Daily Lessons from Life 23 September 2009

"GIC profits on partial sale of Citigroup stake
It made a $2.2 billion profit as global equity markets rebound. -Wed, Sep 23, 2009 Reuters

SINGAPORE - The Government of Singapore Investment Corporation (GIC) said yesterday it had halved its stake in Citigroup to below 5 per cent, making a profit of US$1.6 billion (S$2.2 billion) as global equity markets rebound.


Analysts said GIC, Singapore's largest sovereign wealth fund, took advantage of a rally in world stocks to take some money off the table. The sale also suggested that the fund may have some concerns about the outlook for global banks.

'Perhaps, timings-wise, GIC benefited from the rally,' said CIMB economist Song Seng Wun.

'The sale also reflects underlying concerns that, although global institutions may have seen their darkest days, there could still be uncertainty ahead, as OECD countries in particular could see patchy growth as a result of the recession.'


From late 2007, GIC ploughed billions of dollars into Citigroup and UBS and, like other sovereign funds, suffered initial losses on battered global banks as the financial crisis hit."

GIC was closely watched by Singaporeans as its sister government investment company, Temasek, had been in the limelight lately for the wrong reason! Making big unrealized losses and realized losses! GIC itself has suffered drop in its portfolio by as much as 50B, reportedly!!

Lessons for me are:

1. when you are in public eyes, you have to take the good and the bad the public threw at your? When you claimed to be the best in the business that deserved to be paid the best, be ready to take the heat when you are not performing!;

2. the public media, however, may not cooperate for whatever reasons. Maybe someone believed GIC and other state investors cannot be criticized! Maybe someone want to get into someone else good book! This is the most disturbing aspect of this 'look! the government investment companies lost billions but never get blamed and no one took responsibilities' episode!;

3. if we look objectively, the rationale provided by GIC for taking the money off the table while still staying invested at 1/2 the share before the sale is acceptable. No one really know which way it is going to go in the next few months!

May GIC continue to make the rationale for the major investment in- or -out decision transparent. Please make more money for my CPF retirement account!