<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Nov 21, 2008
</TR><!-- headline one : start --><TR>How to invest? <!--10 min-->
</TR><!-- headline one : end --><TR>Pasir Ris-Punggol and Tampines rethink their best options </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Aaron Low
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
</TD><TD vAlign=bottom>
The town council responsible for Pasir Ris is now considering safer investment options after its exposure to products linked to the now-bankrupt Lehman Bank. -- ST PHOTO: CHEW SENG KIM
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->TWO People's Action Party (PAP) town councils are reviewing their investment strategies, just days after it was revealed that they had some funds exposed to toxic products.
Pasir Ris-Punggol and Tampines town councils told The Straits Times yesterday that they are rethinking how best to invest their funds in the light of the global downturn.
Dr Ahmad Magad, MP and chairman of Pasir Ris-Punggol, said that his town council is exploring safer financial options that are 'much more protected, which will also mean lower returns'.
Parliament was told on Monday that the Pasir Ris-Punggol Town Council had invested $4 million, or 2.7 per cent of its total funds, in financial products linked to the now-bankrupt Lehman Brothers investment bank.
It was one of eight town councils which had a total of $16 million exposed to various troubled products. These included Lehman Minibonds and the now worthless Merrill Lynch Jubilee Series 3 LinkEarner Notes.
Dr Ahmad acknowledged that his town council's investment had caused some unhappiness. It thus decided to move to safer options.
In addition, the bleak global economic outlook 'means that we have to think about how best to invest our money', he said.
Likewise, Tampines Town Council chairman Ong Kian Min said he will discuss with his fund managers what needs to be tweaked in their investments: 'We will not tell them exactly what to do, as they are the experts. But it is a good time to discuss our strategy now, as we constantly do.'
Tampines Town Council has $22 million parked with three fund managers and had $250,000 invested in Lehman Brothers bonds, which, like the Minibonds, are also in distress.
Other PAP town councils The Straits Times spoke to said that they were comfortable with their current levels of investing as they had taken care to be conservative and prudent. For instance, Tanjong Pagar Town Council, which had $250,000 in Lehman bonds, said that it takes a cautious approach.
The fund managers told the council that they invested in the Lehman product because it was rated very safe earlier this year, said the council spokesman. About 22 per cent of its funds are parked with fund managers. These generated $16 million from 2004 to last year, she added.
A check with the opposition wards showed that Potong Pasir put funds only in Singapore bonds and cash deposits, and did not employ a fund manager.
Its latest financial statement showed that it held $2.5 million in bonds last year, now valued at $2.61 million - a return of about 4 per cent.
Hougang placed 40 per cent of its sinking fund with a fund manager. This generated 6 per cent a year in the last three years, said Hougang MP Low Thia Khiang earlier this month.
He did not respond to queries from this newspaper yesterday on how this was achieved.
That town council investments have been paying off over the years is something that should not be brushed off, said Mr Inderjit Singh, chairman of Ang Mo Kio-Yio Chu Kang Town Council.
His town council had $1.5 million exposed to Lehman Brothers bonds through its fund manager, but it has otherwise been generating 3 per cent returns a year for three years.
Mr Inderjit said: 'Just one investment out of 30 lost money. We have made money overall, which is good for the town.' [email protected]
</TR><!-- headline one : start --><TR>How to invest? <!--10 min-->
</TR><!-- headline one : end --><TR>Pasir Ris-Punggol and Tampines rethink their best options </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Aaron Low
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
The town council responsible for Pasir Ris is now considering safer investment options after its exposure to products linked to the now-bankrupt Lehman Bank. -- ST PHOTO: CHEW SENG KIM
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"-->TWO People's Action Party (PAP) town councils are reviewing their investment strategies, just days after it was revealed that they had some funds exposed to toxic products.
Pasir Ris-Punggol and Tampines town councils told The Straits Times yesterday that they are rethinking how best to invest their funds in the light of the global downturn.
Dr Ahmad Magad, MP and chairman of Pasir Ris-Punggol, said that his town council is exploring safer financial options that are 'much more protected, which will also mean lower returns'.
Parliament was told on Monday that the Pasir Ris-Punggol Town Council had invested $4 million, or 2.7 per cent of its total funds, in financial products linked to the now-bankrupt Lehman Brothers investment bank.
It was one of eight town councils which had a total of $16 million exposed to various troubled products. These included Lehman Minibonds and the now worthless Merrill Lynch Jubilee Series 3 LinkEarner Notes.
Dr Ahmad acknowledged that his town council's investment had caused some unhappiness. It thus decided to move to safer options.
In addition, the bleak global economic outlook 'means that we have to think about how best to invest our money', he said.
Likewise, Tampines Town Council chairman Ong Kian Min said he will discuss with his fund managers what needs to be tweaked in their investments: 'We will not tell them exactly what to do, as they are the experts. But it is a good time to discuss our strategy now, as we constantly do.'
Tampines Town Council has $22 million parked with three fund managers and had $250,000 invested in Lehman Brothers bonds, which, like the Minibonds, are also in distress.
Other PAP town councils The Straits Times spoke to said that they were comfortable with their current levels of investing as they had taken care to be conservative and prudent. For instance, Tanjong Pagar Town Council, which had $250,000 in Lehman bonds, said that it takes a cautious approach.
The fund managers told the council that they invested in the Lehman product because it was rated very safe earlier this year, said the council spokesman. About 22 per cent of its funds are parked with fund managers. These generated $16 million from 2004 to last year, she added.
A check with the opposition wards showed that Potong Pasir put funds only in Singapore bonds and cash deposits, and did not employ a fund manager.
Its latest financial statement showed that it held $2.5 million in bonds last year, now valued at $2.61 million - a return of about 4 per cent.
Hougang placed 40 per cent of its sinking fund with a fund manager. This generated 6 per cent a year in the last three years, said Hougang MP Low Thia Khiang earlier this month.
He did not respond to queries from this newspaper yesterday on how this was achieved.
That town council investments have been paying off over the years is something that should not be brushed off, said Mr Inderjit Singh, chairman of Ang Mo Kio-Yio Chu Kang Town Council.
His town council had $1.5 million exposed to Lehman Brothers bonds through its fund manager, but it has otherwise been generating 3 per cent returns a year for three years.
Mr Inderjit said: 'Just one investment out of 30 lost money. We have made money overall, which is good for the town.' [email protected]
