SINGAPORE'S OVERSEAS INVESTMENTS (Losses)

Mr Steve Chia Kiah Hong asked the Deputy Prime Minister and Minister for Finance whether Singapore has suffered big losses from its overseas investments.

Mr Lim Hng Kiang (for the Deputy Prime Minister and Minister for Finance): The focus of our investments is to preserve the long-term value of our reserves. Our philosophy is to maintain a well-diversified portfolio, with investments in a variety of asset classes spread across different countries, currencies and sectors. The investments range from global equities and global fixed income to special investments and real estate. Hence, while we may not have made spectacular gains during the dot.com era, we were also spared the huge losses when the bubble burst.

These are difficult times for investors. Equity markets around the world have come down sharply. But the impact of market movements on our portfolio is buffered by the diversified assets that we hold.

Singapore's investments overseas have produced good returns over the years. Our investments have generally done well relative to market benchmarks, such as the MSCI, as well as against portfolios managed by the world's top financial institutions and fund management companies.

Mr Steve Chia Kiah Hong: Sir, can the Minister clarify Dr Mahathir's comment that from their economic intelligence, Singapore had made big losses from investments? Second question: what is GIC's average investment returns over the past 10 years?

Mr Lim Hng Kiang: Again, I would not want to speculate on the basis of Dr Mahathir's intelligence.

An hon. Member: Intelligence report.

Mr Lim Hng Kiang: Intelligence report, sorry. Otherwise, that may create another big hooha. Let me rephrase it - intelligence report. Thank you.

On the question of average returns, as I explained in my reply earlier, the funds are spread over different asset classes, and we have different benchmarks by which we evaluate the fund managers who are given these funds to manage. So far, we have done well compared to these benchmarks. So, our returns are better than the benchmark returns.

Mr Steve Chia Kiah Hong: Sir, is the Minister denying that we are making big losses, as stated?

Mr Lim Hng Kiang: Sir, our investments have done well relative to market benchmarks. So, there will be places where we make losses and there will be places where we make gains. But we must look at it in the overall context. We must look at it in the timeframe that we use. We must look at it against the benchmarks. For example, when the market comes down 30%, to say that you do not make losses, you must be very, very good. But if the market loses 30% and you lose 25%, then you have done better than benchmarks. So, you must look at it from that perspective.