Wednesday, July 17, 2019

Restoring forests could help put a brake on global warming, study finds


13 July, 2019


ZURICH — What if we stopped cutting down forests to produce palm oil and cattle? What if we grew new forests on vacant city lots, old industrial buildings — even golf courses?

For the first time, scientists have sought to quantify this thought experiment. How many trees could be planted on every available parcel of land on Earth, where they could go, and what impact could that have on our survival?

They concluded that the planet could support nearly 2.5 billion additional acres of forest without shrinking our cities and farms, and that those additional trees, when they mature, could store a whole lot of the extra carbon — 200 gigatons of carbon, to be precise — generated by industrial activity over the last 150 years.

Time is running out. Singapore sets up Climate Science Unit. And improves drains.

[Three news articles about Climate Change and what it means for Singapore.]

‘Time is running out’: Tackling climate change a priority for Singapore, says Masagos



By Matthew Mohan

17 Jul 2019 01:00PM

SINGAPORE: Facing the “loud and unmistakable” warning of climate change, Singapore needs to act, said Minister for the Environment and Water Resources Masagos Zulkifli on Wednesday (Jul 17).

Speaking at the 2019 Partners for the Environment forum, Mr Masagos stressed that tackling climate change is a “pressing priority” and an “existential challenge” for Singapore.


Saturday, July 13, 2019

Report proposes MOE and MOM be merged to tackle skills gap among Singapore's workforce

By Janice Lim

12 July, 2019

SINGAPORE — A report by a think-tank has proposed that the Ministry of Manpower and the Ministry of Education be combined to ensure that Singaporean workers have the skills the economy needs.

This is because work and study are phases that are increasingly converging, with education no longer a linear process but a continuous cyclical process that follows industry cycles, Institute of Policy Studies' research fellow Faizal Yahya wrote in the report.

A single ministry that oversees the supply and demand for labour would mean, therefore, that there is better coordination and timely government intervention.

“The links between industry and institutes of higher learning should be strengthened further,” Dr Faizal said in the report, which aimed to examine strategies to reskill the workforce as Singapore undergoes an economic transformation.

Hikikomori in Singapore: Recluses hidden from view and at a loss

Illustration: Raymond Limantara

By Faris Mokhtar

In Singapore, private psychologists and psychiatrists say they see up to five cases a year of hikikomori, although there are no official statistics.

12 July, 2019


SINGAPORE — She was 27 and suffering from depression in 2015. Instead of seeking help, Jane (not her real name) decided to shut herself off from the outside world, spending most of her time alone at home.

For more than two years she lived like a hermit. On some days, she would listen to music, watch videos, play the guitar or read. But there were days when her mind slipped into an abyss.

“I couldn’t do anything other than compulsively overthink and self-harm,” she said, declining to elaborate.

Thursday, July 11, 2019

Singapore, KL among major cities to face 'unprecedented' climate shifts by 2050

11 Jul 2019


KUALA LUMPUR: Singapore and Kuala Lumpur are among cities that will face “unprecedented” climate shifts by 2050, researchers warned on Wednesday (Jul 10).

Such shifts could include changes in rainfall patterns, leading to more severe flooding and droughts, according to climate scientists from Crowther Lab, a research group based at ETH Zurich, a science and technology university.

[Well, we can forget about extending the water agreement then.]
The scientists had analysed 520 cities across the world, including all capitals and most urban centres with a population of more than 1 million.

Tuesday, July 9, 2019

GIC, Temasek reports lower returns, cautiously optimistic

GIC’s returns hold steady at 3.4%, maintains cautious investment stance amid uncertainties

GIC says future returns could be “low and volatile”given the uncertainties in the global environment ahead.


By Tang See Kit


SINGAPORE: Singapore sovereign wealth fund GIC saw steady returns for its last financial year, but reiterated a cautious stance amid an uncertain investment climate marked by challenges including a protracted trade row.

For the year that ended Mar 31 this year, GIC’s key metric of investment performance, the 20-year annualised real rate of return, came in at 3.4 per cent, according to the latest annual report released on Wednesday (Jul 3).

