Martin Lee @ Sg
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MAS Reports Loss of S$10b in 2010/11 Annual Report

In the latest issue of the MAS Annual Report, Singapore’s GDP forecast remains at 5-7% range, while inflation is now expected to be 4-5%.

And while MAS made investment gains of S$12.3 billion, there was an overall loss of S$10.9 billion when the investments are converted to Singapore Dollar terms. This was due to the strong appreciation of the Singapore Dollar versus the USD and Euro over the past year.

Which means that forex losses contributed to more than S$20 billion. :O

Well, at least MAS did not try to hide the losses by reporting its performance in USD terms (as what another entity tried to do).

If you look at the statement on our reserves updated by MOF very recently (because of the Presidential Election), you can see that the official size of the foreign reserves managed by MAS is S$295 billion, so the forex losses would be quite in line with the appreciation of the Singapore Dollar.

Investing in overseas assets always carries currency risks. I know a few people who like to buy US listed stocks, but personally, I seldom buy overseas stocks directly. Any investment gains (if any) would have been eroded by the strong performance of our currency in the past few years.

And being a small investor has its advantages in that the SGX already offers enough opportunities to deploy my funds to use.

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4 comments
VSL says 7 years ago

Hi ML,

Read MOF’s website on the Reserves Mgmt Framework. Pls clarify a few pts:-

1. Is the Official Foreign Reserves managed by MAS of S$295 billion a Past Reserve to be managed and protected by MAS? Does MAS manage present Reserves?

2. The same web page says “the size of Temasek’s portfolio was S$193 billion”. Is this also considered a Past Reserve that must be protected by Temasek?

3. I can accept that GIC’s past reserves are super confidential. However, will the figures be made known to the President privately (and not to the whole world)? If not, the President will not have a complete picture of what he is supposed to protect.. Monies can be drained out from GIC’s past reserves right under the President’s nose.

4. When the govt says that our CPF monies are protected and guaranteed, come hell or high water we will get our CPF monies back, regardless of a crooked govt in power. Is this correct? Tks.

Reply
    Martin Lee says 7 years ago

    Dear VSL,

    1) I believe the numbers should be last available figures.

    3) It was also mentioned on the page that the figures for GIC will be made available to the President.

    4) The guarantee is only as good as the person who is guaranteeing it. If the government changes the rules, what can you do?

    Reply
Jackson says 7 years ago

This statement is technically incorrect isn’t it? 😉
“I seldom buy overseas stocks directly.”

Reply
    Martin Lee says 7 years ago

    Hmmm… the key word is direct. Most of my stock purchases are done via SGX. 😛

    Reply
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