Why only PAP ran town councils made losses in investments?

[Without_a_car]

Title : Two town councils invested S$12m in Lehman-related structured products

By :

Date : 17 November 2008 1646 hrs (SST)

URL : http://www.channelnewsasia.com/stories/sin.../390407/1/.html

 

SINGAPORE: The financial health of two Singapore town councils remains in the black despite their investments in failed Lehman-linked structured products. Holland-Bukit Panjang and Pasir Ris-Punggol Town Councils invested a combined S$12 million using their sinking funds.

 

Going forward, the co-ordinating chairman of PAP town councils, Dr Teo Ho Pin, said future investments will remain diversified but will be on the conservative side.

 

Just like thousands of Singaporean investors who have lost money on failed Lehman-linked structured products, the Holland-Bukit Panjang Town Council may lose its S$8 million investment.

 

The town council invested 6.7 per cent of its sinking funds available for investment in Lehman Brothers' Minibond Notes, DBS High Notes 5 and Merrill Lynch's Jubilee Series 3 Notes.

 

It had invested another S$3 million in Pinnacle Notes Series 6, but this investment was unaffected.

 

For Pasir Ris-Punggol, its S$4 million investments in the Minibond Series 2 and 3 amounted to 2.6 per cent of its funds.

 

Based on the 14 PAP town councils' latest financial statements submitted to the National Development Ministry, these investments amounted to 0.6 per cent of their total funds of S$2 billion.

 

Like many others, the town councils are anxiously waiting to see if the Lehman Minibond notes will be making dividend payments next month.

 

Dr Teo Ho Pin, chairman, Holland-Bukit Panjang Town Council, said: "If there is a credit event that occurs next month for the Lehman Brothers' Minibond, then that will be a default and... there'll be a loss on that investment."

 

Town councils can invest up to 35 per cent of their sinking funds in financial instruments like equities, corporate bonds and funds.

 

Holland-Bukit Panjang Town Council said while its investment income will be reduced as a result of the failed investment, its financial status remains in the black and improvement works will not be affected.

 

During a six-year period starting from 2002, the return on its investments totalled about S$24 million. As of March 31 this year, it also has a total kitty of S$118 million.

 

Over the last six years, the Holland-Bukit Panjang Town Council made a healthy investment return of more than four per cent every year. This is well above the average fixed deposit return of 0.9 per cent. With the investment income, the town council has been able to deal with the impact of inflation.

 

Dr Teo continued: "Our assurance to our residents is that the sinking fund is still intact. We have adopted a very prudent approach in terms of investing our funds.

 

"We have to continue to adopt a diversified investment strategy so we are able to achieve healthy returns for our town council funds, cyclical maintenance purposes and we have to balance between investment risk and returns."

 

Six other PAP-run town councils also have exposure to Lehman Brothers through their fund managers' investment portfolio.

 

These investments total some S$4 million and account for less than one per cent of each town council's funds available for investments.

 

The National Development Ministry said it has no plans to amend the investment guidelines it has put in place as town councils are in the best position to decide how to manage the funds.

 

Senior Minister of State for National Development Grace Fu told Parliament on Monday it was not practical nor desirable for the ministry to be overly prescriptive in enforcing the guidelines, which seek to achieve an optimal balance between reasonable returns and financial prudence.

 

Hougang and Potong Pasir Town Councils, the two that are managed by opposition MPs, have earlier said they do not have any investments related to Lehman Brothers products and their sinking funds are not affected by the failed financial instruments. - CNA/vm

 

 

 

 

 

 

 

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[Kwchan]

They also invested in Creative Technology when their price was at record high!

 

http://zh.sgforums.com/forums/10/topics/295035

 

According to Creative Technology's (CT) annual report, Holland-Bukit Panjang Town Council (HBPTC) was listed as one of the majority shareholders with 530,000 shares currently valued at about $3.2 million. I understand that CT's share price from 2003 to 2007, has ranged from a high of $27.30 to it's current price of $6.10 on 12 October 2007.

 

According to CT's Statistics of Shareholding as at 19 August 2005, HBPTC held 200,000 shares. The CT high price for fiscal 2005 and 2006 was $27.20 and $14.40 respectively. Does this mean that the 200,000 shares could have cost as much as $5.4 million?

 

Creative shares worth only $3.4 today and HBPTC bought at $27.20 and $14.40 last time, not sure if they managed to get rid of the shares early to cut lost?

 

http://sg.finance.yahoo.com/echarts?s=C76....le=off;source=;

Edited May 6, 2011 by Kwchan

[Falcon1668]

If town council make money fron these investments, will they-

1. distribute the profit to the people?

2. reward themselves with big fat bonus?

3. reduce our monthly charges?

or what?

[Good-Carbuyer]

A-Team performance track record?

[Good-Carbuyer]

Negligence?

Edited May 6, 2011 by Good-Carbuyer

[Hosaybo]

Question is........ Is all the glamour highlighted so that they can justify big bonus and the dirty little failures swept under the carpet so that nobody knows? Transparency, that is what the people need. We were told it is there but nobody can see!

[Edwardthy]

Y are PAP town councils allowed to use sinking funds to invest in shares??!!! arent they our money paid from conservative taxes?? WTF.............

Edited May 7, 2011 by Edwardthy

[Grindcore888]

win = town council to enjoy

lose = residents to bear

 

 

 

If town council make money fron these investments, will they-

1. distribute the profit to the people?

2. reward themselves with big fat bonus?

3. reduce our monthly charges?

or what?

 

[Kwchan]

Y are PAP town councils allowed to use sinking funds to invest in shares??!!! arent they our money paid from conservative taxes?? WTF.............

 

they can invest up to xx%, but the point is whether there was enough due diligence when choosing what to invest...or they just follow the finance adviser blindly? and where is the transparency & accountability if the investment goes wrong?

[Blueray]

 

same issue : No Accountability ...

 

self check and balance ... pui ....

[Tony76]

everytime they need to pull out of an investment, they need to submit paper for approval so everytime late n kana screwed themselves!hahaha

[Kwchan]

same issue : No Accountability ...

 

self check and balance ... pui ....

 

now we have WP take over a GRC, let's see what they can discover after open up TC account

[Felipe]

guys, cool down. it's based on trust. u don't question. u just trust them with your money. apparently, 60% of sporeans TRUST the pap

[Without_a_car]

guys, cool down. it's based on trust. u don't question. u just trust them with your money. apparently, 60% of sporeans TRUST the pap

 

40% of Singaporeans don't trust MIWs. 6.6% increase from the last election.

Edited May 9, 2011 by Without_a_car