GIC CIO warns of inflation risk ‘coming back sooner’

[k1976]

Jovi Ho​

Fri, 20 September 2024 at 6:23 am SGT3-min read

Returns from past investments “will probably disappoint what we underwrote”, says Jeffrey Jaensubhakij.
The market “should just enjoy” the long-awaited interest rate cut by the US Federal Reserve “for now”, but investors should “be prepared” for the risk of inflation “coming back sooner”, says Jeffrey Jaensubhakij, group chief investment officer at GIC.
“You have tight labour markets across the US, Europe [and] Japan; the risk of inflation coming back sooner may be there,” says Jaensubhakij. “I think because the rates have priced in so much but the economy remains strong, the risk is that rates don’t go down as much.”

 

[k1976]

Valuations down

Institutional investors should prepare to stomach declining valuations, says Jaensubhakij. “As an allocator, we see across a whole range of funds, and the truth is that in 2021 and into half of 2022, the funds put a lot of money to work at very high valuations, some of which will have to come down when you exit.”

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Jaensubhakij estimates that “only a quarter” of funds can introduce operational improvements to investee companies “that will allow their ebitda to outgrow enough the declining valuation”.

Returns from past investments “will probably disappoint what we underwrote”, says Jaensubhakij. “That’s a large part of the portfolio.”

Jaensubhakij adds: “But on new investments [that] we’re doing today, or that the funds are doing today, if they’re patient enough, and [the] price expectations of sellers start to come down, you will be able to get better returns from new investments and then the funds that really do the operating improvements will outshine the others.”

Jaensubhakij says the gap between the winners and the laggards will only widen. “We will see differentiations between managers and between industry companies over the course of the next few years and, of course, we’re always hopeful that we’re in the right funds, in the right co-investments and so on.”

 

[k1976]

Speaking at Milken Institute’s Asia Summit 2024 on Sept 20, Jaensubhakij says the markets are split “in some ways”. “Interest rate markets are sort of saying ‘You need to cut rates enough’, as if we were going to go into [a] recession; but the equity market, on the other hand, [they] are sort of saying ‘No, actually we’re going to accelerate the economy [and] earnings growth is going to come back.’ Only one of [these] themes will be right.”

Fed chair Jerome Powell did signal a “pretty dovish” tone while announcing a 50-basis point rate cut on Sept 18, says Jaensubhakij. “Not only do they want to do that 50[bps], but you know they’re going to do more this year and more next year.”

According to Jaensubhakij, some of its investee companies “do borrow a lot”, so “they’re hoping that rates will come down”.

The US economy “doesn’t need even more fiscal stimulus”, says Jaensubhakij. However, US presidential candidates Kamala Harris and Donald Trump have mentioned such plans in their respective campaigns. “Unfortunately, I think in politics, spending money [and] giving away money is the best ‘vote-getter’,” Jaensubhakij adds.

 

[k1976]

Warren Buffett once said waiting for a market crash to buy stocks is like a mortician waiting for an epidemic — here’s why​

Vishesh Raisinghani
Updated 15 September 20244-min read

Scroll back up to restore default view.
Legendary investor Warren Buffett has often described his investment philosophy as buying great businesses for cheap prices. However, a shareholder at Berkshire Hathaway’s 1996 annual meeting wanted to know which of these factors was more important.
“If you had three great companies, wonderful businesses…is it better to wait a year or two to see if the company stumbles?” the shareholder asked.

 

[ftan42]

the tight labour markets across the US is on paper report only what about the actual ground situation?

 

[k1976]

the tight labour markets across the US is on paper report only what about the actual ground situation?

No risk no gain mah

 

[k1976]

the tight labour markets across the US is on paper report only what about the actual ground situation?

Quality Job Growth is in doubt
Thanks to Demcrats...US not only lost its quality Semicon workforce, its shipyard now need to depend Nippon and Goryeo shipyard for its new capital ships, as US shipyard having issue to build Virgina Sub

 

[k1976]

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Industries
Transportation

US Leans on Shipbuilding Prowess of Allies to Compete With China​

• South Korea’s Hanwha at center of US efforts to rebuild navy
• Japan, South Korea are world’s top shipbuilders outside China

Multi-type offshore equipment and special ships are under construction at CIMC Raffles’ Yantai construction base in China on Sept. 8.Photographer: Costfoto/NurPhoto/Getty Images

By Bloomberg News
September 21, 2024 at 7:00 AM GMT+8
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In any high-stakes military conflict with China, the US Navy will be critical to winning. But America’s shipbuilding industry is far from able to support what the Navy needs.

 

[k1976]

U.S. attack submarines to counter China are up to two years late​

Virginia-class attack submarine USS Hawaii passes by Diamond Head crater on Oahu in Hawaii in July 2009. | U.S. Navy Photo / via REUTERS
By Tony Capaccio
Bloomberg
SHARE
Apr 3, 2024
Delivery of two new U.S. Navy attack submarines to counter China’s growing surface fleet is running as much as two years late, according to service budget documents.
The USS Idaho was given a ceremonial launch on March 16, complete with the breaking of a bottle of waters from Idaho lakes next to its bow. But it’s not actually scheduled for delivery until September 2025, more than two years after a June 2023 goal that was outlined in 2020, according to the documents.


