Temasek loses £150m on its July investment in Barclays
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and so gazelle is assuming......Originally posted by AndrewPKYap:Just like nobody knows much about NKF under TT?
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Of course lah....the country that used to be colonised by english is now buying into a 300 over years old british bank.Originally posted by Jontst78:Well, the irony is, its a Brit newspaper reporting on the losses of a Singaporean GLC. While at the same time, have yet to hear a thing from a Singaporean mainstream media news channel or publication. -
just peanut only, no worryOriginally 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. -
Husband earns, Wife spends. Good on you.
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Doesn't it make the event more newsworthy in the Singapore context then?Originally posted by Gazelle:Of course lah....the country that used to be colonised by english is now buying into a 300 over years old british bank. -
I wonder the response from the local espicially the Thai Shin Corp matter has not been settled.Originally posted by Jontst78:Doesn't it make the event more newsworthy in the Singapore context then? -
nah..Temasek investment has to be kept as low profile as possible or it will attrace unncessary political critics from England.Originally posted by Jontst78:Doesn't it make the event more newsworthy in the Singapore context then? -
I read the Shin Corp has caused severe damage to Temasek portfolio.Originally posted by Gazelle:nah..Temasek investment has to be kept as low profile as possible or it will attrace unncessary political critics from England. -
it is never easy for Singapore GLCs and investment arm to acquire companies overseas because they are always being accused of having political motives. I guess thats the reason why sometime we have to pay a slight premium to get what we want. Temasek portfolio is worth about US$100b hence if you put that into perspective, shin corp issue is still managable.Originally posted by will4:I read the Shin Corp has caused severe damage to Temasek portfolio. -
At the present moment, the Thai cops are investigating whether there are any irregulariites n relationship between the two countries have soured.Originally posted by Gazelle:it is never easy for Singapore GLCs and investment arm to acquire companies overseas because they are always being accused of having political motives. I guess thats the reason why sometime we have to pay a slight premium to get what we want. Temasek portfolio is worth about US$100b hence if you put that into perspective, shin corp issue is still managable.
Thaksin has fled to England n there is an arrest warrant out for him.
If he got caught, what is the likely scenario for Spore?
U think the after election in Thailand, the latest govt will still want to pursue the matter? -
Singapore relationship with Thailand is alot bigger than Shin Corp and Thaksin and both being a strong supporter of ASEAN grouping I believe we can buried this unfortunate biz dealing without resulting to any political confrontation.Originally posted by will4:At the present moment, the Thai cops are investigating whether there are any irregulariites n relationship between the two countries have soured.
Thaksin has fled to England n there is an arrest warrant out for him.
If he got caught, what is the likely scenario for Spore?
U think the after election in Thailand, the latest govt will still want to pursue the matter?
thaksin is damn bloody smart politician, he is now taking advantage of Thai craze for football by using his EPL team Man City to get back is popularity in thailand. -
singapore looks for long term return.
Look at this:
Singapore Air, Temasek Make (US) $660 Million One-Day Gain (Update5),By Irene Shenwww.bloomberg.com,03.sept 2007.
In biz,u will lose and gain.Look for long term.....Sept. 3 (Bloomberg) -- Singapore Airlines Ltd. and Temasek Holdings Pte. made an instant $660 million profit after buying a 24 percent stake in China Eastern Airlines Corp., widening their access to the world's fastest-growing aviation market.
China Eastern rose 75 percent to a record HK$6.53 on the Hong Kong stock exchange after a three-month suspension, during which China's benchmark CSI 300 Index gained 40 percent. Singapore Airlines and its parent Temasek agreed to acquire Hong Kong-listed shares of China Eastern at HK$3.80 apiece. ... -
Temasek investment in China Eastern is a very strategic one and it is likely to benefit both SIA and the Singapore tourism industry, especially the up and coming IRs.
