Wealth Management Singapore

Temasek Holdings is one of the most high-profile investors in Asia, so changes to its charter are bound to attract attention. In Singapore, where citizens’ interests are at stake, this is up to even bigger scrutiny, though public opinions are incapable of any influence on the institution’s actions.

Temasek Charter reiterates Temasek’s focus on long-term value

The Good

This review and update ensures that the Charter remains relevant to the institution’s activities and aspirations. It also shows the institution’s ability to adjust its purpose in a changing environment. The Charter is expected to be updated when necessary.

Temasek Holdings sees itself as an investment company managed on commercial principles, and distanced its decisions from influence by the Government.

Though denied, one reason behind the change must be to avoid over scrutiny and critic of it being a sovereign wealth fund and ease complications in the institution’s investment overseas. The wordings “for the long-term benefit of Singapore” have been changed to “for its stakeholders”

It is also true to view that Temasek Holding’s main role has shifted from being a steward to the Government-linked companies to managing and growing the fund it is given by the Ministry of Finance. The role of divesting the Singapore Government’s stake in Singapore companies is no longer significant and hence removed.

I believe the Charter is meant to pave a way for Temasek Holdings to take on a role more like an asset manager while having the Government still in control over particular issues of security and interest. Talks of accepting private investors have surfaced in the media.

The Bad

Clever as it is, the attempt to clarify that Temasek Holdings is an asset management company run on commercial principles draws cynical opinions from Singaporean citizens. In saying that the relationship with the Singapore Government is a “normal institutional relationship between a company and its shareholder”, Temasek Holdings is seen as avoiding criticism from Singapore citizens of recently losses made. If indeed Temasek Holdings is to mold itself into an asset manager like any other, it will have to grapple with competition and standard practice of the market. Such includes audited reports and disclosures of management fees and remuneration.

There has been some developments lately about the way newspapers and media companies are approaching online content. These couple of changes is likely to have a global impact on publications around the world.

The Paper That Doesn’t Want to Be Free

Murdoch Mans Up

New York Times to charge for online content

A couple of years ago, The Financial Times stood alone in believing that they can succeed in charging for their site FT.com. Now many publishers are realising quality journalism should be paid for.

The move by Rupert Murdoch News Corp’s to start charging for online content will affect news websites visited by millions of people around the world, including popular tabloids like the New York Post, The Sun in London, as well as other papers such as The Times of London. Its large Australian newspaper stable includes Melbourne’s The Herald Sun, Sydney’s The Daily Telegraph and the nation’s only national newspaper, The Australian. The Wall Street Journal, owned by News Corp’s Dow Jones unit, already charges for access to portion of its site and has some free stories.

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The answer to that question is NOW! Here is the 3 possible scenarios U-shaped recovery, V-shaped recovery, W-shaped recovery and why.

 drawn on MSCI World Index, area circled is NOW.

I’m not saying if you have $200 thousand, you should go dump in all into investment tomorrow. As one of the risk management strategies, break it up into a few tranches. It is impossible to time the market to the exact day. You would have been incredible if you can catch the low prices of a few months. Based on 3 assumptions: that there IS eventually going to be a recovery; your time horizon is 3 years or above; and you haven’t lost all your liquidity.

Of course, risk management and liquidity management applies. We do not have a gambling problem.

Nouriel Roubini, generally hailed for predicting the financial crisis that has swept the world over the past two years, said there was now “a big risk” that the global economy would slip into a W-shaped recession. However, he puts forth reason why he believes it will be U-shaped, anaemic and below trend for at least a couple of years.

He commented on 3 questions. When will the global recession be over? What will be the shape of the economic recovery? Are there risks of a relapse?

Looks like the global economy will bottom out in the second half of 2009. US, UK, Spain, Italy, other eurozone members and some European emerging market economies recovering next year. Australia, Germany, France and Japan; China, India, Brazil and parts of Asia and Latin America this year.

He argues against majority economic consensus who expect a V-shaped recovery supporting a it U-shaped. Following are the points

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In some developed countries, a financial adviser is a professional. The profession consist of highly educated and respected members of society. In Singapore, given the low entry criteria, financial advisers are looked upon as uneducated and people who cannot land better jobs, such as lawyers, engineers, doctors, etc. A friend once asked me why I would consider this role given my ample academic qualifications. Many have asked me when I said I am a financial adviser, “you mean selling insurance?”

In UK, they are talking about plans to ban commission payments from product providers and force financial advisers to agree fee payments with clients upfront.

FSA calls for an end to adviser commission deals

I believe a lot of other sites will pick this up and leverage on this article published in The Straits Times as a marketing tool. I’m going to appeal to consumers not to jump into conclusions. Please find out more on what is the purpose and cost of insurance. Talk to a few professional sources to get a good picture, you’ll be surprised that some quotes are double others with the same benefits and returns.

Moral of my passage, you must find out what you need and the best value for money for it.

Singaporeans Grossly under-insured Study

There was an column published last Friday in Business Times. Just some thoughts.

