This week marks the end of FY2022 in Singapore, and its various state-owned investors are busy wrapping up the year. In February, the Government released the estimated budget deficit for the year (SG$ 5.4 billion), despite expecting to withdraw the highest ordinary dividend (known as NIRC) to date, at SG$ 21.6 billion or US$ 16.0 billion.

The NIRC, or Net Income Return Contribution is one of the island-nation’s best kept secrets, together with GIC’s exact AuM. In theory, such entry is comprised of “up to 50% of the Net Investment Returns (NIR) on the net assets invested by MAS, GIC, and Temasek; and of up to 50% of the Net Investment Income (NII) derived from past reserves from other assets”. In practice, the NIRC is a black box whose details are not provided to these entities’ shareholders, i.e., the Singaporean citizenry.

MAS, or Monetary Authority of Singapore, is the Central Bank and manages the foreign reserves, including the special drawing rights, the reserve position in the IMF and the gold and foreign currency savings. The reserves have grown steadily at 7% average since 2000 but the interests received on such assets are likely to be lower than those at GIC or Temasek. MAS was part of the NII framework from 2000 to 2009, and of the NIR framework since then.

GIC, formerly known as the Government of Singapore Investment Corporation, is the country’s Sovereign Wealth Fund and manages an estimated US$ 744 billion. In January this year, the Parliament passed a bill that would translate into a US$ 137 billion transfer from MAS to GIC to be invested in higher-risk assets (we are monitoring MAS’ reserves and the transfer has not been effective yet). We believe that GIC has been the largest contributor to NIRC since year 2000, in addition to the extraordinary withdrawals it has experienced, including US$ 46.1 billion since the start of the pandemic.

Temasek Holdings insists in not being called a SWF (not even a fund) and, unlike GIC, manages a significant portfolio of domestic assets (24% based on underlying assets, 50% in SGD based on denomination). The investor was part of the NII framework from 2000 to 2015, and of the NIR framework since then. In the past two fiscal exercises, Temasek had a negative cash flow from investing activities of US$ 19.1 billion, although it is unclear whether NIRC is classified as such.

In any case, it is evident that MAS, GIC and Temasek continue to be a key part of Singapore Inc.’s finances and budget, with over US$ 1.5 trillion under management. We expect GIC and Temasek’s FY22 annual reports to be released around July, providing us with a clearer picture of their latest AuM and ordinary and extraordinary contributions to the public coffers.

Related funds GIC Temasek