l3E SMU
Publication: TODAY, p I & 3
Date: 18 September 2009
Headline: The long and the short of it
NEWS ANALYS1S:TEMASEK REVIEW
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THE LONG AND
THE SHORT OF IT
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LOH CHEE KONG
[email protected]
"LONGterm" must be the favouritecatchphraseamong
Arguably, such volatility lends weight
the fine men and women at Temasek Holdings.
to Temasek's reluctance to have each and
Yesterday, as Temasek held its annual press every move pored over by the public. And
conference on how its portfolio had fared in the as its chairman S Dhanabalan reflected in a
past year, the phrase was cited 10 times in the press interview last month, Temasek would
five-page press release alone, and 15 times in chief have to hope such intense scrutiny did not
executive Ho Ching's 12-minute speech.
affect its staffs decision-making.
"At the core of our thinking, we remain a longMs Ho said as much yesterday, when
term owner and investor, focused on building a asked if Temasek's investment decisions
robust portfolio that can deliver sustainablereturns would be influenced by public opinion,
over the long-term," Ms Ho concluded,before using both foreign and local. "We are human bethe phrase another 16 times in the hour-long Q&A
ings ...so we do track some of this, but we
try our level best not to let that drive our
session that followed.
Yes, there is no other way to describe the nature investment decisions." she said.
of Temasek's operations and investment strategies.
The problem? The phrase - used consistently, THE PROBLEM WITH A STOCK PHRASE
and with some justification, to deflect questions Even so, some are growing jaded with the
about specific investment decisions - is fast start- company's penchant for responding to aping to sound banal to the ears of an inquisitive peals for information with a certain stock
Singapore public that feels timely information is phrase instead of details.
its due, and has been dissatisfied over Temasek's
As law academicEugene Tan of the Sinshort-term losses.
gapore Management University put it: ''The
Indeed, depending on whether one takes a reference to Temasek as a 'long-term inveslong- or short-term view, the investment compa- tor' is beginning to ring hollow ...Everytime
ny's performance in the past year could be judged Temasek rolls out its media statements,
quite differently.
(the phrase) is seen as a blanket term to
Since its inception 35 years ago, the com- not engage in the specifics."
pounded annual Total ShareholderReturn (TSR),as
Take yesterday's attempts by journalists
at March, has increased 16 per cent both in terms to press Temasek on specificportfolio losses.
of market value and shareholder funds.
Its executives mainly reiterated that they
Move the lens closer, and one would note that took a long-term approach to investments
over the last five years, the TSR went up by 6 per and did not wish to discuss specific deals.
cent by market value and 11 per cent by shareBut Mr David Cohen, an economist at
holder funds.
Action Economics,insists that by and large,
Zoom in even more, and the drastic year-on- discussingspecific investments would "not
year fall as of March - by 30 per cent and 18 per compromise (Temasek's) position" as a
cent in terms of market value and shareholder long-term investor. "Obviously, they can
funds respectively - stands out sharp1y.h does the hold on to the investment, they should be
30-per-cent or $55-billion loss in portfolio value.
able to weather any ups and downs."
But focus on the four months after its books
He alluded to Temasek's investment in
were closed, between April and July,and Temasek's Merrill Lynch, which it later sold at a loss
investment portfolio value has risen by $42 billion after the latter was taken over by Bank of
to $172 billion -just 7 per cent below its peak of America. "It wasn't the revealing of informa$185 billion in March last year.
tion to the public about Merrill Lynch that
caused their problems there," he said.
But CIMB-GK regional economist Song
SengWun thinks it understandable that Temasek would not want to "show too much
of its hand" to rival investors or potential
sellers, which could "make things difficult
for subsequent deals".
Even as Singaporeans learn to understand the unique creaturethat Temasek is, the
latter has its work cut out in gaining public
acceptance for its unusual role of generating
wealth for Singapore's future generations -a
benefit that current citizens, obsessed with
the here and now, find hard to relate to.
The first step is to stop falling back into
a defensive mode every time questions are
asked of it. Said Asst Prof Tan: "Charles
Goodyear's departure is a very good example where, again, they resorted to very
convenient catchphrases - in that instance,
it was 'strategic differences'."