IMF asks Singapore to help set SWF benchmarks

24 Jan 08

Singapore, along with Norway and Abu Dhabi, has been asked by the International Monetary Fund (IMF) to help set disclosure benchmarks for sovereign wealth funds, a local newspaper reported on Thursday, quoting Singapore’s Minister Mentor Lee Kuan Yew.

“We’ve put up certain ideas. They’re considering it. They are using us and Abu Dhabi and the Norwegians as benchmarks, to get us to set benchmarks for the rest,” the Straits Times quoted Lee, who is also chairman of the Government of Singapore Investment Corp (GIC), as saying in Riyadh.

“Whether that would work and make the Chinese and others also be as open, that’s another question,” said Lee, Singapore’s first prime minister, who is on a visit to Saudi Arabia.

GIC last week bought a stake worth $6.88 billion in Citigroup, just one month after its $9.75 billion injection into UBS AG, amidst rising global concerns of the influence of sovereign wealth funds of countries including China, Russia and the Middle East.

GIC’s sister investment firm Temasek Holdings last month also bought $4.4 billion worth of Merrill Lynch stock.

Lee said GIC is prepared to be more transparent about the sectors it is investing in, but will stop short of disclosing how much it invests in each sector.

“We’re not going to disclose just how much, year by year, we make or we lose because that’s none of their business. What they want to know is, ‘Are we manipulating the market?’,” he said.

Lee had revealed last year that the fund had earned an average return of 9.5 percent annually over the last 25 years in U.S. dollar terms.

The GIC invests more than US$100 billion of Singapore’s foreign reserves abroad. It handles three quarters of its portfolio internally and outsources the rest to external fund managers.

Lee said Singapore was a passive investor, whose funds were more finite than those of Russia, China, Saudi Arabia and other oil-rich countries.

He said he saw the current stock market crash as “a magnificent opportunity” for countries with reserves to acquire non-controlling stakes in some of the world’s largest companies, “which are bound to recover by the next cycle”.

(Reporting by Daryl Loo; Editing by Valerie Lee)

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