Regaining bank clients’ confidence

“A fifth of the Asian banks surveyed have lost more than 25 per cent of their client assets, compared to the global average of 10 per cent of banks”

One of the main reasons is that the AUM of Asian banks are newer and have been managed for a shorter time. Unlike in developed western countries where wealth have been with banks for decades if not generations. Another related reason is also the ‘trading’ and ‘quick buck’ mentality of the clients and short term ‘bonus maximizing’ mentality of RMs. Banks, the RMs and clients are responsible for this. How many of you truly believed that the banker who sold you the 5-yr Structured Product will be there for the whole period?

The push for “transparency and simplicity” and “open architecture” is good for clients. I have thought for some time that the usual affluent client do not need complex structures and derivatives just to achieve the extra bit of returns. There was a time it seems that products will be so complicated that even RMs will have difficulty appreciating them.

Majority clients accumulate wealth from their profession or business. Best approach for them is to continue to do so, while having prudent growth for wealth accumulated.

Yesterday, the Australian and New Zealand dollars traded near the highest level in 10 months after Reserve Bank of Australia Governor Glenn Stevens said he will have to raise interest rates at some stage as the economy recovers. This is to guard against inflation.

Elsewhere, global fund managers are betting China will let the yuan strengthen for the first time in more than a year to keep inflation at bay following a flood of foreign capital and record lending. New loans in China almost tripled to $1.1 trillion this year, contributing to a 60% surge in property sales. A US$585 billion stimulus plan helped July’s retail sales rise 15.2% from 2008. Reserves swelled to US$2.1 trillion on June 30 after a record quarterly jump as overseas investments led China to sell yuan to hold it down. The Shanghai Composite Index, Asia’s second-best performer this year with a gain of 72%, is in “bubble territory”.

The predicted appreciation in Yuan pale alongside six-month rallies of 18% and 14% for the Indonesian rupiah and the Korean won.

All these bodes well for Asian currencies and fund inflows. Asian stocks rose after the U.S. Federal Reserve said the recession is easing and pledged to keep interest rates low.

U.S. Federal Reserve statement on Wednesday provided 3 points which boosts the market. Firstly, Fed pledged to keep interest rates low, boosting share prices on a short-term basis. Secondly, Fed said the U.S. economy is “leveling out”, meaning it is time now to wait for positive signs. Thirdly, the Fed will stop buying U.S. treasuries directly from the U.S. government by October. This is seen as a huge sense of confidence by the Fed and also made countries holding huge U.S. dollar reserve happy.

Short-term volatility will still be present. This week, Shanghai Composite Index fell, completing the worst week since February, on concern this year’s rally has overvalued the prospects for earnings growth.

As medium to long term investors, you should concentrate on the second and third point stated above. These 2 points points to a positive outlook over 3 years period, especially in Asia.

I wonder how the results for this poll, done on Singaporeans, will be.

There has been much controversies surrounding the issue of where he was born. Searched online for 15 minutes and got tired. Make your own conclusion.

However, I do feel that it should be what U.S.A is about a truly globalised nation. Even if you are born, bred, worked overseas, if your heart belongs to the nation, you should be. Idealism of course.

There has been much controversy over Goldman Sachs recent success despite the sub-prime, financial and subsequently economic crisis. I believe most of the fuss, at least at the consumer level came about with this piece by Matt Taibbi, writer with Rolling Stone. It is strange, I always thought Rolling Stone is a magazine only rockers and emo-kids get from HMV.

The Great American Bubble Machine

Gist of the article
Goldman has a part to play in the Great Depression by playing up investor sentiments thought layers of investment trust.

Goldman’s underwriting standard and tactics for IPO were questionable. Amidst all the enticement for investors to subscribe, they knew the companies were worthless and protected themselves from any losses.

Similarly, Goldman knew the sub-prime mortgages packaged into CDOs would default not long after they started structuring them. Goldman continued to sell them while having a short position in the CDOs.

Through influence they have in the US government, therefore regulations in commodities trading, they are able to manipulate the market. Goldman released analyst reports and forecast for oil to reach US$200 a barrel.

Through this influence too, they are able to rigging the bailout, receiving funds and payment from AIG, letting competitor Lehman Brothers collapse and finally totally unharmed and extremely profitable. Taibbi also has a problem with the fact that Goldman paid so little tax in 2008. US$14 million in tax while paying out $10 billion in compensation and benefits and made a profit of more than $2 billion.

The next big global bubble to be exploited is the carboncredit market. Goldman has been positioning itself to push for the legislative approval for the framework and opening a market for carboncredit. Same reason why oil trading disrupts supply/demand, Goldman wants a big slice of the pie.

Conclusion, Goldman has been inflating bubbles around the financial assets to profit from it and has influence to do so.

Nice piece, I wish I had the narrative gift of Taibbi. However, technically, it has a lot of flaws. Goldman is just better at making money this time round. Many financial institutions are involved in the tech bubble and oil trading as well, and profited from it. I believe that there might be some bending of ethical standards in Goldman’s pursuit of profits, but the conspiracy theory is hard to swallow. Furthermore, the much information and details are that are pieced together have little relevance to the issue.

If you are not afraid of being even more confuse, you can read a view by another columnist. Then again, I’m not sure she is in the finance profession.

Matt Taibbi Gets His Sarah Palin On