Tuesday, 8 September 2015

General Elections 2015: What Exactly Is The Truth About Temasek vs. Chee Soon Juan's Claims?

As yesterday was my first day back at work after a business trip, I was quite upset that I was flooded with work the entire day, which saw me skipping my lunch and missing the lunch rally as a result.

I was quite looking forward to attending, but my work schedule simply didn't allow me to. This morning, upon reading Today's coverage of Dr. Chee Soon Juan's rally, I was quite appalled at how misleading his claims were.

Having watched his rally video, I do not deny that Dr. Chee can indeed be quite a convincing public speaker. If you've already read about his life story (and discounting the negative character assassinations that other political candidates have been repeatedly bringing up), you'll probably have the same level of respect that I have for the guy. However, I also believe that respect has to be weighed against the truth at all times. I've written previously on the fallacy of believing someone's arguments just because they're an authority. Yesterday, any naive or financially illiterate Singaporean listening to his lunchtime rally might have been enraged, but I'm telling you, you might be angry for the wrong reasons.

Here's debunking what this opposition leader had to say.

Investigation 1: Did Temasek really pay $4 billion for Shin Corp, an "investment that ultimately ended up in smoke?"

Did it, really?

Indeed, it seems like Temasek paid a hefty sum for Shin Corp. But what did Dr. Chee mean by saying it "ended up in smoke"?

If you google Shin Corp shares today, they are no longer trading on the market, because the company changed its name to In Touch later on.

Did Dr. Chee mean to say that a change of name is equivalent to ending up in smoke?

Assuming that the share structure did not change drastically after the name change, using Temasek's initial share price of THB 49.25, we see a 57% increase today!

If you don't understand that, it means profits, duh.

If Dr. Chee or Temasek could clarify this, I'm sure it'll be helpful in providing context to the rest of us Singaporean voters who have heard Dr. Chee's speech.

Investigation 2: Did Temasek really lose "billions through investments in banks like Citigroup and UBS" in 2008?

First of all, I hope the people who "boo-ed" in the crowd know the difference between unrealized losses and actual losses.

Technically, if you bought a stock at $10, but it drops to $5, your portfolio experiences an unrealized loss of 50%.

However, if you choose not to sell and continue holding the stock, when it rises to $20 a few years after the economy recovers, that equates to a 100% unrealized gain on your portfolio. If you sell it at this point, then you not only get your initial capital back, but will also reap 100% in actual profits.

Does 2008 sound familiar? Many investors will remember it as a turning point in history, where stock markets around the world plummeted.

That highlighted part of the Dow Jones Industrial Average shows the drop. That was when global economies were collapsing, huge corporations like Lehman Brothers folded, and almost every other stock saw a huge decline in stock prices. Everyone experienced paper losses then, much less Temasek and GIC!

However, if you follow successful investors, you'll realize that many of them picked up cheap stocks during the downfall of 2008, and are reaping huge returns today. I've also talked about this in some of my earlier blog posts while introducing the concept of long-term investing.

Here's UBS stock chart, showing recovery since its drop in 2008, although recovery is still far from its peak heydays.

Thanks to Macroanalyst for highlighting that I had used the wrong UBS chart in the original post, and to Matthew Seah for identifying the right one.
I don't know for sure if Temasek sold their stake in UBS or Citigroup during that terrible time, but we do know that GIC sold their original stake in Citigroup in 2009 for a $1.6 billion profit.

When Temasek bought Citigroup in 2007, it was indeed near peak, but today's price is higher than the peak levels of 2007 anyway, so presuming that Temasek didn't sell their stake, it would be sitting on unrealized profits by now.

In addition, Bloomberg states that GIC held Citigroup shares for an average of $29.50 each back then. The share price today is slightly over $50, in other words, a 70% profit in just 4 years.

Putting that into perspective, if as a retail investor I invest $1 million in the stock market today and get 70% profits in 2019, that's $700k in total, or $175k a year, or $14.5k every month!

Investigation 3: Did Temasek really pay $4 billion for "highly questionable investment" Olam International?

Every discerning investor knows that stock prices often fall sharply when there are moments of crises happening to companies, at which there will be much uncertainty and questions over the company's future. If we can differentiate the superficial crises from the serious ones, we can in fact pick up the company's stock for cheap at such timings.

The jury is still out on whether Olam International is indeed a "highly questionable investment", like Dr. Chee claims, and only time can prove this one.

