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SINGAPORE : The Ministry of Finance (MOF) is in talks with the Government of Singapore Investment Corporation (GIC) on a public document that would shed more light on the various aspects of its investments.
This was revealed by the Minister of State for Finance Lim Hwee Hua in Parliament on Monday.
She also told the House that the government is far from being a passive observer in the current global debate on Sovereign Wealth Funds. Singapore is instead actively engaged in dialogue with investment-recipient countries like the US.
Sovereign wealth funds have been in the spotlight recently because of high-profile investments into major global financial players hurt by the current credit crunch.
There are concerns in the West about the influence that they may wield as a result of these massive capital injections.
Temasek Holdings and GIC are now key shareholders in global names like UBS and Citigroup.
But here in Singapore, MPs were more worried about the strength of the investment decisions. They asked whether the government had sufficient oversight of the two investment agencies.
Inderjit Singh, MP, Ang Mo Kio GRC, said: "The current hands-off approach has resulted in both GIC and Temasek investing heavily in banks - a total of more than S$30b, with a further investment of S$14 million by GIC, which was announced on 28th February.
"While each GIC and Temasek portfolio may make sense individually... does not the minister think Singapore Inc as a whole may be too over invested in the financial portfolio as a whole? I feel MOF has to better manage the two to protect our reserves."
Replying, Mrs Lim said both agencies have a single objective of maximising long-term returns on their portfolios without any political agenda. This does not mean that government will wash its hands off entirely. Rather, its job is to ensure that both agencies have competent boards and it regularly reviews reports on their overall investment performance.
Mrs Lim said: "The danger of any higher level of oversight is that the government could end up micro-managing. It would give others the mistaken notion that the government influences the individual investment decisions of GIC and Temasek, and will raise concerns."
There have been calls for greater transparency on investments by sovereign wealth funds. Here in Singapore, discussions are underway for GIC to shed more light on its investments.
Mrs Lim said: "The Ministry of Finance is in discussions with GIC on a public document that would further clarify the processes, governance and purposes for its investments."
She also noted that Singapore is part of the global effort towards developing voluntary best practices by sovereign wealth funds and that both Temasek and GIC enjoy a high degree of respect among investment-recipient countries.
Since 2004, Temasek Holdings has published an annual review, highlighting its activities and performance. - CNA/ch
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