What is the difference between gic and temasek

Temasek promotes sound corporate governance in its portfolio companies by supporting high calibre, experienced and diverse boards to complement management leadership. By leveraging its wide network of contacts, Temasek can suggest qualified individuals for consideration by the respective boards.

Temasek employees on boards would be appointed in their personal capacity, and are expected to meet their fiduciary responsibilities as directors of companies. Temasek investments are financed using dividends and other cash distributions it receives from its portfolio companies and other investments, divestment proceeds from sale of its investments, and borrowings and debt financing sources such as the Temasek Bonds and Euro-commercial Paper Programme. Temasek is an active investor and rebalances its portfolio from time to time.

We support philanthropic programmes that focus on building people, building communities, building capabilities and rebuilding lives. Temasek has established 19 endowments since its inception, for community, philanthropic and public good causes, as part of our support for the wider communities in Singapore, Asia and beyond.

Since , we have been setting aside part of our net returns above our risk-adjusted cost of capital for community contributions. In , we regrouped our then 17 endowments under a structure of six Temasek Foundation, which are guided by their respective strategic thrusts and mandates to drive their community programmes. In , we added the Stewardship Asia Centre Endowment to reinforce our commitment to promote sound stewardship and good governance across Asia. Stewardship Asia Centre is currently the beneficiary of this new endowment.

To date, our Foundations have touched over 1. The NIR framework provides rules for determining how much the Government can spend on its Budget, based on the expected long term real rate of returns of the investment entities in the framework. The NIR framework does not determine the amount of dividends that Temasek distributes to our shareholder. The Government has a variety of sources of liquidity and cash flows that enable the Government to manage its liquidity needs independent of the strategies of Temasek, MAS and GIC.

Temasek will continue to declare dividends annually based on the profit we earn, in accordance with our Board-approved dividend policy. The dividend policy balances the sustainable distribution of profits as dividends to our shareholder, with the retention of profits for re-investment and future returns.

Investment and divestment decisions will continue to be based on our intrinsic value tests. The Singapore Government is not involved in the investment, divestment or other business decisions of Temasek. Our Board sets our dividend policy, balancing the sustainable distribution of profits as dividends to our shareholder with the retention of profits for reinvestment to generate future returns.

Our shareholder has injected capital into Temasek from time-to-time as part of its asset allocation decision. The Credit Quality section of our Temasek Review and Business of Temasek section of our Medium Term Note programme Offering Circulars include key credit parameters based on the financials of Temasek as an investment company 1.

As a policy, Temasek does not issue any financial guarantees for the obligations of our portfolio companies. The information on this Frequently Asked Questions page is provided strictly for information only, and is not and does not constitute or form part of, and is not made in connection with, any offer, invitation or recommendation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of any entity.

If you have further questions, please consult your own financial, investment, business, legal, tax or other professional advisers prior to investing. We issue Temasek Bonds as public markers of our credit quality.

They increase our funding flexibility and expand our stakeholder base. The proceeds were used to fund the ordinary course of business of Temasek and our investment holding companies. The new programme adds to our funding flexibility and gives us the optionality to invite Singapore retail investors to participate in future bond offerings.

This public bond offer broadened our stakeholder base and provided Singapore retail investors an opportunity to invest in a Temasek Bond for the first time. Temasek remains open and flexible to various financing options, including issuing subsequent bonds that are available to retail investors in the future, depending on objectives and market conditions. Any credit ratings accorded to Temasek or Temasek Bonds are statements of opinion and are not a recommendation to buy, sell or hold the bond, and investors should decide whether the investment is appropriate.

In particular, credit ratings are NOT intended for use by retail investors, and retail investors should NOT consider the credit ratings in making any investment decision. Investors should contact their financial or other professional adviser before making any decisions based on the credit ratings.

All investors should consult their financial, investment, business, legal, tax or other professional advisers prior to investing. Temasek has a conservative gearing stance. Our Board sets our overall debt limit, taking into account our shareholder funds, cash flow and credit profile. No, Temasek Bonds are not guaranteed by the Singapore Government. The Singapore Government also does not guarantee any other debt obligations of Temasek. Temasek Holdings Private Limited is the Guarantor, which fully guarantees all payments of interest due, and the full repayment of the principal amount at maturity whether the bond is purchased during the offer or in the secondary market.