However, if we are to look at Olam's stock price last year till today, this is what you'll find:

As you can see, there is still a possibility that the stock price might still rise in the future. You'll never know.

Although I'm slightly bitter at Temasek for not using our due diligence services as part of their initial investment evaluation (I have little faith in the quality of our competitors), I still believe that Temasek and GIC know better about investments than we, the average investor, do.


For all that's worth, I have much respect for Dr. Chee, but after reading this report on his lunchtime rally yesterday, I'm afraid some of that initial respect has been lost. This is a personal assessment on my own part.

Did Dr. Chee not know the full story, or was he deliberately focusing only on certain facts within a limited timeframe to rile up the crowd?

I don't know for sure. I wasn't there in person during his rally, so my comments and judgments are limited to the video of his speech that has been uploaded online, as well as newspaper reports transcribing what he said.

I appreciate political candidates like Dr. Chee raising up valid questions on the spendings of Temasek, GIC and our government in general, but I also disagree on the way the numbers and insinuations were communicated in his rally yesterday as it is of my own belief that more context should have been provided.

In taking the time to do this research, I hope Singaporean voters understand that you cannot always just take any politician's words at face value. I am not referring to Dr. Chee, but every and any political candidate, when I say this. Even if PAP presents something, it is always good practice to do your own due diligence before you decide whether you wish to believe what they say.

It is easy to present facts that provide a limited perspective of the actual situation. Marketing and advertising folks do this all the time, such as when they claim that "99% of women experienced 2kg loss after eating our diet pills" but forget to tell you that this 99% is derived from a very small statistical group. If the sample group is only 5 people, can that be representative of the entire population? Can you then safely take the 99% and presume that the treatment will work for you too?

For all the financially un-savvy folks who got angry with Temasek / PAP after listening to Dr. Chee's speech yesterday, I hope this article sheds some light on the issue. Did Temasek make poor investment decisions? That's your call.

As an investor myself, I can only comment that investing is not as easy as some investing courses might have you believe. There is no short-cut, and no matter how in-depth your due diligence and research might be, there's always the chance that you could be wrong. Even the great Warren Buffett himself isn't correct 100% of the time, much less Temasek.

Till then, remember to always research before you make your judgment, and please vote wisely.

With love,
Budget Babe


  1. Aren't you doing the same to Dr Chee as well if you're not 100% sure that GIC didn't sell their stocks? What if he knew his facts?

    1. We as ordinary citizens have very little information on the investment activities, especially on the buy and sell side, by both Temasek and GIC. Note that I am not doubting Dr Chee's statistics, but I am questioning why the information presented seems to be purely one-sided, or is that my own interpretation?

      This is not a criticism on Dr. Chee, but a further investigation into what he said and the reactions to his speech that resulted. Instead of taking his words as it is, I choose to conduct further research and craft my own opinions on it.

    2. 1. That is your own interpretation. How do I know that? Read your first sentence.

      2. This is politics my dear. It is never clean and it is always one sided. Can you imagine going to a PAP rally and hear our Ministers telling us how right the opposition are? Or vice versa? I guess not.

    3. Hi,

      1. Well yes. And this is my personal blog. Surely I'm entitled to having my own opinions and interpretation just like everyone else. If you disagree, my comments box is always open for people to comment, clarify or even debate (and note that I don't moderate or block comments, unlike some blogs).

      2. I hope that if the opposition is right and deserves rightful credit, then our Ministers have the integrity and decency to attribute it as such. But yes, in a political rally, no one is stopping anyone from pushing their own agenda. I've only attempted to provide further context in this analysis for people to judge Dr. Chee's speech for themselves.

    4. Hi everyone, I believe this would suffice. Check it out yourself


  2. One thing to say, unrealized losses ARE still losses because you have no way to predict the future of the market. Ask any financial institution and you'll see that most, if not all respect this line of thinking. Personally, yes, unrealized losses feel as if they can be recouped when the market rises, but to a fund manager, these are in most cases the same thing.

    1. Of course. But as a retail investor, to me, unrealized losses are not equal to actual losses. Just like how fund managers can define unrealized losses as actual losses, surely I have the right to define it the way most of us retail investors do too?

  3. Hey I need to point the mistake made regarding Citi.

    There was a 10 to 1 reverse split in 2011.

    I know cause I had the counter.

    So the share is actually equivalent to USD5 if the reverse split did not occur.

    So yeah the Citibank shares are still at a big paper loss.

