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Joke No. 1
Ho Ching has done it again! Read this article from Straits Times. It's just one shocking revelation after another.
Ho Ching's ability to lead Temasek is proving to be rather questionable. She does not have even the basic knowledge of risk management to lead Temasek. And she totally exposed this today by saying :
In our Temasek Review last year, we reported an annual value-at-risk of almost $40 billion last March. This meant a 16 per cent probability for our portfolio value to drop more than $40 billion by March this year. Indeed, it has turned out to be so, and more,' said Ms Ho in her speech.
Not a risk person myself, I still sensed something was wrong. So I checked with a professional risk manager friend of mine, and he rubbished her statement. He said she probably got fed the info from her kakia that they operate with a 16%, 40billion VAR, which is traditionally a 99% Confidence Interval, or thereabouts, meaning in the tail event of 1% chance, which did happen this time, they would lose 40 billion, unless Temasek operates on a 84% Confidence Interval VAR, which is actually scarier than the prospect that Ho Ching does not know her risk management ABCs. Anyway, keep a lookout for my friend's professional analysis of her statement on his blog sgpirategame.
Joke No.2
To top off a good publicity day for Temasek, they also announced today that they "may allow" retail investors to co-invest. Read article here. Hahahaha. Another friend of mine, a hedge fund trader, told me he would "farkin liquidate everything if he could", and that "this must be the joke of the century".
But if we think about it, well the joke is on us, because we the citizens are in effect the unwilling investors by having our CPF funds invested in Temasek's bonds at 2.5%, which is kinda ridiculously low for a corporate bond that is obviously nowhere near low risk, one with an undiversified porfolio like theirs does not get to pay only 2.5% for their bonds in the free market.