Singapore's GIC Losses About 33 Bln USD: Sources Print E-mail

AFP – 17 February 2009

Government of Singapore Investment Corp, which has helped bail out troubled global financial institutions, suffered an investment loss of about 50 billion Singapore dollars (33 billion US) last year, sources told Dow Jones Newswires on Tuesday.

In late 2007 and early last year GIC injected billions of dollars into Swiss bank UBS as well as US banking giant Citigroup, both of which suffered massive losses from US subprime, or higher-risk, mortgage investments.

Subprime troubles later evolved into the worldwide financial slowdown.

"The loss on the investment portfolio last year is estimated at around 45 billion to 50 billion," one of two people familiar with the GIC situation told Dow Jones.

"But, GIC has no thoughts to sell down any of its major investments. They'll wait until they recover."

UBS this month posted an annual loss of 17 billion US dollars, the largest in Swiss corporate history, and announced 2,000 new job cuts.

A second person said GIC's investment loss last year was "recently estimated to be similar to Temasek's."

The portfolio of Singapore sovereign wealth fund Temasek Holdings, which helped bail out Wall Street icon Merrill Lynch, fell about 31 percent over eight months last year, Senior Minister of State for Finance Lim Hwee Hua told parliament last week.

She said Temasek's portfolio of investments fell to 127 billion dollars at the end of November, down 58 billion from 185 billion dollars on March 31 last year.

Lim said it was not the first time GIC and Temasek had seen major declines in markets, and that GIC had "creditable returns" over the 20-year period to late 2008.

Asked for comment on the Dow Jones report, a GIC spokesman said the firm did not comment on "speculative reports".

GIC, one of the world's largest sovereign wealth funds, in September said its nominal rate of return over the 20 years to March 31 last year was 7.8 percent in US dollar terms.

"Temasek and GIC are long-term investors, and should be evaluated as such," Lim said. "GIC and Temasek have the ability and resources to weather the ups and downs, over multiple economic and market cycles."

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