Investment losses in FY08 mostly from its equity portfolios
By ANNA TEO
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(SINGAPORE) The Monetary Authority of Singapore (MAS) has not been spared the ravages of the global financial crisis - the central bank posted its first ever loss of $9.2 billion at the close of its 2008 financial year in March, largely from declines in its equity portfolios.
The $9.2 billion loss amounts to about 3.5 per cent of MAS's average total assets, and compares with profits of $7.44 billion in the preceding FY07 and $3.85 billion in FY06, MAS managing director Heng Swee Keat disclosed yesterday at a media conference on its FY2008 annual report.
'This severe crisis has therefore pared back about 80 per cent of the gains in the preceding two years,' he said, adding that the extent of loss had been mitigated as MAS had raised the liquidity profile of its portfolio in the early part of 2008 in the face of greater uncertainties.
And, with the broad upturn in financial markets after the end of the financial year in March, the valuation of MAS's foreign assets has improved and more than half of the losses have been recovered, Mr Heng said.
As at March 2009, MAS's total assets amounted to about $265 billion, of which some $255 billion, or 96 per cent, were in 'foreign assets'.
The foreign assets included some $31 billion in bank balances and deposits, and $223 billion in securities, including treasury bills, bonds and equities.
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Mr Heng told the media that MAS's investments are in highly liquid assets, mostly bonds, with a small exposure to equities in the developed markets such as the United States, Europe and Japan.
Its investment losses in FY08 stemmed mostly from its equity portfolios.
'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,' Mr Heng noted. MAS's investments were no exception.
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