Base investments on fundamentals

THE recent call by the Singapore Business Federation (SBF) for sovereign wealth fund Government Investment Corporation (GIC) to use Central Provident Fund (CPF) monies to invest in the local stock market has stirred up a hornet's nest. It is a controversial idea, daring and provocative in its suggestion.

However, any investment must be based solely on sound fundamental principles and on the reward-vs-risk ratio, whether it be in the local stock market or in overseas markets. There should be nothing "nationalistic" about it, contrary to what Society of Remisiers Singapore (SRS) president Jimmy Ho advocated in "Call for GIC to invest CPF in local stocks stirs debate" (BT Jan 8).

It makes illogical sense to throw good money after bad, especially if the local market is not doing so well compared to overseas markets, just so as to appear "nationalistic". Besides, CPF monies cannot and should not be "gambled" away. History is replete with examples of how governments have lost billions trying to prop up markets.