Getting the figures right, getting the right figures
27 April 2001
Today, The Straits Times Money section published two articles by Hugh Chow which mentioned Keppel Capital. One was on the stock price jumping the previous day due to market talk that strategic partner Allied Irish Banks (AIB) may soon decide to exercise its option to take a 24.8 per cent stake in the bank. The article mentioned that the stock price "rose nearly 29 per cent, or 17 cents, to $2.73".
You don't have to be a mathematics graduate to realise that the figures don't make sense. The closing price on the previous trading day was $2.56. A 17-cent rise represents a gain of 6.6 percent. Possibly the writer meant to say that the closing price was a 29 percent gain from the stock's 52-week low of $2.11 but got the percentage figures confused.
In the other article -- "Taking Stock", a round-up of the previous day's stock market action -- the same writer mentioned that "Keppel Corp rose 12 cents to $3.06…Keppel Capital rose 17 cents to $2.73… while Keppel Telecommunications and Transportation (Keppel T&T) managed a more modest (italics added) gain of 8.5 cents to $1". Now the gains in percentage terms are 4.1 percent, 6.6 percent and 9.3 percent respectively. While Keppel T&T's gain was the lowest in absolute terms, it was the highest in percentage terms. The use of the adjective "modest" to describe it seems rather inappropriate (the next thing you know, somebody is going to describe Singapore Press Holdings as one of the most volatile stocks on the Singapore Exchange because it tends to make among the biggest price moves).
I don't mean to nit-pick but the appearance of two incidences of dubious mathematics on the same day by the same writer leaves me wondering whether The Straits Times should make a greater effort in ensuring that its writers -- at least for the Money section -- are not mathematically challenged.
In other Government-linked companies, getting the right figures is not as simple as getting the percentages right. Over the past years, more than a few Singaporeans have asked for a greater degree of disclosure of the operations and performance of the Government of Singapore Investment Corporation (GIC), caretaker of Singapore's billions of dollars' worth of reserves. But their wish seems unlikely to be fulfilled any time soon.
Today's edition of The Straits Times featured an interview that Senior Minister Lee Kuan Yew gave to The Asian Wall Street Journal. In it, Mr Lee told the Journal that GIC should become more open about its operations to attract top global talent. However, it is not in Singapore's interest to release details of GIC's assets and yearly investment returns. He added that GIC's accounts are checked by Singapore's Accountant-General and Auditor-General and examined by the Council of Presidential Advisers. "There is total accountability," said Mr Lee.
Of course for strategic reasons, the GIC -- which is, after all, a fund management company -- may be justified in not providing full disclosure of its operations. Furthermore, investment by committee -- a committee of three million or so Singaporeans at that -- is usually not a good idea. However, the "total accountability" of GIC -- as claimed by Mr Lee -- apparently stops at the Government, not the citizens, the ultimate shareholders of GIC funds.
Disclaimer: The commentaries posted here represent the opinions of the author at the time of posting and should not be taken as investment advice. Readers who wish to take any investment action based on information obtained from this site should seek appropriate advice from a qualified financial adviser.