09. Choosing instead to increase investments in emerging markets and reduce exposure to developed economies.
Market timing is clearly not a strong suit of Madam Ho Ching. Since the end of March, when Temasek completed the sale (at an average price of US$6.73), Bank of America stock has risen 66 percent (presently it is US$11.31).
US$11.31 is not much compared to the US$37 it could have made in Sep, but its obviously much better than US$6.73.
I’m not an economist but I am well aware of the shortcomings of attempting to time markets. It is often described as a fool’s quest and I therefore can appreciate the long term investing philosophy. So why the sudden abandonment of this philosophy? We will probably never know the real reason.
Meanwhile, we continue to reward incompetence over and over, AND over again.
Am I missing something?
In justification of this tremendous capital injection in uncertain times, and perhaps to calm nervy Singaporeans, Temasek declared “great confidence” in then Merrill Lynch CEO John Thain.
MP Lim Hwee Hua – Singapore's minister of state for finance – announced in parliament that “Because our reserves are invested with a long-term horizon, this long-term orientation will keep us from selling in panic in a market downturn” and that “The downturns also offer opportunities for our agencies to invest in good quality assets at prices that are attractive from a long-term perspective.”
History is cruel and unforgiving as less than a month later, Lehman Brothers went bust; setting off a chain of events threatening to take down giant insurers, banks, motor companies, … etc down with it.
Having already suffered heavy loses on initial investments, optimism sprung eternal when Bank of America bought over Merril Lynch to prevent it from going bankrupt.
The conversion of Merril into Bank of America shares promise some long term recovery given that Bank of America is a much bigger franchise.
Had Temasek sold its stake after the Bank of America takeover in Sep 2008, it could have gained US$1.5 billion, according to an estimate by Ilian Mihov, an economics professor at graduate business school INSEAD in Singapore. The stock price of Bank of America ranged from US$26 – US$37 per share in Sep 2008.
Perhaps Temasek believed in its mantra of having a long term investment horizon and sought to retain the Bank of America stock to earn more than what to them was a measly potential 20% return on investment.
That resolve, or foolishness, was short lived and today it was confirmed that Temasek had sold its entire stake by 31 Mar 09. Choosing instead to increase investments in emerging markets and reduce exposure to developed economies.
Market timing is clearly not a strong suit of Madam Ho Ching. Since the end of March, when Temasek completed the sale (at an average price of US$6.73), Bank of America stock has risen 66 percent (presently it is US$11.31).
US$11.31 is not much compared to the US$37 it could have made in Sep, but its obviously much better than US$6.73.
I’m not an economist but I am well aware of the shortcomings of attempting to time markets. It is often described as a fool’s quest and I therefore can appreciate the long term investing philosophy. So why the sudden abandonment of this philosophy? We will probably never know the real reason.
Meanwhile, we continue to reward incompetence over and over, AND over again.
Am I missing something?
--------------------------------
Also read: http://wayangparty.com/?p=9407
Update: Temasek explains BoA sale - http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_380131.html
Wednesday, October 8, 2008
Changi Airport Corporatisation: from the hand that swipes the ass to the hand that digs the nose
It was recently announced that Changi Airport will be ‘corporatised’ by July next year in a bid to boost its status as a leading aviation hub. In this move, “a new company will undertake the operational functions of managing Singapore's airport, including its emergency services and investments in foreign airports.”
These functions are currently handled by entities that are wholly-owned subsidiaries of the Civil Aviation Authority of Singapore (CAAS). CAAS, the regulator of the aviation industry, is a statutory board under the Ministry of Transport.
In this ‘corporatisation’, we will see the creation of two entities – a regulator and an airport operations company.
Notice I keep using air quotes for the term corporatisation. I do this because this development seems more like governmental restructuring rather than corporatisation as is generally understood (the transfer of the running of state apparatuses to the private sector). I say this because:
a) This “new company” is in fact a segment of the business that has changed ownership from a statboard (CAAS) to a sovereign wealth fund (Temasek) whose sole shareholder is the Minister for Finance.
b) Soon, the company that manages the airport and invests in foreign airports will be fully owned by a company (Temasek) that is the parent company of Singapore Airlines.
c) The current chairman of CAAS (Mr Liew Mun Leong ) will move across to helm this “new company”.
d) Taking his place will at CAAS will be Mr Lee Hsien Yang (brother of our Prime Minister who recently stepped down from his post at Singtel). He is also the brother-in-law of Temasek head, Ho Ching, who now owns the company that has split from the regulator.
e) The Government assures all that these steps are not part of a cost-cutting measure. “Instead of lay-offs, the combined entities will be hiring more staff. Furthermore, one key reason for corporatisation is to allow the company greater flexibility in paying its top talents more.”
So all-in-all what really has changed?
The company was moved from the left to the right hand of the government. Perhaps there are more conflicts of interests now, not to mention nepotism rearing its ugly head again. Oh and of course, potentially million dollar salaries for these million dollar talents.
Can someone tell me how are these moves going to improve our status as a leading aviation hub?
These functions are currently handled by entities that are wholly-owned subsidiaries of the Civil Aviation Authority of Singapore (CAAS). CAAS, the regulator of the aviation industry, is a statutory board under the Ministry of Transport.
In this ‘corporatisation’, we will see the creation of two entities – a regulator and an airport operations company.
Notice I keep using air quotes for the term corporatisation. I do this because this development seems more like governmental restructuring rather than corporatisation as is generally understood (the transfer of the running of state apparatuses to the private sector). I say this because:
a) This “new company” is in fact a segment of the business that has changed ownership from a statboard (CAAS) to a sovereign wealth fund (Temasek) whose sole shareholder is the Minister for Finance.
b) Soon, the company that manages the airport and invests in foreign airports will be fully owned by a company (Temasek) that is the parent company of Singapore Airlines.
c) The current chairman of CAAS (Mr Liew Mun Leong ) will move across to helm this “new company”.
d) Taking his place will at CAAS will be Mr Lee Hsien Yang (brother of our Prime Minister who recently stepped down from his post at Singtel). He is also the brother-in-law of Temasek head, Ho Ching, who now owns the company that has split from the regulator.
e) The Government assures all that these steps are not part of a cost-cutting measure. “Instead of lay-offs, the combined entities will be hiring more staff. Furthermore, one key reason for corporatisation is to allow the company greater flexibility in paying its top talents more.”
So all-in-all what really has changed?
The company was moved from the left to the right hand of the government. Perhaps there are more conflicts of interests now, not to mention nepotism rearing its ugly head again. Oh and of course, potentially million dollar salaries for these million dollar talents.
Can someone tell me how are these moves going to improve our status as a leading aviation hub?
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