MAS reports loss of S$9.2 bn for FY 08/09
The unprecedented global financial crisis has weighed heavily on financial markets worldwide, leading to severe declines in valuation across many asset classes amidst heightened market volatility. MAS’ investments were negatively affected by the crisis. As at the close of the financial year on 31 March 2009, MAS recorded a net loss of S$9.2 billion, about 3.5% of MAS’ average total assets. This compares with profits of S$7.44 billion in the previous year and S$3.85 billion in FY06. This severe crisis has therefore pared back about 80% of the gains in the preceding two years. The extent of loss has been mitigated as we raised the liquidity profile of our portfolio in the early part of 2008, in the face of greater uncertainties. With the broad based upturn in financial markets after the close of the financial year, the valuation of MAS’ foreign assets has improved and more than half of the losses have been recovered.
Still MAS is but one of three institutions in Singapore which manages its wealth. The other two are sovereign wealth funds Temasek Holdings and GIC Singapore. It’s evident from the outright news disclosure above that of the three, MAS has been the most transparent, followed by Temasek. GIC Singapore, for which we have absolutely no official figures (or even percentages) on its portfolio losses is the least transparent of all. On a side note, GIC’s board of directors are full of politicians.
Are we suppose to conclude that transparency is inversely proportional to the number of politicians involved?
Update: FT just reported on MAS’s losses:
Separately, the Monetary Authority of Singapore, the city-state’s central bank, disclosed that it posted its first ever loss in the last fiscal year as equity investments suffered from the global financial crisis.
The bank suffered a loss of S$9.2bn in the year to March 31, but said that the recent global stock market rally has led to half that amount being recovered.
MAS reported that it had total assets of about S$265bn as of March, with 96 per cent invested in foreign assets, mainly in fixed income and a smaller portion in equities and bank deposits.
The financial turmoil last year ”pared back about 80 per cent of the gains” that MAS had recorded in the previous two years, said Heng Swee Keat, MAS managing director.
In response, MAS has raised its total capital and reserves to S$21bn, about 11 per cent of total assets, which ”will position us well to navigate through a potentially volatile financial market environment,” said Mr Heng.
The performance of MAS, whose losses accounted for 3.5 per cent of of its average total assets, was better than that of the local sovereign wealth funds, Temasek and Government of Singapore Investment Corporation.
Temasek suffered a 31 per cent fall in the value of its assets between April and November last year, according to the finance ministry. GIC’s portfolio shrunk by about 25 per cent from the global market peak in October 2007 to the end of last year, according Lee Kuan Yew, chairman.