* GIC sees further weakness in financial markets - official
* Fancies gold; to avoid dollar, sterling currencies
By Kevin Lim and Saeed Azhar
SINGAPORE, March 10 An official from the
Government of Singapore Investment Corp (GIC) said he expects
more weakness in financial markets in the next 12-18 months,
and recommended investors hold gold and other safe assets such
as government bonds.
GIC, one of the world's largest sovereign funds with an
estimated $200 billion-plus in assets, has invested
aggressively in troubled global lenders, picking up
multi-billion dollar stakes in Citigroup (C.N) and UBS
UBSN.VX in late 2007 and early 2008.
There is "systemic capital inadequacy globally", and the
world will probably see "three years of a very vicious
downcycle," GIC's director of economics and strategy, Yeoh Lam
Keong, told the Investment Management Association of Singapore
conference on Tuesday
"This is a very destructive process for assets."
Yeoh, who said he was speaking in his personal capacity,
showed a slide prepared by GIC that indicated global writedowns
in the financial sector could reach $3.8 trillion by 2013 and
that only about 30 percent of the losses had been booked so
Yeoh suggested investors hold gold, sovereign bonds and
currencies such as the Japanese yen, Chinese yuan and Canadian
He said he liked gold because governments were under
pressure to cheapen their currencies to compensate for falling
demand, and that some countries such as the United States and
Britain would eventually be forced to monetise their debt by
"I would avoid these currencies like the plague," he said
in reference to the dollar and sterling.
For a factbox on GIC, see [ID:nGICFACTBO]
(Editing by Anshuman Daga)