I refer to the article "Rogue trader at UBS racks up S$2.48b loss" (Sept 16).
The Government of Singapore Investment Corporation (GIC) became the largest shareholder in UBS last year when it converted notes it bought in the bank into ordinary shares at a conversion price of 47.7 Swiss francs (S$67.6) a share.
UBS shares closed at 9.75 Swiss francs the day the loss was announced. Given GIC's original 11-billion Swiss franc investment in 2008 and the 2 billion Swiss francs it received in interest in the first two years, its paper loss was about 6 billion to 7 billion Swiss francs at Thursday's price.
GIC is one of three key institutions managing reserves and investments for Singapore. The other two, the Monetary Authority of Singapore and Temasek Holdings, adopt a high level of disclosure, including the value of their portfolios.
The same cannot be said of GIC, which has relied on the argument that disclosure of its numbers would weaken Singapore's ability to fend off speculators.
However, in view of the erosion of the value of Singapore's investments in Western banks such as UBS, it will be increasingly challenging to expect Singaporeans to accept GIC's position of non-disclosure.
It is only fair that Singaporeans are kept updated on the value of GIC's holdings, the last piece of the reserves puzzle.
GIC should not underestimate the negative fallout that eroded investments might have on its reputation and, ultimately, on the Government, which has pledged more engagement and openness with the people.
No doubt, there are conflicting interests and needs, so I am keen to also hear from our newly-elected President on this matter.
ORIGINAL SOURCE
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