    1. Thanks for clarifying! A few of us have been debating over this for ages after we suspected it might be $5 instead but couldn't confirm for sure.

      Looks like Citi was indeed a loss then, if it is $5 :/

    2. Budget babe, you need to factor in the 30-40% depreciation of GIC and Temasek's foreign currency denominated assets like Citigroup over the time. It was very ugly no matter how you look at it.

      Chee did not make a solid case but it is difficult to do so with the low level of disclosures. But strategically speaking, the government is thinking returns purely financial terms. The truth of the matter is that spending the monies that would have gone into the reserves on such things as healthcare, education etc are also investments. The surprise is that given the admission by GIC and Temasek that returns will remain subdued for the foresseable future, then why invest in financial assets at the expense of social assets? That is what Chee is really referring.

    3. Hi Chris,

      Thanks for clarifying!

      There were many other things I could have factored in, but didn't due to time limitations. If you would like to calculate and make a case for the foreign currency depreciation, do share the details with us here so the rest of us can be enlightened. Thanks in advance!

      I have to agree on the low level of disclosures though. Should Temasek and GIC be more transparent in their investing activities? Perhaps. But that's another debate for another day.

    4. Average cost of Citi bought by GIC is US$29.5 AFTER adjusting for 1-for-10 reverse split.

      It meant that GIC's average cost was US$2.95 before the reverse split.

      Budgetbabe is right in this.

    5. http://www.xe.com/currencycharts/?from=USD&to=SGD&view=10Y

      USDSGD was around 1.55 in early part of 2009, when citi was around the price GIC bought.

      at current rates, the depreciation due to forex losses is probably 10%, NOT 30-40%

  4. I think the Citibank bit may be incorrect - since they did do a reverse share split

    1. Hi Jason, I'm wondering the same but couldn't confirm, looks like someone else has confirmed it then! Certainly sheds more light on the issue.

    2. But your screenshot says the 29.50 is the price AFTER adjusting for the split.

    3. Hi Puaa!

      Yes, I took that screenshot off Bloomberg's article. So if that's wrong, then my mistake would be in trusting that a reputable news source like Bloomberg might or might not have gotten that right.

    4. Jason, would you be able to comment further and clarify for us? Thanks!

    5. Reverse split has been accounted for. for apple to apple comparison, Citi acerage price bought by GIC was $2.95..

      AFTER adjustment for reverse split, it become $29.50, as stated in the article.

    6. Matt, you are right. I did not read it carefully.

      GIC was real lucky with Citi cause the preferred shares that they bought, the conversion price to common stock was USD26.35 per original agreement.

      It was really a stroke of luck that they ended up converting at USD3.25.

    7. Hi whowillbe,

      Yup. Not so great for UBS though.. did some research and commented below.

  5. Hi Budget Babe,

    I applaud you for digging deeper, questioning his arguments and providing another perspective.

    We are way too susceptible to the manipulative messages of politicians, the media and the financial industry. All of them have motives that might not match ours. As such everything we hear is an opinion, not a fact. Everything we see is a perspective, not the truth.

    If we are hearing an argument for the first time, and we are only hearing one side of the argument, then indeed we should beware. There is no shortcut to forming our own opinions.

    In general for many established politicians this saying applies: "We are diplomats. That means, when we say what we think, we have misspoken." It is good to have more 'new politicians' in parliament who do say what they think.

    1. Hi Tacomob, thanks! The first red flag for me was the 2008 part. I immediately thought, wait a minute, EVERYONE lost money then! Things can't be that simple. Sometimes people can be lazy to verify truths though. They expect too much from the candidate to be honest. That's how MOM and the fake degree saga happened, wasn't it?

      Not just politicians, but we should always do our own due diligence before arriving at conclusions.

      P.S. I'm getting the start of backlashes over this article, from people whom I presume are his fans? Maybe they didn't read my piece till the end.

    2. Not backlashes! They merely provide another perspective.

      And don't you feel good for successfully motivating some people to think for themselves?

      Isn't that one of the objectives why we blog? Keep it up.

  6. Hmm - I posted but it didn't appear - let's recap.

    Don't you remember that just after Thaksin was kicked out, Shin Corp there was a big fuss and Shin Corp was no longer allowed to have a large stake held by either SingTel or Temasek (I can't remember which). So current value is irrelevant unless you can show that there was some deal that actually allowed them to keep their stake.
    If my memory is correct, there would have been a big loss.