Do note that there is no certainty that the Guarantor will always remain solvent and able to fulfil its obligations under the guarantee. Temasek does not guarantee the market price or market liquidity of Temasek Bonds during its tenor, which will be subject to many factors. The information on this Frequently Asked Questions page and the Offering Circular and pricing supplement s referred to below are provided strictly for information only, and should be read as of their respective dates, unless otherwise specified or determined by the context.

The information below is not and does not constitute or form part of, and is not made in connection with, any offer, invitation or recommendation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities of any entity.

A plain vanilla bond is typically for a fixed period, called the tenor, and for a fixed interest rate, called the coupon. An issuer of a plain vanilla bond is basically promising you two things, in return for the money that you are lending to the issuer:. Second, it promises to pay you interest at the stipulated annual, half yearly, or quarterly intervals.

Once the principal amount of a bond is repaid at maturity and the issuer redeems the bond, the bond no longer exists. Depending on the objectives of an issuer and market interest, a bond issuer may issue bonds with more complex terms, such as variable interest rates.

You should also understand all the risks involved. You may find more information in the Programme Offering Circular, and you should also read the pricing supplement for that Temasek Bond. Bondholders should assess various risks when investing in bonds generally and in Temasek Bonds, such as market, business, legal, regulatory, interest rate, default, liquidity and inflation risks.

For more details on the risks, please refer to Investing in Bonds. You may also refer to the Programme Offering Circular for a discussion of certain risks in connection with an investment in Temasek Bonds, and you should also read the pricing supplement for that Temasek Bond before investing.

If a bond is sold before its maturity, it will be sold at its market price, which may rise or fall depending on market conditions at the time, such as supply and demand, general market conditions and other factors. Interest rates and bond prices generally move in opposite directions. When market interest rates rise, prices of fixed-rate bonds tend to fall.

This does not mean interest rates of bonds will change. Hence, if you are unable to hold your bond to maturity, you may suffer a partial loss of your principal amount if you have to sell your bond when prices are down. To date, Temasek has been offering Temasek Bonds to retail, institutional, accredited and other specified investors. Temasek determines the bond interest rate via a book building process, based on the bids in this market-based price discovery exercise.

The interest rate for the Temasek Bonds available to retail investors in Singapore have similarly been determined based on bids from institutional, accredited and other specified investors in a book building process.

The interest rate on a bond is a function of, among other things, the risk that an investor takes when investing in a bond. For a bond deemed to be of higher risk usually because of the perceived or actual credit quality of the issuer , the interest rate is expected to be higher. The interest rate also depends on other factors such as the tenor and market conditions at the time of the bond issuance.

The interest rate for the Temasek Bonds have been determined based on bids from institutional, accredited and other specified investors in a book building process for market price discovery. If Temasek defaults on interest payments, the trustee of the Temasek Bond s may give notice to the Issuer that the principal amount of the Temasek Bond s shall become immediately due and payable together with accrued interest if any in accordance with the terms and conditions of the Temasek Bond s.

You should understand the dynamics, risks and opportunities associated before investing in any product, including Temasek Bonds. More information can be found on the CDP website. Interest payments, capital gains if applicable or the principal amount of the respective Temasek Bond will be credited to your CPF Investment Account.

Interest derived by individuals tax resident in Singapore from Temasek Bond s is exempt from tax, except where such income is derived through a partnership in Singapore or is derived from the carrying on of a trade, business or profession in Singapore.

As we cannot advise you regarding your personal tax matters, you should not rely on this response as being tax advice and should consult your own tax advisers as to the Singapore or other tax consequences of the acquisition, ownership, or disposition of Temasek Bond s , in particular the effect of any foreign, state, or local tax laws to which you may be subject.

In addition, please refer to the selling and transfer restrictions set out in the Programme Offering Circular and the applicable pricing supplement for restrictions applicable to other jurisdictions.

If you intend to buy or sell Temasek Bond s in the secondary market before the maturity date, you will need to have a trading account with a securities broker that is linked to your individual CDP account.

Dealings in Temasek Bond s will be carried out in Singapore Dollars, and will in each case be effected for settlement through the CDP on a scripless basis. The market price of the Temasek Bond s may be above or below its issue price, depending on market conditions at the time, such as supply and demand, general market conditions and other factors.

If you trade Temasek Bond s in the over-the-counter market, accrued interest will be payable on the Temasek Bond. Please be aware that there will be fees associated with investments made through your CPF Investment Account.

