A Singapore sovereign wealth fund that bought large stakes in banks UBS AG and Citigroup Inc warned yesterday that the worst of the US financial crisis may not be over even if Washington implements a US$700 billion bailout plan.
The Government of Singapore Investment Corporation, or GIC, said the current turmoil in the US banking system will likely undermine the future earnings of the fund, which manages more than US$100 billion.
“The proposal put forth by the US Treasury should stabilize the markets to some extent,” said GIC deputy chairman and executive director Tony Tan (陳慶炎) at a news conference. “But we should not assume the worst is over. Financial markets and the economic situation have deteriorated significantly in the last five months.”
PHOTO: AP
GIC also regretted the timing of its investment in the two banks — US$9.75 billion in UBS in December and US$6.9 billion in Citigroup in January — said chief investment officer Ng Kok Song (黃國松).
“We would have liked the timing of the investments to be better,” Ng said. “But these are long-term investments.”
“We were surprised by the onset and magnitude of the market turmoil starting in July 2007,” Ng said in a statement. “What seemed like a contained problem of delinquencies in US sub-prime mortgages quickly spread to other segments of the credit markets.”
GIC, which began investing Singapore’s reserves in 1981, said its annual profit for the last 20 years averaged 7.8 percent in US dollar terms.
Tan declined to say what the fund’s earnings were last year or specify how much it manages.
“Given the present challenging conditions and the problems in the world economy, it is unrealistic to expect that we will achieve such high returns going forward as in the past,” Tan said.
Singapore’s other sovereign wealth fund, Temasek Holdings, said last month that earnings doubled to US$12.8 billion in its fiscal year ending March 31, bringing total assets to US$131 billion.
GIC said it invests 44 percent of its portfolio in public equities, 26 percent in bonds and 10 percent in real estate. It invests 35 percent in Europe, 34 percent in the US and 23 percent in Asia.
Former prime minister Lee Kuan Yew (李光耀) is GIC’s chairman and his son, current Prime Minister Lee Hsien Loong (李顯龍), is a deputy chairman.
A Chinese freighter that allegedly snapped an undersea cable linking Taiwan proper to Penghu County is suspected of being owned by a Chinese state-run company and had docked at the ports of Kaohsiung and Keelung for three months using different names. On Tuesday last week, the Togo-flagged freighter Hong Tai 58 (宏泰58號) and its Chinese crew were detained after the Taipei-Penghu No. 3 submarine cable was severed. When the Coast Guard Administration (CGA) first attempted to detain the ship on grounds of possible sabotage, its crew said the ship’s name was Hong Tai 168, although the Automatic Identification System (AIS)
An Akizuki-class destroyer last month made the first-ever solo transit of a Japan Maritime Self-Defense Force ship through the Taiwan Strait, Japanese government officials with knowledge of the matter said yesterday. The JS Akizuki carried out a north-to-south transit through the Taiwan Strait on Feb. 5 as it sailed to the South China Sea to participate in a joint exercise with US, Australian and Philippine forces that day. The Japanese destroyer JS Sazanami in September last year made the Japan Maritime Self-Defense Force’s first-ever transit through the Taiwan Strait, but it was joined by vessels from New Zealand and Australia,
CHANGE OF MIND: The Chinese crew at first showed a willingness to cooperate, but later regretted that when the ship arrived at the port and refused to enter Togolese Republic-registered Chinese freighter Hong Tai (宏泰號) and its crew have been detained on suspicion of deliberately damaging a submarine cable connecting Taiwan proper and Penghu County, the Coast Guard Administration said in a statement yesterday. The case would be subject to a “national security-level investigation” by the Tainan District Prosecutors’ Office, it added. The administration said that it had been monitoring the ship since 7:10pm on Saturday when it appeared to be loitering in waters about 6 nautical miles (11km) northwest of Tainan’s Chiang Chun Fishing Port, adding that the ship’s location was about 0.5 nautical miles north of the No.
SECURITY: The purpose for giving Hong Kong and Macau residents more lenient paths to permanent residency no longer applies due to China’s policies, a source said The government is considering removing an optional path to citizenship for residents from Hong Kong and Macau, and lengthening the terms for permanent residence eligibility, a source said yesterday. In a bid to prevent the Chinese Communist Party (CCP) from infiltrating Taiwan through immigration from Hong Kong and Macau, the government could amend immigration laws for residents of the territories who currently receive preferential treatment, an official familiar with the matter speaking on condition of anonymity said. The move was part of “national security-related legislative reform,” they added. Under the amendments, arrivals from the Chinese territories would have to reside in Taiwan for
RSS