    1. Actually, I don't remember that. But I'm not doubting you! I won't be the best person to prove anything in this deal though, so let's hope Temasek clarifies.

    2. Then aren't you like the "pot calling the kettle black" in your assumptions while accusing the man of not being honest with his facts? The are so many "I don't know" in your replies.

      Many forget after the 2008 financial debacle, all the financial institutions were prop up with bailout money from governments which today they put a lipstick over the pig and call it Quantitive Easing.

      Do you seriously think that what happened in 2008 is over? Afterall, what happened in 2008 was one of the greatest financial heist in history with Wall Street leading the way, don't you think so?

    3. Hi Christan,

      Who knows what will happen to the market? Even Warren Buffett doesn't know, much less me. Though I certainly wish I did!

      I disagree with your accusations of me though. For one, please re-read my post again. I did not accuse CSJ of being honest with his facts. I merely said that his numbers should be taken in a wider context of things, which I've then provided. Your accusations are but your own judgments.

      At least I have the decency to acknowledge areas where I am not 100% sure of, and as you can see, I've been very open to accepting feedback, criticism and changing my facts if I've been proven wrong.

      If you think I've made another mistake on any of my statements, feel free to correct me. If you're right, like what Macroanalyst pointed out in one of my graphs, then I will not hesitate to change.

      Otherwise, what are you accusing me of in not being honest with my facts?

    4. You said, "It is easy to present facts that provide a limited perspective of the actual situation."

      Well, unless you have inside and detail information which majority of people do not have on Temasek and GIC, aren't you guilty of your own perspective of what happened in the two PAP runned organisations?

      See my point?

    5. Hi Christan,

      If that is your charge, then yes indeed I'm guilty of having my own opinion based on the statistics which I believe are truthful statements provided by Temasek themselves on their website and in the media.

      At least my opinion is based on a lot more context and additional research rather than the limited information Dr Chee provided during his 25-minute rally.

      You're free to provide facts and support if you think additional statistics and context will prove that I've gotten it wrong.

  7. Didn't come out as clear as intended. After he was kicked out as PM, here was a big fuss and Shin Corp was no longer allowed to have a large stake held by either SingTel or Temasek.

    1. This comment has been removed by the author.

    2. http://finance.yahoo.com/q/hp?s=INTUCH.BK&a=00&b=1&c=2006&d=08&e=9&f=2015&g=d

      Temasek effectively owned 96% of Shin Corp indirectly at one point. Temasek, through Aspen, now owns around 42% of Shin Corp.

      Assuming Temasek bought 96 shares (96% out of 100 shares) for simplicity.
      Assuming Temasek sold 54 shares of Shin Corp at its lowest after the acquisition on Oct 29, 2008, for THB13.60, it made an actual loss of THB35.65/share but collected THB2.40/share in actual dividend, net loss of THB33.25/share.

      At current price of THB77.50, the remaining 42 shares made an unrealised profit of THB28.25. There is also actual dividends collected THB30.855/share over the period, net profit of THB59.105/share

      Total losses, 54 * 33.25 = 1795.5
      Total profits, 42 * 59.105 = 2482.41
      Net profits = 686.91 (2482.41-179.5)

      Total cost consideration, 96 * 49.25 = 4728
      Total returns, 686.91/4728 = 14.53%

      This is the worse-case scenario given that I am using the lowest possible price for Temasek to sell its stake. There is no requirement for Temasek to reduce its shareholdings any less than 49%, but in our assumption, Temasek sold an extra 7% at the lowest possible value as well. Thus this would have been the most conservative results for Temasek.

  8. Good article. I agree, its your research and perspective. Good reminder to keep our minds open and do our own due diligence. Keep blogging responsibly.

    1. Thanks Aaron for your compliments! I try my best to :)

  9. Pls do not work on the citi price today...

    1. Actually, if you reread the Bloomberg article that I quoted, apparently you CAN work on the price today, because it has already been adjusted.

      At least, that's what Bloomberg says.

    2. Had you bought any citi share before the subprime crisis? Do you know why today price is double than just before it crashed. If you had bought it then before it crashed and sold it today, you are still making a loss.

    3. Hi, check out the investigative work that Matthew Seah has done and shared in the comments please. If you think his numbers are wrong, I welcome you to post the corrections here instead, and I will amend them accordingly if they're indeed right.

  10. Hope after looking at the comments and working out the sums, you should edit your article for better accuracy.

    Anyway, an interesting article for you to digest and pick apart ..

