Published March 2, 2009

PM: Look at GIC's overall performance

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BEING invested means riding the ups and the downs of the market, the Prime Minister reiterated, when asked to comment on the Government of Singapore Investment Corp's move to cut its losses and convert its Citigroup preference shares to common stock.

'If you are like Temasek and you are owning SingTel and SIA and DBS and Keppel and SembCorp - all of these shares have gone down; the Singapore stock market has gone down by half. If you just add up the losses on these shares alone, you're talking about S$30 billion or some very considerable sum, so what is the government to do ?

'Do you want us to sell off SIA because next year the price is going down, or SingTel? Do you want us to short these companies? Or short the Singapore market because you think the Singapore market is going to go down?

'You can't . . . these are long-terms assets. We are looking for long-term value, and we have to keep a long-term perspective.'

And that means taking the ups and the downs, and looking at the overall portfolio, he emphasised.

'And overall, we have performed well. In a bad year, like last year, this year, we probably will see shrinkage. But you have to take a long-term perspective because if you jump up and down and you want to break even or make money every quarter, I think you will not be able to have a sensible policy or a sensible outcome.

'You will end up not protecting your value, and it will be like buying gold which will do nothing, or putting your money in a safe deposit box, which also will do nothing, and we cannot do that.'

Rather than assess just the Citigroup investment, one must look at GIC's entire portfolio and overall performance, he said.

'Overall, over 20 years, it has done well and I think in this market, there is no fund which has done well,' he said. 'I mean, you look at all of the university endowments in America - down 20, 25 (per cent); Harvard is about 30 per cent (down). It is inevitable. If you are invested, you have to accept the ups and the downs.'