Similarly, the USS New Jersey — which the Navy projected would be delivered in January 2022 and then in September 2023 — is now scheduled for this September, according to Rep. Joe Courtney of Connecticut, one of the House’s top submarine advocates. Construction contracts for both vessels were awarded in April 2014. The USS Hyman G. Rickover was delivered in October, at least nine months late.

 

[k1976]

Reimagining labor to close the expanding US semiconductor talent gap​

August 2, 2024 | Article
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The US semiconductor industry is poised to expand exponentially by 2030. But how can an industry already facing attrition staff its growing operations? With a paradigm shift in its approach to labor.

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Article (14 pages)
As McKinsey has written previously, public and private investments to rapidly expand the United States semiconductor industry will total more than $250 billion by 2032.1 This investment brings with it more than 160,000 new job openings in engineering and technician support alongside additional openings in related construction craft jobs, according to McKinsey analysis. While numerous initiatives aimed at building these critical talent pipelines are planned or under way, the expected talent gaps are considerable, and many are likely to persist, albeit to a lesser extent.

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About the authors​

Bridging the considerable talent gaps expected will require the American semiconductor industry to confront the problem directly and embrace a sea change in its approach to cultivating, sourcing, and retaining talent.

 

[k1976]

TSMC Arizona struggles to overcome vast differences between Taiwanese and US work culture​

Discussion




tomshardware.com

 

[k1976]

Last year, the Semiconductor Industry Association (SIA) estimated that by 2030, there will be a shortage of 67,000 workers in the U.S. semiconductor industry. To avoid or at least minimize this issue, the U.S. government is initiating a program to develop the U.S. semiconductor workforce. This initiative aimed to prevent a labor shortage that could hinder domestic chip production, which is part of the general strategy to bolster the U.S. semiconductor industry with substantial federal funding.


https://www.tomshardware.com/tech-i...r-the-semiconductor-industry-with-new-program


Funding for this initiative comes from the 2022 Chips and Science Act, which earmarked $39 billion for U.S. chip manufacturing grants and $11 billion for semiconductor research and development. This act has prompted companies to commit significant investments that are expected to transform the global semiconductor supply chain and the U.S. semiconductor industry.

 

[Loofydralb]

Valuations down

Institutional investors should prepare to stomach declining valuations, says Jaensubhakij. “As an allocator, we see across a whole range of funds, and the truth is that in 2021 and into half of 2022, the funds put a lot of money to work at very high valuations, some of which will have to come down when you exit.”

ADVERTISEMENT

Jaensubhakij estimates that “only a quarter” of funds can introduce operational improvements to investee companies “that will allow their ebitda to outgrow enough the declining valuation”.

Returns from past investments “will probably disappoint what we underwrote”, says Jaensubhakij. “That’s a large part of the portfolio.”

Jaensubhakij adds: “But on new investments [that] we’re doing today, or that the funds are doing today, if they’re patient enough, and [the] price expectations of sellers start to come down, you will be able to get better returns from new investments and then the funds that really do the operating improvements will outshine the others.”

Jaensubhakij says the gap between the winners and the laggards will only widen. “We will see differentiations between managers and between industry companies over the course of the next few years and, of course, we’re always hopeful that we’re in the right funds, in the right co-investments and so on.”

In essence, what this idiot is saying, is that, he is gambling with your money.

Pure gambling. Didn't even have to put effort into spinning it.

 

[congo9]

Hahaha.
now you know why they needed more money.
So that they can keep gambling.

 

[bobby]

WTF….we got chow AMDK in GIC?

 

[k1976]

WTF….we got chow AMDK in GIC?

Must be inclusive de woh
We welcum all talents

 

[Dr Christopher Cheok C S]

Will Lower Interest Rates Make You Wealthier?​

Essentially, lower interest rates benefit debtors by transferring wealth away from savers into the hands of borrowers, with higher asset prices. Lower interest rates mean that average-income earners will be borrowing more and more money just to get by. Money money is worth less and less, and they owe more and more money to the banks which people struggle to repay. It’s a vicious downward cycle.

 

[nightsafari]

U.S. attack submarines to counter China are up to two years late​

Virginia-class attack submarine USS Hawaii passes by Diamond Head crater on Oahu in Hawaii in July 2009. | U.S. Navy Photo / via REUTERS
By Tony Capaccio
Bloomberg
SHARE
Apr 3, 2024
Delivery of two new U.S. Navy attack submarines to counter China’s growing surface fleet is running as much as two years late, according to service budget documents.
The USS Idaho was given a ceremonial launch on March 16, complete with the breaking of a bottle of waters from Idaho lakes next to its bow. But it’s not actually scheduled for delivery until September 2025, more than two years after a June 2023 goal that was outlined in 2020, according to the documents.


Similarly, the USS New Jersey — which the Navy projected would be delivered in January 2022 and then in September 2023 — is now scheduled for this September, according to Rep. Joe Courtney of Connecticut, one of the House’s top submarine advocates. Construction contracts for both vessels were awarded in April 2014. The USS Hyman G. Rickover was delivered in October, at least nine months late.

Even at this moment, US attack subs are unmatched. Late nvm. Russian subs are noisy and self-detonate. Chinese subs are more tubs than subs.

Like their aircraft carriers, the USN subs have no peer.