Temasek loses £150m on its July investment in Barclays
-
Say NO to CPF $60k Rule and Compulsory Annuity
http://www.petitiononline.com/annuity/petition.html
"This is yet another piece of evidence that exposes the greed, wickedness and incompetence of the best paid ministers in the world. It also shows that the dictatorship is probably making Singaporeans pay for the GIC's and Temasek's huge investment losses as well as the numerous subsidies and free scholarships given to foreigners."
August 27, 2007
Temasek loses £150m on its July investment in Barclays
£150m = S$459 mil (@£1= S$3.0636)
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2332299.ece Nick Hasell
Temasek, the Singapore investment vehicle that has emerged as a possible buyer of Nasdaq’s stake in the London Stock Exchange (LSE), has lost £150 million on its investment in Barclays in the space of a month.
The state-backed fund took a 2.1 per cent interest in the bank in late July as part of an equity refinancing to support Barclays’s €68 billion (£46 billion) bid for ABN Amro, the Dutch bank.
However, amid the turmoil in the world’s financial markets shares in Barclays have fallen by 15 per cent from the price that Temasek agreed to pay, cutting the value of its holding from £970 million to £820 million.
Barclays closed at 611p last week, coming under fresh pressure on Friday after the resignation of Edward Cahill, who had run the bankÂ’s collateralised debt obligations division.
Temasek paid 720p a share, with a commitment to invest a further £1.5 billion at 740p a share should the proposed merger with ABN Amro proceed. China Development Bank invested at the same time on the same terms and is now sitting on a £220 million loss on its £1.5 billion stake.
It emerged this weekend that Temasek had expressed an interest in the 30 per cent holding in the LSE being put up for sale by Nasdaq, potentially marking its first foray into BritainÂ’s financial services sector outside of banks. Aside from Barclays, it has built a 15 per cent interest in Standard Chartered, the emerging markets bank.
However, Nasdaq, which has appointed UBS to handle the auction, has said previously that it would not sell its LSE stake to a single bidder. Under UK listing rules, ownership of a 30 per cent stake would automatically trigger a bid for the entire company.
The Nasdaq holding is expected to draw wide interest, with the New York Stock Exchange, now merged with Euronext Liffe, and Borse Dubai expected to enter the fray. The governments of Dubai and Singapore regularly compete for the same assets, most publicly last year in the struggle to buy P&O, the ports operator, which was eventually was won by Dubai Ports World. Deutsche Börse, which launched a bid for the LSE three years ago at £1.3 billion, is also seen as a contender.
This month Temasek reported the value of its portfolio as $108 billion. Since 2002 it has stepped up its plans to diversify its spread of assets, with a target of allocating one third of its portfolio to Singapore, a third to the rest of Asia and the remainder to developed countries. At present 78 per cent of its assets are within Asia, including Singapore.
For the 12 months to March 31, Temasek reported a total shareholder return of 27 per cent. Aside from this monthÂ’s setback on its Barclays stake, it has run into difficulties closer to home. Last year its $3.8 billion investment in Shin Corporation, of Thailand, the telecoms operator once owned by Thaksin Shinawatra, the countryÂ’s former prime minister and now the owner of Manchester City Football Club, lost about one third of its value.
Temasek could not be reached for comment. -
Originally posted by Doddy:
I don't play stocks myself..... But I think it is a 'paper loss' only. When the shares goes up...... the money will be back.
[b]Say NO to CPF $60k Rule and Compulsory Annuity
http://www.petitiononline.com/annuity/petition.html
"This is yet another piece of evidence that exposes the greed, wickedness and incompetence of the best paid ministers in the world. It also shows that the dictatorship is probably making Singaporeans pay for the GIC's and Temasek's huge investment losses as well as the numerous subsidies and free scholarships given to foreigners."
August 27, 2007
Temasek loses £150m on its July investment in Barclays
£150m = S$459 mil (@£1= S$3.0636)
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article2332299.ece Nick Hasell
Temasek, the Singapore investment vehicle that has emerged as a possible buyer of Nasdaq’s stake in the London Stock Exchange (LSE), has lost £150 million on its investment in Barclays in the space of a month.
The state-backed fund took a 2.1 per cent interest in the bank in late July as part of an equity refinancing to support Barclays’s €68 billion (£46 billion) bid for ABN Amro, the Dutch bank.
However, amid the turmoil in the world’s financial markets shares in Barclays have fallen by 15 per cent from the price that Temasek agreed to pay, cutting the value of its holding from £970 million to £820 million.
Barclays closed at 611p last week, coming under fresh pressure on Friday after the resignation of Edward Cahill, who had run the bankÂ’s collateralised debt obligations division.
Temasek paid 720p a share, with a commitment to invest a further £1.5 billion at 740p a share should the proposed merger with ABN Amro proceed. China Development Bank invested at the same time on the same terms and is now sitting on a £220 million loss on its £1.5 billion stake.
It emerged this weekend that Temasek had expressed an interest in the 30 per cent holding in the LSE being put up for sale by Nasdaq, potentially marking its first foray into BritainÂ’s financial services sector outside of banks. Aside from Barclays, it has built a 15 per cent interest in Standard Chartered, the emerging markets bank.
However, Nasdaq, which has appointed UBS to handle the auction, has said previously that it would not sell its LSE stake to a single bidder. Under UK listing rules, ownership of a 30 per cent stake would automatically trigger a bid for the entire company.
The Nasdaq holding is expected to draw wide interest, with the New York Stock Exchange, now merged with Euronext Liffe, and Borse Dubai expected to enter the fray. The governments of Dubai and Singapore regularly compete for the same assets, most publicly last year in the struggle to buy P&O, the ports operator, which was eventually was won by Dubai Ports World. Deutsche Börse, which launched a bid for the LSE three years ago at £1.3 billion, is also seen as a contender.
This month Temasek reported the value of its portfolio as $108 billion. Since 2002 it has stepped up its plans to diversify its spread of assets, with a target of allocating one third of its portfolio to Singapore, a third to the rest of Asia and the remainder to developed countries. At present 78 per cent of its assets are within Asia, including Singapore.
For the 12 months to March 31, Temasek reported a total shareholder return of 27 per cent. Aside from this monthÂ’s setback on its Barclays stake, it has run into difficulties closer to home. Last year its $3.8 billion investment in Shin Corporation, of Thailand, the telecoms operator once owned by Thaksin Shinawatra, the countryÂ’s former prime minister and now the owner of Manchester City Football Club, lost about one third of its value.
Temasek could not be reached for comment.[/b] -
Yes, only paper loss. Stock market goes up and down everyday. Everyday people 'suffers' paper loss. Just that at Temasek's magnitude, the amount looks incredible.
-
Has Temasek suffered only paper losses, or have they bought themselves into a bank that is getting itself mired in quicksand of debts linked to the US financial crisis ?
Has Temasek not learnt well, after paying huge sums in tuition fee when involved with DBS purchase of the Thai-Danu Bank - when even their ex-CEO claimed little diligence were made before committing to buy up the entire Thai bank ?
How much more will Temasek have to pay before somone actually will sit up to say - ''enough is enough'' ?
Top Barclays Banker Quits In Funds Crisis
The credit crisis can be blamed for the resignation of a high-profile British banker who worked with volatile collateralized debt obligations
by Sean Farrell
The credit crunch has claimed its first high-profile resignation in the UK with the departure of Barclays' head of European collateralised debt obligations (CDOs), the explosive debt products that have helped to cause the meltdown.
Edward Cahill, who ran the European CDO business at Barclays Capital, Barclays' investment banking business, resigned on Monday. On Wednesday, two investment funds set up by his business had their credit ratings slashed by Standard & Poor's, the rating agency, because of losses from investments in US mortgage-backed securities.
CDOs are investment products that parcel up different grades of debt—from very risky to the supposedly safe—in a way that gets them high credit ratings. But massive defaults on sub-prime mortgages in the US, which feature in many CDOs, have caused huge losses for institutions and made investors steer clear of any debt they cannot understand.
The downgraded funds were so-called SIV-lites, versions of structured investment vehicles which invest in long-term assets and finance themselves with cheap short-term debt called asset-backed commercial paper (ABCP). Mr Cahill's team has been a leader in setting up SIV-lites for clients.
The commercial paper market has seized up because investors do not trust the credit ratings of the assets contained in the investment funds that issue the debt. US commercial paper plunged yesterday as buyers fled debt linked to sub-prime mortgages. The US Federal Reserve cut the lending rate it charges banks last week to try to get the market going again, but investors are still cashing in their ABCP and moving the money to the haven of US government bonds.
Fitch, the credit rating agency, said banks worldwide had $891bn (£444bn) at risk in ABCP, though it said this was manageable relative to their total assets.
The credit crisis claimed a scalp in Germany, where previously obscure banks have surprised the market with big losses from US sub-prime mortgages. Stefan Leusder, a management board member in charge of capital markets operations at Landesbanken Sachsen, resigned yesterday. The bank said last week it would need a £12bn credit line from other banks to cover itself against potential losses from sub-prime credit exposures.