    1. Hi Wealth Journey,

      So as it turns out, I might be right after all about the Citi price, as I didn't misread what Bloomberg said. The price HAS already been adjusted. You can refer to Matthew Seah's clarification below and the original Bloomberg article for a better idea as well.

      Thus, I will not be editing the article since it seems to be that I didn't make a mistake.

    2. Thanks for sharing the article too! Wow, tons of stuff. Let me read and see.

  11. well. I think it is misleading when you title your article "THE TRUTH ABOUT TEMASEK VS. CHEE SOON JUAN'S CLAIMS". There are many hardcore fans for different parties and not many are listening, but in fact jump into conclusion almost immediately.

    I am making assumption here:
    1) PAP fans will start trash Dr Chee and take your words for it (not what you said in the end, but what you say in the title).

    2) Dr Chee fans will start "trashing" you for misleading the public.

    I think if you wanna engage and have an open discussion and encourage people to research before jumping into conclusion, you might need to be careful in the choice of words. And also some of the images you have chosen for the article is quite judgemental too, that is perhaps I was wondering your intention of writing the article and it get confusing when I read all the way till the end. Are you trying to encourage people to do more research on their own or are you having a personal attack?

    Many people are at an emotional state now (whatever parties they are leaning towards), and with the flow of the articles and the images you have, it is difficult for many to have a clear mind to read it all the way through without jumping into conclusion.

    Something for you to consider, if your intention is truly to get people to research and discover the "truth".

    1. Hi,

      Thanks for sharing that you find the title misleading. However, I considered various titles before posting, and felt that this was actually quite balanced and would prompt people who would want to know more about what Dr. Chee said to click on it and discern for themselves.

      1. If as you claim, PAP fans are to simply take the title as it is, without even reading the whole piece and deriving their own conclusion, then I cannot apologize for people who do not make fully-informed judgments.

      2. They can thrash me for all they want. It is all in the name of open debate.

      My intention of the article, as stated, is to provide a more thorough analysis of what Dr. Chee said, but instead of using only his quoted facts, I choose to research more and derive my own opinions about it.

      There is no way this article is meant to be a personal attack, and I do not think I have worded it as such. I have sought to be balanced while writing this, and have also clearly stated my respect for Dr. Chee. Contrary to what some politicians are doing today, I am in no way attacking Dr. Chee's character, but merely questioning what he said during his rally.

      I cannot stop people from having tunnel-vision. But I can only hope to educate those who are in search of more research as they try to discern what exactly is the "truth".

      Thanks for commenting!

    2. not saying that you don't have good intention. just mentioning how it can be misled. I have quite a few friends (pro-pap) posted your blog and say something like "opposition any how say...." after checking with them.... they didn't read your blog... they just read the title.. and post it... that is the upset of social media

    3. Hi Unknown,

      In that case, you should flag them out and tell them not to be mindless pro-PAP voters too!

    4. How can one say, "The truth about Temasek" when hardly anyone apart from the government has any truth about the goings and dealings of Temasek whatsoever. Using the word "Truth" in the headline is already a deception and contradiction in challenging someone's claims.

    5. How can one say, "The truth about Temasek" when hardly anyone apart from the government has any truth about the goings and dealings of Temasek whatsoever. Using the word "Truth" in the headline is already a deception and contradiction in challenging someone's claims.

    6. Hi Christan,

      That's your own opinion. I used "truth" because I've quoted actual facts and statistics taken from various sources, including reputable news sites and even Temasek themselves.

      If you don't think any of what I've posted is the "truth", you're welcome to correct my "untruths". If you're right, I will not hesitate to amend them accordingly.

      Otherwise, if you don't have proof, then you might want to either find some, or cease imposing your own judgments on others. After all, my blog title is up to me to choose and write. It satisfies my own criteria of what "truth" means, so that's why I used it.

      Hope that clarifies.

    7. So then, what is "truth" to you and Temasek is basically of your own opinions and not what the market says, since the whole of the GIC and Temasek is shrouded in darkness. If Temasek is shrouded in non-transparency to details, how then can you even say what you have quoted from their website is "truth"?

      And to say that this is "your blog" and you can say what you want is being "responsible?, Then what's the difference between you and Amos Yee as far as intents are concerned ?

      Aren't you behaving like Dr Chee whom you are accusing of insufficient facts and figures? My point is simple, how much is it that you have gathered from Temasek is even "truth" since we all know they are non-transparent with what they are doing?

    8. Hi christan,

      You're treading on dangerous grounds here, as you've just insinuated that what Temasek has provided on their website as reported numbers and returns of their investments are not true, i.e. falsified information.

      This is a very serious accusation. I sincerely hope for your sake that this does not get escalated to their attention, and that Temasek does not come after you.

      My intentions with this piece, as I have highlighted in my post, and also repeatedly emphasized here in multiple comments, is to provide greater context of what Dr Chee has said and encourage Singaporeans to do their own due diligence instead of just taking what Dr Chee has said to be representative of the whole truth. For instance, the statement Dr Chee said of Temasek making losses in 2008, while it could indeed perhaps be the truth, can also be misconstrued as highly misleading when you consider the whole context of 2008 being the financial crisis where pretty much everyone lost money. In this light, the seriousness of Temasek losses could now become relatively lesser, compared to if the losses were made during a bull market.

  12. This comment has been removed by the author.

  13. I like to think in this sense.. cpf is just like your class treasurer who's suppose to take account of the $.. he or she Shd not take the $ and use it for some investment.. May be it ends up gain or lost, morally is not right bcos those are everyone $.. or hard earned $ to some....

    1. If the money is not invested then where would the interest come from? Do note that cpf interest is guaranteed and not affected by any loss which could have resulted from the investment. Which is why they can only provide such a low rate (guaranteed rates are always damn low for self protection).

    2. That's the issue here. The CPF interests are guaranteed but the investment GIC/temasek made are not. Furthermore they are sharing or releasing any information to us - How do you want we to trust them?

  14. I like to think in this sense.. cpf is just like your class treasurer who's suppose to take account of the $.. he or she Shd not take the $ and use it for some investment.. May be it ends up gain or lost, morally is not right bcos those are everyone $.. or hard earned $ to some....

  15. I would also like to add that the UBS chart you use is misleading because it is the chart of UBS preferred securities and not the stock price itself. The stock chart for UBS looks a lot worse than its preferred securities over the same time frame which you used. I hope this is an honest mistake due to careless work and not something else. But in any case, as you have shown yourself, it is very easy to make mistakes when it comes to financial matters especially complicated transactions so I do not know if Mr Chee is out purposely to mislead the public just as I'm not sure if you are also out to do the same.

    1. Hi Macroanalyst,

      Thanks for highlighting that! I was uncertain if that was the correct one to use as well. Let me check with some of my finance friends and I will replace with the correct chart accordingly.

      I don't think it is fair to insinuate that I'm out to mislead the public in this case. I've provided more facts and figures, stated the sources I derived the information from, used a combination of information sources, and left the conclusion up to the public to judge for themselves. In addition, I've been welcoming comments and feedback in cases where I might not have gotten all the information right, including the debate on Citi shares, as we've now realized to be true based on my initial post, as pointed out and investigated by Matthew Seah.

      In this case, I also welcome you to correct me on UBS Securities.

      Thanks for correcting!

    2. This comment has been removed by the author.

    3. http://news.asiaone.com/news/general-election/chee-calls-gic-temasek-open-books?utm_medium=Social&utm_source=Facebook&utm_campaign=Echobox&utm_term=Autofeed&link_time=1441786454#xtor=EchoBox

      Budget Babe, pardon me for my ignorance, but would like to ask some basic questions. So in the end, Why is Dr Chee so confident about his assertions? Why is GIC remaining silent over this? Any light in the end of the tunnel? ..in other words, why are you speaking on behalf of Temasek and GIC? Let them speak for themselves so that the matter can be concluded, any theory deduce at this point against Dr Chee is rather misleading, a personal point of view.

    4. Firstly, GIC bought convertible notes of UBS at 11 billion Swiss francs. It received 9% coupon from the notes before GIC elected to convert said notes to 230.7 million UBS shares.

      As the price is in Swiss francs, the correct market we should be looking at would be the SIX Swiss Exchange.

      "Based on Reuters calculations, the assumed conversion price will be 47.7 Swiss francs a share."

      A 9% coupon would mean GIC received 0.99 billion Swiss francs. Using 230.7 million shares, that worked out to be 4.3 Swiss francs a share in coupon payment.

      UBS have paid out 1.50 Swiss franc in dividends over the years, subject to 35% Swiss federal withholding tax, so that’s 0.975 Swiss franc in actual dividend received.

