If you are buying shares of a local listed company, e.g. DBS or SIA, do you expect to receive dividend or performance forecast in US$? So, why are you receiving GIC financial information in US$?
SIA, DBS, CapitaLand,
Sembcorp, Hyflux, and other listed companies have investments and income from
overseas. Do you accept their annual
reports in US$? And they give you dividends
in US$. The answer is No.
Local investors will be very
confused if Singapore companies give their sales forecast and business performance
in non-Singapore dollars. It is like a
Singapore investor buying USA or European shares or bonds without considering
the foreign exchange risks. Or, maybe the Government Investment Corporation of
Singapore is doing the same and so we have the following news:
[GIC reports use nominal return in US dollars to avoid confusion: Josephine Teo]http://www.straitstimes.com/breaking-news/singapore/story/gic-reports-use-nominal-return-us-dollars-avoid-confusion-josephine-te
Reporting GIC performance in
US$ is what kind of behaviour? - Butterfly or Frog#1. To the PAP government, it
is a butterfly so that they can show you our reserve in US$ - an international
currency flying here and there all over the world. And to the stakeholders or
the general public, the PAP is treating them like a frog. Frog lives in a well
and knows nothing about the outside world.
So, the PAP pretends to
present a GIC butterfly to the public and assume the public are frogs and they
don’t know about the operations of international finance.
Coincidently, the citizens
also think the PAP is behaving like a beautiful butterfly but they are not
frogs as they want to find out the true colour of the butterfly. The PAP tries
very hard to present a US$ butterfly.
However, we want to see the butterfly in S$. Is this so difficult? Yes, according to a PAP
MOS: [Minister of State for Finance Josephine Teo explained that the GIC
stopped publishing its nominal returns expressed in Singapore dollars three
years ago, to avoid confusion when comparisons are made with other fund
managers or global indices.]
The PAP is afraid of confusions
or comparisons. Our GIC in US$ is a confusion to Singaporeans. We don’t even know
our reserve performance in our own currency! This is really uniquely Singapore. Perhaps, in US$, the GIC butterfly
shows its beautiful side and in S$ it is another colour- a colour that the PAP
government finds it hard to present. Why do comparisons bring confusion when
the PAP government has all the fact to present?
Perhaps, our butterfly when
compares with other international fund managers or sovereign wealth funds is
just a little red dot – not that colourful and beautiful.
According to Professor Kishore
Mahbubani, happy butterfly seems to be objective and unhappy frog tends to be
subjective. #1
However, the GIC presentation
in US$ is really not objective at all. It
is confusion and is afraid of international comparisons. No wonder, the PAP has
to think negatively about Singaporeans and assume citizens are frogs – thinking
subjectively and always unhappy about the presentation of our reserve.
Think about it if you are investors,
employees or civil servants, you will only get to know the company performance in
US$ (and paid in US$), not in S$, do you want to invest or work for this
company?
If we accept this type of
argument (return in US$), then we are really the boiling frogs or well frogs. Boiling frogs mean we don’t know our reserve
performance at all and its risk level without check and balance. Well frogs mean we don’t care about the
reserve and let the PAP decide without transparency and accountability.
This argument may also lead
to future reporting in other currency, e.g. euro, Chinese Yuan. Since the PAP assumes we agree with the US$ reporting,
they may even come out with multi-currency reporting depending on which
butterfly is most suitable and presentable.
#1
[Singaporean society could either emerge as a happy
butterfly, flitting around in a garden city, or it could emerge as a lonely
frog, croaking away unhappily in a little well.
Objectively, the odds should favour a happy outcome.
Subjectively, we seem to be headed for an unhappy outcome.]
http://www.straitstimes.com/breaking-news/singapore/story/singapore-butterfly-or-frog-20130309
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