MAS loses money, SIA losing share

It's that time of the year again. Nope I don't mean Christmas.
National Day is approaching and our PAP ministers have taken out the huge banners of themselves and pasted them all over the country.
This is probably one of the two occasions where our million dollar MPs are generally seen. The other is General Elections.
I say this because the Monetary Authority of Singapore (MAS), currently helmed by Tharman Shanmugaratnam, PAP MP for Jurong GRC, made a record S$10 billion loss in FY ended March 2011 and blamed it on external factors.

Quoting Ravi Menon, Managing Director of MAS, "The translation loss is not a factor. It is just a reporting phenomenon where you report in Singdollar, the strength of the Singdollar diminishes the value of the reserves. Like I said, if we had reported our results in foreign currency or US dollar, this is not an issue."

Firstly, any commercial or government entity anywhere in the world reports in local currency.
Secondly, any of such organisations invested in foreign assets is susceptible to foreign currency movements.
Thirdly, most Asian currencies have steadily appreciated against the US dollar since the 2008 global financial crisis. And the current wrangling in Congress over the debt ceiling is reinforcing the weak sentiment for the dollar.

To pin the blame of the huge loss on currency strength is nothing short of lame. Hedging Mr. Menon?
Also, currency translation DOES affect the bottomline. It is not just a reporting phenomenon because it translates into real profits or losses.

In any case, Hong Kong Monetary Authority netted HKD 79.4 billion in profits in the same FY.

This incident brings to mind MAS' inept handling of the minibond crisis. MAS basically told investors to seek their own redress despite the fact that they are tasked to regulate all elements of monetary, banking and financial aspects of Singapore.
Hong Kong's Chief Executive Donald Tsang in contrast, vowed to bring the people responsible for saga to justice.
His government's resolve, coupled with the strong consumer movement, forced DBS to return Hong Kong investors most of their money. Singaporean investors on the other hand, were told to f**k off, despite the fact that DBS is a Singapore bank!

Well actually Singapore bank in name. DBS has been run by a string of come and go foreigners like John Olds, Phillipe Paillart and Jackon Tai. Even Piyush Gupta, the latest head honcho, is an Indian.
Retired politician Lee Kuan Yew reiterated his penchant for foreigners by saying they are "vital" to Singapore.
I'll accept if he said they were important. But "vital"? What is he on?

I suppose local universities like NUS and NTU have been screwing up so badly that no Singaporean is qualified to head the country's own financial institution.

Malaysian CEO and founder of Air Asia, one of the world's fastest growing airlines questioned Singapore Airline's faith in locals when they keep hiring "foreign talents" to lead the business. Air Asia's commercial head is Singaporean!
Incidentally, Air Asia made record profits of US$500 million in 2010, fast catching up with SIA's US$800 million. That's why they are rushing to set up a low cost-long haul carrier to compete with the former.

The points I'm trying to make in this entry are:

1) Singaporeans are a clever bunch. Ministers and GLCs can no longer hogwash their way into explaining poor performance.

2) Because 1) is true, Singaporeans can and should lead their own national companies. Furthermore, there is no empirical evidence to suggest that foreigners have raised the standard of business in the country.

In any case, let's take off with Asia's first and leading low cost long haul airline.