Meanwhile, the fall-out from the financial markets crisis is set to hang over the hedge fund industry for a year or more as investors delay asking for their money back in the short term.
Much attention is focused on the coming round of redemptions, with many European investors in hedge funds able to ask for their money back before the end of this month. But bankers say many of London's biggest funds have not reported any redemption requests. While that may be good news for now, investors are more likely to wait for computer-driven quantitative funds to recover before making large-scale withdrawals.
Quantitative funds were meant to be a relatively safe way to invest in hedge funds but their models were unable to predict the recent market mania.
Provided by The Independent—from London, for Independent minds worldwide -
The following article was first published by Bloomberg in February 2005, was Temasek aware of what they are getting themselves into when buying into Barclays ?
Barclays Opens Up a Pandora's Box of Derivatives:
Mark Gilbert
Feb. 18 (Bloomberg) -- A Pandora's box threatens to creak open in the derivatives market, as aggrieved investors seek compensation from banks that sold them collateralized debt obligations whose ratings and value subsequently plummeted.
HSH Nordbank AG, a Hamburg-based lender, sued Barclays Plc over $151 million of collateralized debt it bought in 2000. The German bank said the bonds ``if saleable at all, have become worth a very great deal less.'' The London trial was set for Feb. 21.
The case raised the tantalizing prospect of a whole basket of dirty derivatives laundry airing in public. Pre-trial document teasers included claims that Barclays invested HSH's notes in another Barclays issue called Taunton, which invested in a Barclays issue named Flavius, which itself invested in Barclays notes called Savannah II, which bought part of two more issues, Dorset and Tullas, from (you guessed it) Barclays.
``Contrary to its duty and to its promises, Barclays substituted poorly performing assets,'' including buying aircraft- lease securities after terrorist attacks destroyed the World Trade Center on Sept. 11, HSH said in an outline of the case filed in the U.K. High Court in December.
Barclays said it did nothing wrong in its selling or management of the HSH bonds, which were named Corvus. The case notes said the London-based bank ``blames the fall in value of the Corvus notes primarily upon market conditions.''
Undisclosed Settlement
On Feb. 14, Barclays and HSH issued a joint press statement saying they'd reached a settlement. The terms of the accord weren't released. Given that HSH said it invested a further $420 million in two other collateralized debt sales managed by Barclays, the accommodation could have been for anything from zero to $571 million. It looked like those of us hoping to see a car crash in the derivatives market would be disappointed.
Later that day, though, Italy's Banca Popolare di Intra Scrl said in a statement through the Italian exchange that it's suing Bank of America Corp. in the U.K. courts for selling it ``securities having a higher risk than was represented by the seller and for an excessive price with respect to their risk level.''
The Italian bank, based in Verbania, wants the U.S. lender to either rewind the sales, which took place in 2000 and 2001, or pay it 40 million euros ($52 million) in compensation. Bank of America said ``the allegations are unfounded.''
$350 Billion Question
So here's the question: How many other owners of the $350 billion of collateralized debt that was in the market by mid-2002 are forming a line to sue their bankers?
To make a collateralized debt obligation, you bundle together a package of other securities, such as corporate bonds or credit- default swaps tied to company creditworthiness. By splitting the package into slices of differing quality, you make the riskiest portions absorb any losses first, cushioning the higher-rated pieces.
Yet, just as the collateralized debt market started to take off at the start of the decade, global creditworthiness plunged. Some 16 percent of securities that had AAA ratings in January 2002 lost their top grade in the next few years. The newfangled securities soured much more rapidly than other, similar asset- backed bonds had done in the past.
The collateralized debt owned by HSH, for example, started life with ratings of AAA to BBB from Fitch Ratings, all above investment grade. By the end of last year, they had dropped by at least 11 levels, to between BBB- and CC, well below investment grade.
Booming Market
The credit derivatives market has boomed in recent years, becoming very lucrative for the banks and traders involved. Recruitment consultants estimate that bonuses for U.S. derivatives professionals climbed as much as 20 percent last year as banks paid up to stop top performers from jumping on the hedge-fund bandwagon.
Barclays, for example, said in its 2004 earnings report that it held more than 191 billion pounds ($360 billion) of credit derivatives last year, a fourfold increase from the previous year, as measured by notional value. Moody's Investors Service said last month it rated $56 billion of European collateralized debt backed by default swaps in 2004, a 20 percent gain from the previous year.
As the credit derivatives market has grown, standards have improved. Everyone uses the same standard documents, and the rules governing changes in the baskets of assets underlying collateralized debt have been tightened. That wasn't the case at the start of the decade, when banks were still experimenting.