      Using current price of 20.31, actual losses on a per share basis would be 47.7 – 20.31 - 4.3 - 0.975 = 22.115 Swiss francs or 46.4%.

      Exchange rates have favoured the Swiss franc. Since GIC invested in Dec 2007, 1 CHF have strengthened from 1.27 to 1.46 SGD. So that’s a 15% gain from forex changes.

      Net off, GIC had an unrealised loss of roughly 31.4%. This is as factual as one can get, unless someone else prove me wrong.

    5. Hi Appreciatier,

      Temasek's books are open


      Will YOU read it? =D

    6. Using forex to justify gains and losses is pretty risky isn't it? What if the exchange goes against your favour? How are we in control? Thus, it is still a fact that a poor investment initiative cannot be erased, it is still a mistake and we still need clearance on this matter...thanks for the reference, to gather these facts I assume you are working in Temasek. : ) Thanks.

    7. Risky yes,

      But this is the most accurate figure one can get, no?
      Everyone wants the TRUTH, no?

      Well this is as true as I can come up with.. If it can be corrected more, I would. How about you helping me with that?

    8. Its all on public domain. There are hyperlinks in grey for you to follow.

      Exact quotes are also used in quotes for factual information from trusted sites like WSJ, Bloomberg, Reuters.

      I'm not working in Temasek. Just some hardwork in research which many choose not to before commenting.

      I endorse what Budgetbabe dos, Research for 2nd opinion, but use reliable sources to derive an unclouded conclusion.

    9. APPRECIATIER, assumption makes an ass out of U and me.

      As you can clearly see, your assumption of Matthew working in Temasek just to retrieve the information has just been proven wrong.

      Don't assume. What I've been trying to say numerous times in this article is that people shouldn't just take Dr. Chee's numbers as it is, but delve deeper in the research and then come to your own conclusions.

      Matthew and I have done so, and we've reached our own personal conclusions. What about you?

      Have you done your own research (and if so, please share them here if you think something we've said is wrong) or have you merely been mindlessly taking in the numbers I've presented as well?

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    11. Aiyo, my assumption was meant to be jovial about Matthew and nothing related to the context of your write up, so please just make an ass for yourself and don't pull me into the water.. I will not post any research at this point as I have not prove the authenticity of what I can post, learning a lesson from you lah, but nothing wrong to ask questions from basic common sense, because I still feel that forex is a highly volatile tool to justfy gains at this juncture, disagree? It's still fine with me cos the fact remains.

  16. Sorry Budget Babe, I hate to disagree but if you want to point a finger at other people, better make sure you do not commit the same mistake. Two wrongs doesn't make one right. If you are giving yourself a chance to be corrected, please also give others a chance to be corrected. Perhaps you might want to consider writing to Dr Chee and seek for his comments.

    1. Hi Macroanalyst,

      I appreciate you correcting me. But I disagree that you should be holding me to the same standards of Dr. Chee. He is, after all, a highly-esteemed politician whom many listen to. He is also running for elections, and standing in the public eye. He is also much older, and presumably, much smarter and wiser than I am.

      Who am I? I am but an average Singaporean girl, not a political figure, and for that record, young and only in my mid 20s. I try my best to be write, but I've also clarified that all of my writings in this blog are mine and mine solely alone. I have not, in any way, insinuated or accused Dr. Chee of lying with his numbers. In fact, I've emphasized that his numbers are right, but merely clarified that they are to be taken in full context, which I've also added on that it might be due to his limited time for the speech thus he can't talk about everything and anything...thus my article here.

      I see no reason to write to Dr. Chee as I've arrived at my own conclusions after taking in his figures, and doing further research on my own end. If Dr. Chee wishes to clarify or defend his stand further, I welcome his comments here. But there is no need for me to go to him, as I've already gotten the answers I was looking for when I started out on this piece.