This was unchanged from the return rate in FY2017/18, but lower compared to the years prior. That number was 3.7 per cent for FY2016/17, 4 per cent for FY2015/16 and 4.9 per cent for FY2014/15.

When asked whether a return rate below four per cent is becoming the new normal or a drop below three per cent could happen in the years ahead, CEO Lim Chow Kiat said he “can’t really predict exactly what percentages”, but is cautious about investment prospects amid high valuations and a range of uncertainties that might “be around for quite a while”.

Another factor contributing to the decline in GIC’s benchmark return rate is the way it is calculated.

The 20-year annualised rate of return is a “rolling” return, where years are dropped and added as the computation window moves. For instance, the figure for FY2018/19 represented the average return of GIC’s portfolio between April 2000 and March 2019. Next year’s will measure the average return from 2001 to 2020.

Explaining why the return rate fell below four per cent for the last three years, GIC said that can be attributed to the “exceptionally high returns” from the tech-bubble period of the late 1990s being dropped out of the 20-year window, while the post-bubble declines remained.

This one-off effect is set to persist and weigh on the 20-year return figure over the medium term, said Mr Lim at a media briefing held a day earlier.

In US dollar nominal terms, GIC’s portfolio returns were 5.5 per cent per annum over the last 20 years, slightly above the 5.2 per cent annualised return from its reference portfolio. The latter, made up of 65 per cent global equities and 35 per cent global bonds, refers to the risk that GIC can take to generate good long-term investment returns.

As at the end of the last financial year, developed market equities accounted for 19 per cent of GIC’s portfolio, down from 23 per cent a year ago.

This corresponded with a two-percentage-point increase in the allocation to nominal bonds and cash to 39 per cent - the highest level since GIC began issuing annual reports in 2008.

It also slightly increased its allocation to emerging market equities from 17 per cent to 18 per cent, as well as private equity from 11 per cent to 12 per cent.

Inflation-linked bonds and real estate form the other asset classes in GIC’s portfolio - both of which remained unchanged in terms of their compositions.

Lowering its exposure to developed market equities and in turn increasing its hold in nominal bonds and cash, is reflective of how GIC has turned “a bit more defensive”, explained Mr Lim.

CHALLENGES AHEAD

This cautious stance comes as the investment climate ahead is likely to be one marked by challenges pointing to low and volatile returns, noted GIC which acts as the fund manager of Singapore Government assets.

Apart from high asset valuations and slowing global growth, heightened political and policy uncertainties remain amid an ongoing trade conflict between the United States and China, continuing fragmentation in Europe and the long-drawn Brexit process.

“We see a future (with) quite a number of outcomes that are skewed to the downside,” said Mr Lim. These include a disorderly unwind of high debt, “constrained” space for policymakers to counter downturns and a possible de-globalisation given the protracted trade tensions, he added.

On the lingering trade conflict between the world’s two biggest economies, Mr Lim noted that there is already some impact on trade and investments given the uncertainty of a resolution.

While there is a possibility of a compromise in some areas on the back of a restart in US-China trade talks, there is also the real risk of a breakdown in trust that can result in a less-cooperative relationship and a “very long-lasting negative impact”.

“We are concerned … that if it’s a prolonged period of trade tensions, you can lose a lot of the benefits of globalisation – whether it’s supply chains or free movement of capital and investments,” said Mr Lim.

As a global investor, GIC would “still very much prefer a globalised world where we continue to benefit from productivity gains, innovation and knowledge sharing”, he added.

STILL SEEKING OPPORTUNITIES

Regardless, GIC said it continues to look out for opportunities and stands ready to take advantage of potential market dislocations.

This could include domestic measures that countries like China might implement in the medium term to counter the effects of the trade row, and how there has been a renewed push in free trade, via bilateral or regional initiatives, among some nations, said group chief investment officer Jeffrey Jaensubhakij.

The US-China trade conflict has also resulted in the “pushing and pulling of different industries”, he added.

This means that while some industries could be impacted, there are some that may grow as a result and still see long-term potential.

Mr Jaensubhakij stressed that this remains early days yet, but there are parallels in the deals announced this week.