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not forgetting its a purely legit way to do some money washing. pump in a few hundred million buying players today, take out a few hundred million selling players tomorrow. clean money!Originally posted by Gazelle:Singapore relationship with Thailand is alot bigger than Shin Corp and Thaksin and both being a strong supporter of ASEAN grouping I believe we can buried this unfortunate biz dealing without resulting to any political confrontation.
thaksin is damn bloody smart politician, he is now taking advantage of Thai craze for football by using his EPL team Man City to get back is popularity in thailand. -
It look like Thailand is getting into trouble if the next PM is not able to handle the country plus the Temasek investment in Shin Corp has caused losses.Originally posted by holygoh:not forgetting its a purely legit way to do some money washing. pump in a few hundred million buying players today, take out a few hundred million selling players tomorrow. clean money! -
Barclays' lifeline to debt vehicle
Peter Thal Larsen and Stacy-Marie Ishmael, London | September 03, 2007
BARCLAYS has thrown a $US1.4 billion ($1.7 billion) lifeline to a troubled debt vehicle it created for Cairn Capital, the London-based hedge fund, and suggested it was considering similar moves for others.
The restructuring of Cairn High Grade Funding, a so-called SIV-lite, caps a tumultuous two weeks in which the British bank came under scrutiny over its exposure to potential losses.
Barclays shares rose almost 3 per cent as investors shrugged off news that the bank borrowed almost pound stg. 1.6 billion ($4 billion) from the Bank of England's emergency facility on Wednesday night after a glitch disrupted money markets.
Executives and advisers contacted big shareholders in an attempt to ease any concerns about the bank's finances after it rushed out a statement about its financial position on Thursday.
Barclays issued its statement after failing to persuade the Bank of England to abandon its strict rule of confidentiality about transactions involving the emergency facility.
Some industry insiders said the week demonstrated that the central bank's disclosure rules on emergency borrowing were appropriate only for normal market conditions.
The restructuring of Cairn's SIV-lite comes after three weeks in which Barclays and the hedge fund pored over the assets of the vehicle, which was facing financial difficulties after it was unable to borrow in the short-term commercial paper markets.
SIV-lites, which use commercial paper to fund longer-dated, senior debt, are under pressure because of falling values in their investments and the liquidity crunch in the markets.
Edward Cahill, the Barclays banker who helped create SIV-lites, resigned two weeks ago, triggering widespread speculation that Barclays was facing losses on the vehicles.
Under the terms of the restructuring, the vehicle's $US1.4billion of commercial paper will be replaced with a long-term credit facility from Barclays. Investors will also pay to insure the credit facility against default.
People involved said the restructuring could act as a template for other such moves. But it was unclear whether other SIV-lites created by Barclays could be rescued in the same way.
Two of the other SIV-lites arranged by Barclays Capital - Mainsail II and Golden Key - have already been forced to sell assets.
Barclays also created an SIV-lite for Sachsen LB, the failed German bank, whose woes led to the resignation on Friday of Horst Metz, finance minister of the German state of Saxony.
The move represents the most dramatic political fallout to date in Germany from the turmoil.
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U.S. Stocks Fall on Concern Over Housing Slump, Interest Rates
By Lynn Thomasson
Sept. 5 (Bloomberg) -- U.S. stocks fell for the first time in three days after pending home sales tumbled and short-term interest rates in Europe rose to the highest since January 2001.
Lehman Brothers Holdings Inc. and Morgan Stanley pushed financial shares to their biggest drop in six days on concern earnings at the securities firms will fall because investors are taking fewer risks. European stocks declined for the first time in a week after a rise in the London interbank offered rate prompted central bankers to increase scrutiny of money markets. Asian shares also retreated.
The Standard & Poor's 500 Index lost 16.92, or 1.1 percent, to 1,472.5 as of 1:48 p.m. in New York. The Dow Jones Industrial Average slipped 151.11, or 1.1 percent, to 13,297.75. The Nasdaq Composite Index decreased 19.73, or 0.8 percent, to 2,610.51.
``The probability of a recession has been increasing,'' said Vadim Zlotnikov, chief equity strategist at Sanford C. Bernstein & Co. in New York. ``As companies start to miss earnings forecasts and you get profit margin contraction, I think that could create enough fear for another sell-off.''
A private report said the number of Americans signing contracts to buy previously owned homes in July dropped by the most since records began in 2001. A separate report showed declining sales of commercial properties.
Homebuilders in S&P indexes fell 3.9 percent as a group and a gauge of real-estate companies slipped 2.6 percent.
Lehman, Morgan Stanley
Lehman Brothers lost $1.64 to $54.82. Morgan Stanley dropped $1.28 to $62.65.
Estimates for third-quarter earnings at the two investment banks were cut by Citi Investment Research analysts as investors borrow less and fixed-income revenue declines.
Citi analyst Prashant Bhatia reduced his estimate for Lehman's earnings by 28 percent to $1.40 a share, below the $1.65 average estimate compiled by Bloomberg. For Morgan Stanley, Citi cut its estimate by 8.6 percent to $1.60, lower than the $1.69 average in Bloomberg's survey.
The S&P 500 has risen 3.8 percent this year. It gained 2.2 percent in the previous two days after Federal Reserve Chairman Ben S. Bernanke pledged to ``act as needed'' to keep losses in credit markets from sending the economy into a recession.
``The longer-term view'' for financial markets is ``healthy,'' said Thomas Sowanick, who helps manage $7 billion as chief investment officer of Clearbrook Financial LLC. ``We went through a prolonged period of excess in housing and housing-related debt and we're working our way through it.''
Higher Borrowing Costs
The three-month Libor dollar rate increased to 5.72 percent, the highest since January 2001, from 5.70 percent yesterday and 5.36 percent at the end of July, the British Bankers Association said. Other short-term rates also rose.
The Bank of England offered extra cash to financial institutions and the European Central Bank said it is ``ready to contribute.''
The Fed added $8.5 billion in temporary reserves to the banking system when it arranged overnight repurchase agreements, or repos.
Citigroup
Citigroup dropped 98 cents to $46.23. The world's biggest bank may face losses on investment units known as ``conduits'' and Structured Investment Vehicles, which sell tens of billions of dollars of commercial paper, the Wall Street Journal said.
If the vehicles fail to sell the short-term debt, or suffer large losses on assets, Citigroup might have to lend money to keep them going, or take on some of the losses, the Journal said. The bank has about a quarter of the market for SIVs, according to a Citigroup research report, the newspaper wrote.
The units are robust and their asset portfolios are performing well, according to a letter written by Paul Stephens and Richard Burrows, who head the group that supervises Citigroup's SIVs. A Citigroup spokesman declined to comment on SIV losses, the newspaper added.
Separately, Erik Sirri, head of the U.S. Securities and Exchange Commission's market regulation division, said the agency is scrutinizing the biggest Wall Street securities firms to find out whether they face losses from affiliated investment vehicles such as conduits that sold short-term debt.
Financial shares in the S&P 500 retreated 1.9 percent as a group and contributed the most to the decline in the overall index.
Costco Wholesale Corp. dropped $3.02 to $58.59. The discount warehouse that sells everything from towels to computers said August sales at stores open at least a year rose 2 percent, less than analysts estimated. Bernstein said analysts estimated an increase of 5.3 percent.
Tyson, Mattel
Tyson Foods Inc. fell $2.71 to $19.30. The biggest U.S. meat processor cut its full-year earnings forecast as fourth- quarter cattle and hog costs rose more than expected and beef sales to South Korea were disrupted. Profit will be 72 cents to 80 cents a share, Tyson Foods said. The company had previously forecast 82 cents to 92 cents.
Mattel Inc., the world's largest toymaker, declined 37 cents to $21.60. Mattel said it found about 848,000 Chinese-made Barbie and Fisher-Price products with paint that may contain excessive levels of lead.
Forest Laboratories Inc. jumped $3.94 to $41.82. The drugmaker won a U.S. appeals court ruling upholding the patent on its antidepressant Lexapro and a ban on generic competition from Teva Pharmaceutical Industries Ltd.
The index of signed purchase agreements, or pending home resales, fell 12.2 percent in July to 89.9, the National Association of Realtors said. Economists in a Bloomberg survey projected a 2.2 percent drop.
Separately, investors in July bought the fewest commercial properties since August 2006 and apartment building acquisitions were down 50 percent, data compiled by industry consultants at New York-based Real Capital Analytics Inc. show.
Jobs Report
U.S. companies added the fewest jobs in August since June 2003, a report by ADP Employer Services showed. The 38,000 increase last month was less than half the 80,000 gain predicted in a Bloomberg survey of economists.
The Organization for Economic Cooperation and Development trimmed its 2007 forecast for U.S. economic growth to 1.9 percent from a 2.1 percent estimate in May. Economists polled by Bloomberg in the first week of August expect 2 percent growth.
Beige Book
A regional Federal Reserve survey will provide further details about how higher corporate borrowing costs are affecting economic growth. The so-called Beige Book is due at 2 p.m.
All 10 industry groups in the S&P 500 declined. The benchmark index has swung more than 1 percent in five of the last six trading sessions.
Assurant Inc. declined $1.41 to $50.52. The insurer that is undergoing an accounting probe said it suspended a stock buyback program and doesn't expect to initiate a new one this year.
Altria Group Inc., the world's largest tobacco company, slid $1.11 to $68.56 after Goldman, Sachs & Co. cut its recommendation on the stock to ``neutral'' from ``buy.''
Guess? Inc. lost $3.63 to $49.77. The clothing maker said annual profit would be $1.79 to $1.84 a share. Analysts estimated $1.83, on average, according to a Bloomberg survey.
Bradford & Bingley Plc paced a decline in Europe after Lehman Brothers cut its recommendation on shares of the U.K. mortgage lender, saying rising loan costs may erode earnings.
Credit Suisse Group American depositary receipts, each representing one share, dropped 96 cents to $66.39. Deutsche Bank AG lost $2.29 to $126.01. The two European investment banks will take a ``material hit'' to earnings from writedowns associated with securities related to U.S. subprime loans, said analysts at Lehman Brothers.
Mizuho Financial Group Inc., Japan's second-biggest bank, fell after the country's chief financial regulator said he will monitor banks' credit-market losses.
Europe's Dow Jones Stoxx 600 Index fell 1.8 percent to 372.66. Japan's Nikkei 225 Stock Average dropped 1.6 percent to 16,158.45.
To contact the reporter on this story: Lynn Thomasson in New York at [email protected] .
Last Updated: September 5, 2007 13:49 EDT
US stockmarket is still falling. Dow Jones now 13,253.85 -195.01 -1.45 %
S&P 1,468.11 -21.31 -1.43 %
Nasdaq 4372.57 -74.63 -1.68 %
It is going to be a bad day for Asian stockmarket tomorrow
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Oh really ???Originally posted by Gazelle:it is never easy for Singapore GLCs and investment arm to acquire companies overseas because they are always being accused of having political motives. I guess thats the reason why sometime we have to pay a slight premium to get what we want. Temasek portfolio is worth about US$100b hence if you put that into perspective, shin corp issue is still managable.
Looks like we just got into another crappy deal for another one of GLC ( DBS Bank)
Thai TMB halts talks with DBS, looks to ING
Reuters - Wednesday, September 5
BANGKOK, Sept 5 - Thailand's troubled TMB Bank has opened talks on selling a stake to Dutch financial group ING Group after negotiations with Singapore's DBS Bank failed, executives said on Wednesday
The comments sent shares in TMB Bank up 3.8 percent to near a one-week high of 1.93 baht at 0938 GMT, while the main index was up 0.58 percent.
The number five Thai bank, which had delayed a $1 billion rights issue since June while negotiating with DBS on raising its 16 percent stake, had allowed ING Group to start due diligence on its financial position a week ago, the executives told Reuters.
"If DBS doesn't exercise its right to subscribe to the TMB issue, the bank will allocate new shares instead to ING, which can take as much as 25 percent," said one of the executives who declined to be identified.
TMB chairman Somchainuk Engtrakul declined to comment, but said he expected the bank to complete its capital raising effort in December.
"What I can confirm is that the bank will complete the fund raising with a new cash injection ready in December certainly," Somchainuk told Reuters.
TMB, 31.2 percent owned by the Finance Ministry, had expected to complete the issue in June, but delayed it pending talks with DBS Group on the Singapore-based bank raising its holding.
But DBS was disappointed with TMB's performance, having to book a S$159 million impairment on the value of its stake in TMB, which reported a second quarter loss due to huge bad debt provisions.
TMB, facing shrinking earnings and loan growth, has added about 20 billion baht in provisions since late 2006, resulting in a 12.8 billion baht net loss last year and a 18.1 billion baht loss in the first six months of this year.
TMB Bank said last week its audited net loss for the April-June quarter was 18.4 billion baht, more than double the 6.13 billion baht net loss it announced last month due to a goodwill write off, prompting earnings downgrades.