    2. Also, as per your correction, I've since changed the UBS chart. This was a mistake on my part and I'm happy to acknowledge, and correct that. Thanks for making this piece a more factually accurate one! :)

  17. While the article reflects the perspective of a 28 year old who has in some way or another been exposed to the grants of the government in return of his academic merits, please also be reminded that he is comparing the costs and standards of living between Europe and Singapore. Europe's wages are of course higher, so will be their cost of living. His parents paid SGD26K for his education. Please be reminded that for his parents who are not as highly educated as him had struggled with saving that substantial 26K. They probably took them at least 10 or 20 years or possibly maybe even to the extent of sacrificing their quality of life and surrendering their endowment policies for that. PAP was also once the opposition and after decades of establishment has grown into a strong network of grassroots linked entities. No doubt the network is strong, but sadly the human touch, the empathy, the compassion for its people are just based on formulated policies to increase the country GDP without honoring a need for a referendum based on its people's feedback. Even if there are such feedback channels, the people's voices have fallen to deaf ears. I'm not here to convince anyone to be with me, but it is crucial at this time to share what our other fellow Singaporeans have been facing and feel. It is really up to you, and to us, to decide. Whatever the outcome, God is fair and I believe democracy and justice will prevail. For the hundreds of years of Singapore history, it can only become stronger and more united.

    Ricky Oh

    1. Hi Ricky,

      In 2012-2013, UK's median annual income before tax is £21,000; £19,000 after tax.
      That's £1583 a month..

      To be fair, their taxes are also higher. For example, UK has a BASIC income tax rate of 20% for incomes above £10,600 (S$17,000).

      How much tax did his parent pay? possibly almost 0%.


    2. https://www.gov.uk/government/statistics/distribution-of-median-and-mean-income-and-tax-by-age-range-and-gender-2010-to-2011


      In case you claim I'm pucking numbers from the air...

  18. Please Budget Babe, for your own credibility sake write something that's worth to the title of your blog. You are pretty much unsure of your facts (though after challenged you are game enough to admit and say that you will further verified it) . Then how can you titled it as The Truth? I think this is very misleading and i seriously doubt your intention of doing this...despite your several disclaimer about not a personal attack to Dr Chee. I have no ill intention in commenting this neither am I a fan of Dr Chee. But to see such a blog having to present itself as the TRUTH yet fill with questionable facts are indeed disturbing to readers like myself. A case of POT and KATTLE?

    1. Hi Cedric,

      Actually, it should be "kettle", not "kattle". Mind your spelling, please.

      Also, I appreciate your sharing that you think my title has been misleading. However, I disagree with your view. I've written based on truthful facts and statistics that have been researched from multiple sources, even providing these sources for readers to verify themselves should they doubt the truth of my statements.

      My intention was to show people that the "truth" is not always what you think. I've never said Dr. Chee was lying, for the record, and I've also said his figures are right, just not presented in the full context, which is what I've tried to do here.

      The facts that I've presented I'm sure of, and where I'm not, I've highlighted the limitations. This is an open space for debate and I'm welcome to correcting any factual errors I might as made, as we all search for the truth together. I reference the UBS chart above, which was an honest oversight on my part, and rightfully corrected by Macroanalyst and Matthew Seah.

      If you think any of the other facts are wrong, please feel free to correct me by providing the right ones.


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  20. Just because there are always 2 sides to the same story. My first link to this blog post below is in no way endorsing his views but to ensure that all views are taken into account least we become bias. A charismatic leader always has the ability to sway listeners based on features other than the strength of the argument itself. While CSJs speeches definitely do spell charisma, they may or may not be well thought out. My second link is a blog post I did on how often times we are unaware of the biases we have have when we make decisions, and in this case political ones.




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  22. First of all may i say all gic and temasek are investment company. So should we look at the portfolio managed, and over the long period ie. 5 to 7 yrs, to then made a judgment? 2ndly these 2 orgs are our resergves and no govt in the world tell exactly how much one have as it isi inviting attack (like Malaysia in 1997). It is simple logic, suppose you want to buy a fish for 45 price at 50. Will the fishmonger sell you at 45 if he know you have 100? So 3rdly, then why our "wise" CSJ keep asking for gic & temasek to open books? Is he stupid? Or a ego-maniac to prove his allegation is correct at spore expense?

    1. Well, that's what SOME Singaporeans are calling for, isn't it? FULL disclosure, because it's THEIR money?

      Not my views, btw.


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    3. Yes, because some wise guy politician say so, and some blindly follow. I was debating a so call business asset mgt guy/woman, also asking for full discolsure, using the fish analogy, no answer. It obvious pple have ego, its ok to have, but please, you are talking about spore future, then please bottle up. Thier money? Its everybody money and our future generation money

  23. Thanks BB,

    I still believe that Temasek and GIC knows the investment better than retailers do. Many people focus on the investments that Temasek didnt do well such as ICBC, Citibank. They made many good investments too.

    For instance, they owned Alibaba shares before IPO, sold off some at a v good returns, as well as Cosco at it's peak at 2008.

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