Temasek’s numbers

I think like most readers, I rely on the experts to tell me how to read economics stories, especially company reports. I mean how do we decipher the significance of the mass of figures that get thrown at us. It’s likely that companies want to paint a good picture and you know what statistics are like. You can pick those that look good for you or be silly enough to pick out those that show you to be quite bad at, well, picking numbers…So what’s the real picture?

We let the journalists do the thinking for us. If they too are confused, they get other experts to talk. Then code words come in, like “record” profit or loss, share prices “tanked” or “soared”, when a company is beleaguered”, it’s just keeping its head above water. We understand verbs  and adjectives, although we have to take them with a pinch of salt because journalists like their writing spicy. Too sweet and it looks like a publicity piece. Be bitter and it looks like the journalist has something against the subject being discussed.

I read the Temasek story today in ST, Today and BT. I read ST and BT first and wondered if they were talking about the same company. An ST reader of headlines would come away think Temasek is really hot. Temasek portfolio rises to record 198billion. Then comes the ‘but’ – shareholder returns shrink to 1.5 per cent. A BT reader will read that  its full year profit is down 2b at 10.7b. Then comes the ‘but’ – its portfolio grew to 198b, up by 5b.

I suppose as a smaller paper, BT would have to find a different angle. It didn’t even put it on p1 probably anticipating that ST would. Today, which fancies itself as ST’s direct rival, had the same angle as ST.

For economics news though, I depend on BT to give me the fuller, more specific picture.   I know from BT why the profits went down – not due to turbulent times in europe or elsewhere, but at home with companies here performing  worse than before. And which companies. What are we to make of the 198 b portfolio? It’s technically a record, but is a 5b rise a big deal? BT merely mentioned it in its story, adding that Temasek did NOT disclose its net cash position. Am I to infer something from this? Am I also to infer something from BT reporting that Temasek would not disclose the profit or loss on its divestments ?

The other interesting point was how share holder returns went to 1.5 per cent, down from 4.6 per cent. Looks a lot but you have ST reporting Temasek saying that it beats the returns of other key regional index. And you have BT saying it’s well below the  annualised inflation rate of 2.5 per cent.

Dear oh dear, can an expert weigh in on the Temasek report please?  What did it do right or wrong? Was it a good thing that it increased its investments abroad and move into energy and resources? Some analysis and insight please – don’t mean just giving pithy sound bites and quotes that even I can come up with.