GIC on Monday announced that it had entered into an 80:20 joint venture with data centre company Equinix to acquire and develop six hyperscale data centres in Europe for more than US$1 billion.

The proliferation of data gathering and processing of data “will not be affected” by the trade tensions, said Mr Jaensubhakij, adding that this is an area with “quite significant growth” in the next five to 10 years.

Same goes for its US$8.4 billion deal to buy US freight railroad owner Genesee & Wyoming (G&W), also announced on Monday.

G&W’s portfolio of 120 short line railroads, largely in North America, can tap the US domestic demand, which is unlikely to see large disruptions as a result of the trade war, explained Mr Jaensubhakij.

Other areas that remain on its radar include the technology sector, as well as the Asian region where it continues to take a “constructive view” in the long term on the back of high growth potential and attractive investment opportunities.
READ: ‘We have to be positioned for change’: GIC bets on deeper investments in tech

Asked if this means that GIC could invest more in the region, Mr Lim said: “If Asia continues to grow strongly as it has in the last 30 to 40 years, I think the chances of Asia taking up more of our exposure are good.”

Currently, GIC holds 12 per cent of its portfolio in Japan and 20 per cent in Asia excluding Japan. The rest of its portfolio is distributed among markets such as the United States (32 per cent), United Kingdom (6 per cent), Eurozone (12 per cent), Latin America (3 per cent), Middle East, Africa and the rest of Europe (7 per cent), as well as rest of the world (8 per cent).

Overall, the Singapore sovereign wealth fund said its diversified portfolio, disciplined investment approach and flexible capabilities will help it withstand the challenging investment environment.

It will continue to invest prudently, said Mr Lim in response to a question about the Monetary Authority of Singapore’s recent announcement of a S$45 billion transfer from the official foreign reserves (OFR) to GIC.
READ: MAS to disclose more information on monetary policy operations

“It’s more responsibility with more capital that we have to deploy for higher returns,” he told reporters.

Source: CNA


[GIC invests SG Govt's funds including the funds from Spl Singapore Govt Securities (SSGS) which is bought by CPFB. With the returns on GIC investment falling, the Govt's guarantee of 4% and 2.5% returns on the CPF/SSGS will be strained/unsustainable.

Either 

1) the CPF interests rates may have to be allowed to fall to LESS than the 4%/2.5%, or 
2) the NIRC available for the Govt's budget will be affected significantly if the govt bites the bullet, continues to provide 4%/2.5% for CPF/SSGS returns.

Moreover the 3.4% returns reported is the annualised 20 year rolling return. So the high returns of the early 2000 is buoying the rate. Which means current rates may be a lot lower.]


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‘Good’ chance of increased Asia investments as GIC takes constructive view on region’s long-term future

GIC says there are attractive opportunities in Asia’s consumption-based goods and services sectors, such as financial services, healthcare, education and technology.


By Tang See Kit


SINGAPORE: High economic growth potential and the availability of “attractive” investment opportunities are the reasons why GIC continues to take a constructive view on Asia in the long run.

“Asia presents attractive opportunities that can be found across consumption-based goods and services sectors, including financial services, healthcare, education and technology,” Singapore’s sovereign wealth fund said in its annual report released on Wednesday (Jul 3).

“Its global value proposition will increase further, fuelled by the continued rise of its middle class, infrastructure investments, and regional integration, backed by steady technological progress.”

While there are challenges, such as uneven structural reforms and uncertainties resulting from a protracted trade spat between the United States and China, GIC said it is “confident” that these can be addressed.

As long as Asia continues to chalk up strong growth, which translates into good investment opportunities, GIC could invest more into the region, said CEO Lim Chow Kiat.

“If Asia continues to grow strongly as it has in the last 30 to 40 years, I think the chances of Asia taking up more of our exposure are good.”

Currently, GIC holds 12 per cent of its portfolio in Japan and 20 per cent in Asia excluding Japan. The rest of its portfolio is distributed among markets such as the United States (32 per cent), United Kingdom (6 per cent), Eurozone (12 per cent), Latin America (3 per cent), Middle East, Africa and the rest of Europe (7 per cent), as well as rest of the world (8 per cent).

