On Friday 21 February state media carried an announcement from MAS that it will launch a “new S$5 billion programme that involves putting money with fund managers focused on investing in Singapore stocks”MAS said it would start the process of evaluating eligible fund managers and strategies over the next few months.

The total market capitalization of companies listed on the Singapore Stock Exchange (SSE) is only about US$630 billion, which is insignificant in the global context where companies listed on the principal US exchanges, Nasdaq and the NYSE, have a total market capitalization of nearly US$60 trillion. The SSE is only about 1% of the US figure. Even Indonesia has a bigger market cap than Singapore now, though that’s to be expected given its total population of some 40 times ours. But still $5 billion, or US$3.7 billion, is less than 1% of the Singapore market. It’s difficult to see how that would make any difference, So there seems to be a large element of wayang here.

Also when Temasek owns such a large percentage of the Singapore market where it is often the controlling or largest shareholder in many of the largest companies, is there a need for MAS to start its own investment fund, albeit puny in relation to the value of Temasek’s stakes? Temasek already invests through a number of Singapore fund managers as well. There must be concern over who gets the money and potential conflicts of interest. Just as the children of PAP Ministers or ex Ministers, including Li Hongyi and Tharman’s son, are already either in senior or fast track roles at Government Ministries and Agencies, some or most of the MAS money could end up being allocated on the basis of family connections or closeness to the PAP.

I was also concerned that the report said that one of the functions of the fund would be to provide liquidity. That could mean providing an exit for politically connected shareholders from illiquid and failing companies at the expense of Singaporeans who end up being the owners of stakes in companies that can never be sold. Will the amount invested by MAS stay at a maximum of $5 billion or will it be increased yearly? Will there be any transparency? Given the complete lack of transparency in the Budget over the Government’s allocations of much larger amounts of money the precedents are not encouraging.

Do we really need another sovereign wealth fund, however nascent, alongside Temasek and GIC? Meanwhile Singaporeans should take note that while $5 billion is not a large sum in the context of total Budget expenditure of $124 billion in 2025, it’s still about 60% more than the Government spent on SG60 and CDC Vouchers in the Budget, which of course are not real money since they can only be spent at a limited number of retailers (the major one is NTUC Fairprice which is a PAP controlled company) and may be devalued as retailers raise prices in response to the captive demand. It’s good for Singaporeans to know that putting their money into propping up share prices and indirectly the wealth and liquidity of the wealthiest Singaporeans and foreign residents in a greater priority for the PAP than supporting ordinary citizens.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam