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7/08/2011

Return respectable but not impressive – Analysts

This is the title of an article on the release of Temasek Holding’s financial report. I went through briefly on the charts and totally disagree with this comment. I tried to figure out what which auditing company did the report, or was it done internally, but could not find any names mentioned. So I presume it must be an internal auditor.

What was reported was simply excellent. I think not many fund managers can boast of such remarkable financial returns over the same period covered. I am greatly impressed with the super talents running it. Time to reward them handsomely.

The report covers a period from 2004 to 2011 which was hit by the global financial crisis in 2008. Temasek was badly hit like everyone, and its portfolio value fell from $185b to $130b, registering a loss of $55b. This is no small peanut. In the train I used to read this advert from a fund manager boasting of a whopping US$5b that it was managing. Now look at the $55b being wiped out within a year. That was easily an equivalent of wiping out 10 big fund managers completely.

But no need to worry. In year 2010, Temasek fully recovered from all its losses and its portfolio went back up to $186b, a whopping and unbelieveable recovery. And now 2011, it added another $7b to top $193b. Can you beat that?

Another better indicator is that throughout the period of 2004-2011, Temasek registered profits every year! Even during the global financial crisis, it booked a net profit of $6b and $5b in 2009 and 2010 respectively. If this is not impressive what is? The portfolio could be wiped out by $55b and there was still profit to be made, approximately about 10,000 peanuts.

I think those analysts that tried to talk down this fantastic report of Temasek need to have their heads checked. It is probably the best fund manager the world has ever seen. I don’t think any sovereign fund or funds of this size could do any better than Temasek in the same period.

It is a company that practically cannot lose money no matter what crisis is in the air. Better put in more money for Temasek to manage. Well done, and time for a well deserved fat bonus.

7 comments:

Anonymous said...

They should put up an advert, the fund that is profitable under all circumstances. They might even get more money from other funds to play with.

What kind of accounting is that? Value dropped $50b and still made profit of $6b. Does it make sense?

Anonymous said...

Could it be what they call 'Indian Accounting'?

notanotherspinstory said...

Integrity of Temasek's accounting seriously in doubt.
Wait and see.

southernglory1 said...

Woh! another whopping result. Will this be another preamble to high and lofty self satisfying reward to the CEO and the board of directors. The public must be aware that all Government Linked Companies , so called GLCs are capitalised with the people's money from taxes,CPF and reserves. The government in power appoint all the officers from CEOs to the Board of Directors. It is time the public at large make noise when the CEOs and the directors running the GLCs pay each other insane high salaries and bonuses running into millions of dollars. The people would not be bothered if these CEOs and directors are running their own companies starting with their own capital. But these GLCs are formed using the tax payers' money and capital. The CEOs and directors should be paid only a reasonable fix salary of between Five thousand to Twenty thousand dollars a month and nothing more. All profits of the GLCs must go back to the people and the country. However, it is not to be for all the CEOs and directors of GLCs have been unashamely paying themselves insane astronomical remuneration running into millions of dollars annually. How could the people be quiet when the CEO of Capital Land paid himself Twenty-one million dollars and other CEOs of other GLCs paid themselves from Five to Twelve or Fifteen million dollars. Isn't it actually legallised robbery. Lets hope the next incoming government will not be PAP and that it will seriously look into the monkey business of the GLCs and reorganise them to the benefit of the people and the country and reserve the right to take back the millions which had been wrongfully taken. Southernglory1

Anonymous said...

When I was a business division manager in an MNC, my performance was measured by growth beyond normal, i.e. if the industry norm is 10%, and my division registers 15%, then my value add is 5%.

The total revenue of the business division rolls on, and is not factored into my performance or value-add.

I believe that is the problem when CEOs award themselves obscene payouts on the value of their portfolios.

Chua Chin Leng aka redbean said...

I like the example set by one of the CEOs of NYSE. He paid himself something like US$200m a year or roughly US$1m daily if you count just the working days.

His self serving logic is simple. He managed an industry of trillions of dollars and the NYSE makes billions of dollars. He was just asking for a small percentage.

He is my role model. I will quote him if I want to write my own paycheck. If I will to run paradise, I will just ask for a small percentage, chiat buay liao.

Anonymous said...

"How could the people be quiet when the CEO of Capital Land paid himself Twenty-one million dollars and other CEOs of other GLCs paid themselves from Five to Twelve or Fifteen million dollars. Isn't it actually legallised robbery". Unquote.

Well, what can the people do after making noises?

This is a state ruled by Law, so long as it is legal, be it 'daylight' robbery and legal killing(death sentence), they are legalized. Will any Singaporean be able to find anything offensive against any act that is permitted by the Authority?

Conscience and greed are out of the ambit of the Law in Sin.