IT IS refreshing that Mr Ignatius Low, in his commentary last Saturday ('Temasek should clear the air'), and Mr Denis Distant, in his letter on Monday ('Temasek must set example on transparency'), have urged for public clarity by Temasek over its sizeable divestment of Bank of America (BoA) shares.

But their call for transparency should be reasonable - rather than a tell-all stand. The transparency should be restricted to performance reports, broad asset allocation for the prior financial year, a report on performance attribution and perhaps comments on future strategies.

Granted that Mr Low's estimate of the loss realised for the BoA investment - a consequence of Temasek's investment in Merrill Lynch which was taken over by BoA - is not a trivial amount, one has to accept that it is part of a portfolio transaction.

We cannot go around pressuring our sovereign wealth funds (SWFs) to explain every single trade.

Our SWFs should be judged on their overall investment targets within the given guidelines.

Succeeding in getting our SWFs to clear the air on single transactions may offer only a false sense of comfort that public accountability and transparency have been satiated.

The undesirable consequence is to turn investment management into a spectator sport, which may have the deleterious effect of turning our SWF managers into playing it ultra safe.

Funds around the world, be they hedge funds or otherwise, are the competition for our SWFs. The competitors do not explain every single transaction to their investors and shareholders.

Let us not force our SWFs into competing with one hand tied behind their backs against equally hefty or even larger entities.

Johnny Heng

This article was first published in The Straits Times.