The decision by Barclays to settle with HSH will have given heart to any investor that's considering going to court to seek compensation. It's easy to see why even a bank convinced of its own innocence would rather pay off a litigant than see details of its derivatives dealing pored over in a lawsuit.
Maybe there won't be a flood of similar complaints. Still, as Dennis Gartman, editor of the daily market strategy report Gartman Letter, often points out, there's never only one cockroach.
To contact the writer of this column: Mark Gilbert in London [email protected] .
Last Updated: February 18, 2005 03:17 EST -
*Deleted*
-
dun worry, singapore is RICH
-
Temasek have been losing lots of money recently, hmm perhaps they should replace Ho ching with a more farsighted, sharp and capable top management.
-
Of course they should, but they won't.Originally posted by qlqq9:Temasek have been losing lots of money recently, hmm perhaps they should replace Ho ching with a more farsighted, sharp and capable top management.
So in the end the citizens have to pay for their mistakes. -
Oh, yes, she is another member of the Lee family so she is spared. What great privilege to be in the Lee family.Originally posted by stellazio:Of course they should, but they won't.
So in the end the citizens have to pay for their mistakes. -
ok just to ask a silly question....
Any news of this on the local media or press?
-
what about they making lots of money recently?Originally posted by qlqq9:Temasek have been losing lots of money recently, hmm perhaps they should replace Ho ching with a more farsighted, sharp and capable top management. -
Which project they made a profit?Originally posted by Gazelle:what about they making lots of money recently? -
Earnings and losses are part and parcel of the investment world. Such loss may be a paper loss only and not a nett loss. This, alone. casts substantial doubts as to the credibility of your assertion!
-
Now repeat after me "I will only open my mouth when I grow a brain." Repeat et infinitum.Originally posted by :Earnings and losses are part and parcel of the investment world. Such loss may be a paper loss only and not a nett loss. This, alone. casts substantial doubts as to the credibility of your assertion! -
Originally posted by Atobe:
You have sometimes question whether the idiots who assessed the risks involved did a good job. In most of the transactions done, sooner or later, a hosts of troubles turn up almost immediately after the purchases and driving the value of the investment down. This happened with Optus, and with a host of other investments. By the time the investments even turned an upswing, it would be years later but by then we had already committed too much on the initial investment.
Has Temasek suffered only paper losses, or have they bought themselves into a bank that is getting itself mired in quicksand of debts linked to the US financial crisis ?
Has [b]Temasek not learnt well, after paying huge sums in tuition fee when involved with DBS purchase of the Thai-Danu Bank - when even their ex-CEO claimed little diligence were made before committing to buy up the entire Thai bank ?
How much more will Temasek have to pay before somone actually will sit up to say - ''enough is enough'' ?
[/b]
What really happened? Why, they did a poor job assessing the quality of the investment and thus overpaid for it. -
Let's place bets that this latest embarrassment to Temasek won't make it to the papers.Originally posted by Jontst78:ok just to ask a silly question....
Any news of this on the local media or press? -
i think it did. but does it really matters? Ah gong got lui lehOriginally posted by Fingolfin_Noldor:Let's place bets that this latest embarrassment to Temasek won't make it to the papers. -
Optus was acquired by Singtel, why link it to Temasek? And btw, what is the problem with Optus acquisition?Originally posted by Fingolfin_Noldor:You have sometimes question whether the idiots who assessed the risks involved did a good job. In most of the transactions done, sooner or later, a hosts of troubles turn up almost immediately after the purchases and driving the value of the investment down. This happened with Optus, and with a host of other investments. By the time the investments even turned an upswing, it would be years later but by then we had already committed too much on the initial investment.
What really happened? Why, they did a poor job assessing the quality of the investment and thus overpaid for it. -
nitwit - the biggest share holder is................ no prize for guessing it rightOriginally posted by Gazelle:Optus was acquired by Singtel, why link it to Temasek? And btw, what is the problem with Optus acquisition? -
do petitions actually work in singapore??
-
i think it did for NKF. otherwise i think NO. but do your bits and we will wait and seeOriginally posted by dumbdumb!:do petitions actually work in singapore?? -
I dont think petitions can succeed in making the LKY government change their decision
But petition do mobilise many people for a common cause or a common idea.
That is a good start.Originally posted by dumbdumb!:do petitions actually work in singapore?? -
hahaha. grandpa lee got money leh.
-
There is a petition in UK asking Jeremy Clarkson to become England Prime Minister...