Mr Lim was speaking to reporters at a briefing ahead of the release of GIC’s investment report for FY2018/19. The annual report card showed GIC logging a steady return rate for the last financial year, but reiterating a cautious stance amid uncertainties including a lingering trade row.

The annual report also included a feature article on the growth drivers and challenges of Asia - a region where it said it was an “early and significant investor” since the 1980s.

“GIC has been committed to Asia’s growth story for several decades. We continue to take a constructive view on Asia’s long-term future,” it wrote.

Over the years, Asia’s share of the global economy has more than doubled over the past 40 years and its financial markets have developed significantly.

While the region is made up of economies at varying stages of development, GIC noted three growth drivers that will likely persist.

These include the region’s attitude to globalisation and openness which has allowed countries to benefit from technological catch-ups; progressive reforms in its institutions; and the adaptability of its people, improvements in educational levels and a “demographic dividend” in some Asian countries.

To be sure, challenges remain in the form of uneven structural reforms, disruption from new technologies for businesses and jobs, as well as existing labour, natural resource and environmental constraints.

The region is also vulnerable to geopolitical tensions, including North Korea and territorial challenges in the South China Sea. “These are tail-risks that could disrupt Asia’s growth story and security situation,” said GIC in its report.

One manifestation of these tensions is the growing trade and business restrictions between the US and China, it added.

While some economies may benefit from trade diversion and the reconfiguration of supply chains, such tensions are harmful to Asia overall due to its high trade dependency and regional supply chain integration.

“If the US and China impose 25 per cent tariffs on all traded goods, the peak GDP (gross domestic product) loss in the near term will be sizeable for Asia as a whole, aggravated by negative sentiments and tighter financial conditions,” it wrote.

Already, the tensions are causing a slowdown in regional trade, GIC noted.

When asked how the trade row could further impact Asian economies, particularly China, Mr Lim said China will likely still be able to grow and develop its industries and economy. However, prolonged trade tensions that could lead to a loss of globalisation’s benefits is “certainly not ideal”.

As a global investor, GIC would “still very much prefer a globalised world where we continue to benefit from productivity gains, innovation and knowledge sharing”, Mr Lim added.

Beyond trade, the country’s sovereign wealth fund is also viewing the situation in Hong Kong “with some concern”.

“Hong Kong is a very important financial and business centre so it’ll be really good if they can find a way forward. That will be good for everybody,” said the GIC chief.

However, Mr Lim added that the political uncertainties - marked by massive protests over the past few weeks against a now-suspended controversial extradition Bill – do not affect how it views the prospects of Greater China.

Source: CNA



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[So GIC's returns which would have an impact on CPF interest rates is already low. If Temasek returns is still high, it could make up for GIC's lower returns. And still provide Net Investment Returns Contributions to the Budget. But Temasek Holdings is also not doing as well as it used to...]


Temasek’s portfolio value at new record high, but growth rate and investment returns slow

By NG JUN SEN

09 July, 2019


SINGAPORE — Singapore investment company Temasek Holdings’ portfolio value has kept growing to a record high, though total shareholder returns have declined sharply in the last financial year, its latest annual review showed.

The Singapore Government is the sole shareholder of Temasek Holdings, and the returns constitute the largest revenue component of Singapore’s annual Budget, in a category officially known as “Net Investment Returns Contribution”.

In the annual review, which was published on Tuesday (July 9), Temasek also underscored the importance of investing sustainably — describing climate change as “the most urgent challenge confronting humanity”.

In the financial year ending on March 2019, Temasek’s net portfolio value grew for the third straight year to S$313 billion, up by about 1.6 per cent from S$308 billion in 2018. However, the pace of growth was still markedly slower than the 12 per cent increase from 2017 to 2018.

The result comes amid a gloomy economic outlook and rising global uncertainties, fuelled by trade tensions between America and China, a possible hard Brexit hurting European economies, and rising risks of a technology war that could affect Temasek’s technology investments.

In a media statement, Temasek said it had “moderated its investment pace” since July last year as it “anticipated an increasingly challenging environment”.

