How many “Arriums” do CPF members/GIC own?

By: Phillip Ang

I refer to ST article “GIC keeping close tabs on cash-strapped Arrium” dated 26 August. Why is it keeping tab on Arrium only after its shares have become worthless?

If GIC had been monitoring its investments, it would have aware there were fundamental changes affecting the company, got rid of the lousy investment and at least recoup some money. Now that its entire investment has been wiped out,what is there to keep tab on?

Arrium did not go into voluntary administration yesterday, last week or last month but some four months ago. Despite massive losses of more than A$400 million, MSM was dead silent. And out of the blue, this became news today (26 August 2016).

Coincidentally, I posted “Another CPF/GIC investment gone ‘pock kai, more than A$400 million loss” yesterday (25 August). This was with reference to Arrium.

The ST report stated GIC held only 8.21% of Arrium. This needs some clarification. GIC held 8.21% of Arrium in March 2015 …..

..but it had increased its shareholding to 9.33% by June 2015 according to its Form 604 submitted to the Australian Securities Exchange (below).

According to the filing, GIC had increased it stakes between 7 March and 29 May 2015 and 29 May 2015.

A favourite ‘strategy’ of GIC (and Temasek) is ‘bottom fishing’, ie anyhow buy when when prices have collapsed. GIC has been repeating mistakes made by novice investors.

Arrium was ‘cheap’, value for money, to GIC because it had fallen from a high of about $3.50 in 2010. Arrium is now cheaperer but CPF members are poorer.
The share price of any company doesn’t tank for no rhyme or reason and it’s about time GIC ceases to assume all other investors are stupid. Granted collapsed share prices may recover, GIC’s record speaks for itself, ie UBS and Citi are still near record lows after 8 years.

GIC must manage our CPF in a responsible manner, no more hoping for miracles or ‘tikam tikam’.

GIC should bear in mind that it is not investing PAP funds, Ah Kong’s money or on behalf of their directors’ families: $300 billion belongs to CPF members. Ordinary citizens slog a lifetime to enjoy our retirement: we do not want the PAP to continue tweaking CPF rules to delay CPF withdrawal due to heavy investment losses which could have been prevented.

What’s worrying is there are many other mini Arriums in China, India, etc which will make headlines during the next financial crisis. How many ‘Arrium” investments do CPF members own?

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Republished from the blog ‘ ‘likedatosocanmeh‘.