PORT OF SPAIN, Trinidad, CMC – The Trinidad and Tobago government Monday dismissed a newspaper report that the country’s Heritage and Stabilisation Fund (HSF) had made a loss of US$913.5 million last financial year.
“I am concerned that there is a deliberate attempt in this country to publish misinformation in the hope that it would influence some people to behave in a particular way. How that behavior is and where I don’t know, but there is a deliberate attempt to publish, to introduce lies and general misinformation in the hope that the public will be guided by it,” Prime Minister Dr. Keith Rowley told a news conference.
The Sunday Express newspaper, quoting from what it said was the recently published annual report, said that since its establishment in 2007, this is the first time the sovereign wealth fund has recorded a total comprehensive loss for the year.
It said the US$913.5 million loss recorded last year sharply contrasted with the US$624 million net profit the HSF made in 2021 after tax. The paper said the closest the HSF ever came to a loss before last year was the US$9.7 million profit it made in 2011.
But Finance Minister Colm Imbert, speaking at the news conference here that as of Friday, June 9, the net asset value of the HSF was US$5.466 billion.
“That is an increase of US$754 million or just over five billion TT dollars in the actual value of the fund over the last nine months since September 2022.
“If you exclude a deposit that we made by the law…the last time deposits were made…was somewhere around 2007-8 because, after that, the deposits made to the fund by the former government were made concerning a deficit budget, where they borrowed money to put money into the Heritage Fund.”
Imbert said that the Rowley government had generated a surplus and used those funds to deposit the HSF in December 2022.
“So if you remove that deposit, the fund has generated a comprehensive income of almost US$600 million in the last nine months. So the figures, the data, and the conclusion in that Sunday Express article are eight months old, outdated, misleading, and wholly irrelevant because the fund’s value fluctuates over time as do all sovereign wealth funds”.
Imbert told reporters that the net value of the HSF has increased by US$327 million in the last six months between January 23 and June 23, and this is without any deposits into the fund from the government during that period.
Imbert said an examination of the volatility of the global market would show that it is impossible to adopt an amateurish, simplistic approach to data, noting that over the last couple of years, the volatility of the global market showed, for example, the HSF during May to June 2020 in the height of the COVID-19 pandemic “the fund increased in value by US$219 million.
“More strikingly, again during COVID during the two weeks April 3, 2020, to April 17, 2020…the value of the fund increased by US$280 million. So if the inverted logic of the Express article is to be followed, the fund managers should have received a national award for increasing the fund’s value by two billion TT dollars during two weeks.”
Imbert said the fund report for the period ending September 2022, which was the basis for that article, was laid in the parliament by him on February 3, 2023.
“It was in the public domain for 129 days. Curiously, the Express waited five months to comment on that report,” Imbert said, acknowledging that 2022 was “an extremely challenging year for market players and sovereign funds with volatile geopolitics, high inflation, and rising interest rates….”
But he told reporters that the fund experienced a turnaround in the last three months of last year when the value was increased by US$400 million.
“So this very misleading article was followed by an equally ill-informed editorial in the Express Today which lamented the fact that the fund lost 16 percent in 2022, according to that editorial, and this will become political fodder in the upcoming local government election.
“But the editorial writer needed to understand the irrelevance of its irresponsible commentary by June 2023. The find had increased its value by 16 percent since that report in September 2022.
He said withdrawals from the fund over the last eight years had totaled almost US$1.9 billion and were used to fund the national budget under challenging periods.
“When you take that withdrawal over the last eight years …and you understand that the fund’s net value as of June 9, 2023, is approximately US$5.5 billion, guess what the asset value was when we came into office, US$5.5 billion.
“So it means that this fund has generated TT$12 billion in comprehensive income since we assumed office in 2020…in September 2015, and the value today is the same as when we came into office,” Imbert told reporters.
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