The chairman of the Singapore government's main investment holding unit has attacked the practice of quarterly reporting for listed companies ahead of its introduction next year. S. Dhanabalan, chairman of Temasek, said yesterday that issuing three-monthly updates on corporate performance did not improve transparency but did encourage investors to take a damagingly short-term view of their equity holdings. Mr Dhanabalan is one of the most influential public figures in Singapore and held a string of senior cabinet positions in the 1980s and 1990s. Temasek, a unit of the finance ministry, controls many of Singapore's largest listed companies, including DBS Group and Singapore Airlines. 'I am dismayed that we in Singapore have decided to impose this practice [of quarterly reporting] on listed stocks,' he said in a speech at a conference on corporate governance. 'We seem to have tilted in favour of traders in stocks, rather than investors in stocks.' It is extremely rare for members of Singapore's tight-knit establishment to air disagreements about public policy. The finance ministry, which controls Temasek, said last month it had accepted proposals to make quarterly reporting compulsory for listed companies from January. Those with a market capitalisation of less than S$20 million (about HK$87.5) have a year's grace but must also start to file quarterly figures from 2004. At present, half-year reports are the minimum requirement in Singapore although some companies, including Temasek unit Singapore Telecommunications, already issue quarterly figures. 'I am not in favour of quarterly performing, not because of the cost. Any good company must have at least monthly figures of its performance,' Mr Dhanabalan said. 'But having a system that encourages the market to set quarterly targets and that beats the stock up or down according to penny variations from the target does not seem to me to encourage investment.' His comments came in a wider critique of prevailing investment practices, especially those in the United States. Mr Dhanabalan said many shareholders and managements had an unhealthy preoccupation with short-term stock trends, rather than the underlying, long-term health of the business. The attitude was exacerbated by the issue of stock options, he said. 'With management also having an increasing part of its fortunes tied to the stock price, the obsession with short-term price movements is compounded,' he said. 'The temptation to dress up results to ensure that the stock continues to perform is almost irresistable.' He said that half-yearly reports were adequate to keep investors fully informed of a company's operations and outlook, provided that they were comprehensive. 'It does not mean that making monthly reports makes it even more transparent. I know why people want monthly or quarterly reports . . . they are traders not investors,' he said. Mr Dhanabalan's stance is at odds with that of the Singapore finance ministry, which agreed last month that the practice was essential 'in the context of a rapidly evolving economy and increasingly volatile markets'. Quarterly reporting for listed businesses is the norm in most developed economies, including the United States, Canada and Britain. Mr Dhanabalan said Temasek was committed to promoting transparency in its stable of companies and that its own values could help prevent corporate malfeasance, such as that which led to the collapse of Enron, the US energy trader. 'The character of Temasek derives from the character of the political leadership in Singapore, with the focus on honesty, probity, meritocracy, focus on the right rather than the popular decision, and transparency,' he said. 'Being an involved, interested and informed owner, and with enough clout, [Temasek] can help to prevent the types of excesses seen in the US,' he added.