You can use your joint CDP securities account, provided it is linked to a trading account, to buy Temasek Bond s in the secondary market. You should consult your stockbroker and the relevant bank which you hold your joint CDP account with if you wish to purchase Temasek Bond s from the secondary market. You do not need to take any action. Your principal amount and last interest payment will be automatically credited to your account as a single amount. The information below is focused on investments in bonds.

There are other factors which apply to investments in shares. Corporate actions undertaken by a company can include a range of events, such as new issuances of shares or bonds, redemption of outstanding bonds, a buyback of shares or bonds or an acquisition or disposal of assets. If the company undertakes a corporate action, the market price of its shares or bond may be impacted. Generally, listed companies are under an obligation to announce information to the market that would be likely to materially impact the price or value of its securities, among other things.

Separately, companies with bonds listed on the SGX-ST are subject to the obligation to disclose information which may have a material effect on the price or value of its bonds, among other things. Different exchanges will have different rules that apply to companies whose securities are listed on their exchanges. When a company with listed securities undertakes a corporate action, it may have to make an announcement in accordance with the continuing disclosure obligations to which it is subject, in particular if the corporate action will materially impact the price or value of its securities.

A corporate action may have an impact on investors because it can affect the market price of bonds. However, it is important that you consider these announcements as one data point, and that you make an effort to reach your own informed views about whether to buy, sell or hold securities, taking into account relevant information and your own personal circumstances, including risk tolerance. Announcements made by the company do not constitute financial or investment advice.

You should consult your own financial, investment, business, legal, tax or other professional advisers prior to investing. Please submit your details via the career portal under the respective application links. For further queries, please contact us at career temasek.

We will notify you if your qualifications and experience are relevant to the requirements of a currently available position. If you are selected to proceed in the process, you will be contacted directly by the Human Resources team. The following is an edited transcript of questions and answers at the Temasek Review Media Conference. Grammatical edits have been made to aid readability. For the same reason, questions are not necessarily listed in the order in which they were asked, but grouped thematically.

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Sara Velezmoro. Share gift link below with your friends and family. Link Copied! Copy gift link. Sign up or log in to read this article in full. Sign up. Already have an account? Get our latest insights in your inbox with ThinkSpace. Virgin Islands U. Sign me up for the newsletter!

Thank you for subscribing. Please check your inbox for a confirmation email. Sorry, it seems like something went wrong. FAQs Close. What does GIC see as long-term risks? What is the relationship between GIC and the Government? Positive real returns While nominal returns enable comparisons with other institutional investors, it is real returns that provide purchasing power.

Over 20 years up to 31 March , GIC achieved an annualised real rate of return of 2. Significant and steady Net Investment Returns NIR Significant contributions from NIR show that investment returns more than exceed the costs of Government-issued bonds and other liabilities, and provide a worthwhile supplement to the budget. CPF monies are therefore invested entirely in risk-free assets.

This arrangement assures that the CPF Board will be able to pay its members all their monies when due, and the interest that it commits to pay on CPF accounts. Ultimately, the investment returns that the Government expects to make over the long term by taking the risks of long-term investments are not hoarded away in the reserves.

The long-term returns therefore help to fund spending which benefits Singaporeans. How does GIC measure its performance? What are the returns of the GIC Portfolio? Why are returns expressed in real terms? What is the performance of the various asset classes?

How is GIC positioning itself for the future? Do the five and year results impact the long-term sustainability of GIC? What is GIC doing to mitigate risk? Our approach to risk management is multi-pronged: Managing portfolio investment risk to ensure that risk taken is consistent with our mandate and commensurate with the expected returns; Managing legal, regulatory and compliance risks to safeguard the reputation and interests of GIC and our Client, and to comply with applicable laws and regulations; Managing tax risk to ensure compliance with the tax laws of applicable jurisdictions; Managing operational risk through an effective system of internal controls and processes to support GIC operations; Managing counterparty credit risks to minimise the impact to GIC if any counterparties were to default; Managing reputational risk; and Managing people risk.

Our investment framework capitalises on our core strengths: Our ability to take a long-term investment perspective Our global presence Our capabilities in cross-asset investments Our skilled and experienced teams A governance structure that distinguishes clearly the respective responsibilities of our Board and Management The framework is made up of: 1. A Policy Portfolio with six asset classes: Developed market equities Emerging market equities Nominal bonds and cash Inflation-linked bonds Private equity Real estate 3.

How does GIC decide what to invest in, and where? Does GIC have specific allocations to asset classes and geographies? How much of the portfolio is managed externally by other fund managers?