Total shareholder return (TSR) came in at 1.49 per cent in Singapore dollar terms over the year in review, a sharp fall from the 12.2 per cent posted in the previous year. TSR measures the performance of the fund’s holdings by adding capital gains as well as dividends.

At a question and answer session on Tuesday, Temasek executives stressed that TSR was high when viewed over the longer term. Over a decade, TSR was 9 per cent. Since the inception of Temasek Holdings 45 years ago, the firm has recorded a compounded annualised return of 15 per cent.

Mr Dilhan Pillay Sandrasegara, chief executive officer of Temasek International, said that the shareholder — the Singapore Government — looks for long-term sustainable returns. This means there could be some years that overperform, and other years that underperform, he said.

Temasek International is the wholly owned management and investment arm of parent company Temasek Holdings.

Mr Sandrasegara said: “What we have been doing systematically over the last 10 years or so is to shift the portfolio in a way that resilience comes across… It is very important that we focus on that sort of strategy going forward, and that is really what our shareholder expects us to do.”

Temasek’s dividend income in the past financial year was at S$9 billion.

[Trying to reconcile $9b dividend income with $313 billion in portfolio over $308 billion, which is a $5b growth...]

As risks have increased, divestments outpaced investments in the past year as the firm is taking “a more cautious approach”, said Ms Png Chin Yee, senior managing director of portfolio strategy and risk group. In the 2019 financial year, Temasek divested itself of S$28 billion and invested S$24 billion.

[And then there is this, which is a net decrease of $4 billion in portfolio... ]
Ms Png said: “While the increasingly challenging global environment may dampen business confidence and investment, we expect policymakers to be primed for dovish policies that could cushion any substantive pressure on growth.”

If the low interest rate environment persists, this could lower expectations for returns in the longer term, she added.

Temasek International president and chief operating officer Chia Song Hwee said Temasek had deliberately tempered its investment pace over concerns of economic headwinds.

Mr Chia said: “In general, we manage our portfolio and liquidity for resilience, especially in anticipation of a more challenging outlook.”

SUSTAINABLE INVESTMENTS

Meanwhile, Temasek International will continue its journey of investing sustainably, as envisioned by former chairman Ho Ching, said Mr Sandrasegara. Ms Ho stepped down as Temasek International chairman in April. Ms Ho, the wife of Prime Minister Lee Hsien Loong continues as Temasek Holdings’ chief executive officer.

Temasek Holdings chairman Mr Lim Boon Heng said: “We are committed to do well, do right and do good, as an investor, institution and steward.”

He added: “Climate change is the most urgent challenge confronting humanity today. Let’s look at what’s happening around us, and think what it means for people, lives and livelihoods.”

This year's annual review featured heavily Temasek's recent investments that promote this thinking, such as Impossible Foods, a company that has developed plant-based substitutes for meat. This comes after Temasek set out its environmental, social and governance framework for the first time last month.

Among its divestments in the past year, Temasek had dropped Cargill Tropical Palm, a palm oil company, and Klabin, which is the largest paper producer, exporter and recycler in Brazil.

Mr John Vaske, Temasek head of Americas, said the framework set out how environmental, social and governance considerations weigh on Temasek’s investment decisions.

“This is very much aligned to our purpose of creating sustainable value over the long term,” he said.



Monday, July 8, 2019

10 medical myths we should stop believing. Doctors, too.


OREGON — You might assume that standard medical advice was supported by mounds of scientific research. But researchers recently discovered that nearly 400 routine practices were flatly contradicted by studies published in leading journals.

Of more than 3,000 studies published from 2003 through 2017 in JAMA and the Lancet, and from 2011 through 2017 in the New England Journal of Medicine, more than 1 in 10 amounted to a “medical reversal”: a conclusion opposite of what had been conventional wisdom among doctors.

“You come away with a sense of humility,” said Dr Vinay Prasad of Oregon Health and Science University, who conceived of the study. “Very smart and well-intentioned people came to practice these things for many, many years. But they were wrong.”

Some of those ideas have been firmly dislodged, but not all. Now Dr Prasad and his colleagues are trying to learn how widespread are discredited practices and ideas.

Here are 10 findings that contradict what were once widely held theories.