Analysts said last week they would cut 2007 earnings forecasts and share price targets for the bank. Broker KGI Securities said it cut its share price target to 1.67 baht and rated the stock a "sell".
Eight analysts polled by Reuters Estimates had forecast a net loss of 4 billion baht in 2007, down from a 2006 net loss of 12.28 billion baht.
Sluggish domestic economic growth this year, added to the bank's poor prospects as consumption and investment weakened, caused TMB's bad debt to rise to 12 percent at the end of June from last year's 10 percent.
The state-run bank has said loan growth was expected to shrink 5-10 percent this year, blaming a slowdown of economic growth and bad loan sales. By July, its lending had dropped 8.2 percent since the start of this year. -
Temasek's Asia buys worth billions more
Renewed focus in region proved timely, notwithstanding Shin blip
By LYNETTE KHOO
(SINGAPORE) For more than a year now, Temasek's apparently ill-placed investment in the beleaguered Shin Corp has hogged the headlines. But calculations made by BT on the Singapore investment company's other major ventures since 2002 - when it started focusing on direct investment opportunities in Asia's fastest-growing economies - tell a different story.
Away from the hype generated by its Thai foray, Temasek's other overseas investments in listed entities have largely paid off. Of course, the timing that Temasek picked to reshape its portfolio has helped as Asian markets have been on a bull run since 2003. In most cases, the company is sitting on hefty, unrealised gains.
Temasek, for example, paid US$2 billion for a 4.8 per cent stake in Bank of China (BOC) in 2005, which has since been diluted to 4.6 per cent. Even so, it is now worth some US$8.69 billion based on yesterday's market capitalisation.
Temasek's 5.9 per cent stake in China Construction Bank (CCB), for which it paid some US$2.47 billion, has ballooned in value to about US$11.64 billion as CCB shares hit an all-time high of HK$6.84 yesterday. Temasek started buying stakes in both entities even before their initial public offerings (IPOs). After the IPO, the share prices of BOC and CCB have jumped 33 per cent and 191 per cent respectively.
Temasek's bet on ICICI Bank, India's largest financial institution by market capitalisation, has also paid off. The share has surged more than 220 per cent since Temasek bought into the company in December 2003. Meanwhile, the value of Temasek's 6.5 per cent stake has risen from US$275-US$300 million to US$1.58 billion currently.
'The banks they have invested in have done very well because the financial sector has done well, so it shows up more (in their portfolio),' said Fundsupermart general manager Wong Sui Jau.
Temasek bought into Standard Chartered last year and although the results have not been as spectacular as elsewhere, it is still sitting on paper gains of well over US$400 million. Its stake in the UK-based bank stands at US$6.93 billion, higher than some US$6.5 billion that is invested so far.
Market watchers noted that investments in listed banks - which are proxy to the growth of these economies - reflect that Temasek is fairly bullish on the prospects of the countries it is investing in. Meanwhile, its move to raise its stake in Stanchart from 15 per cent to 16.3 per cent last month suggests that it sees value in the bank following the recent market correction.
'To get an exposure to an economy, the best investment is in banks because they typically grow as a multiple of the underlying economic growth and are basically leveraged institutions,' said a local fund manager who manages some US$50 million worth of assets.
Temasek's more recent investment in Barclays, however, has seen initial jitters as Barclays' shares have fallen by some 15 per cent from the price that Temasek agreed to pay in July. The value of its 2.1 per cent stakeholding has fallen from US$1.97 billion to US$1.76 billion, though observers stress that Temasek is in it for the long haul and gains might flow in once the US sub-prime tremors subside and Barclays' takeover bid for ABN Amro is resolved.
According to its latest annual report, Temasek manages a portfolio of more than US$100 billion, focusing primarily in Asia. For the year ended March 2007, its net portfolio value crossed the US$100 billion mark for the first time at S$164 billion (US$108 billion), up from S$129 billion a year earlier, with a healthy total shareholder return of more than 27 per cent by market value including dividends.
Temasek's investments post-2002 are now valued at $58 billion and delivered a five-year compounded return of 38 per cent per year compared with a five-year compounded return of 17 per cent for the rest of the portfolio.
But as with any form of investments, Temasek did not get it right all the time. The investment house is estimated to be nursing paper losses of US$1.1 billion in Shin Corp, after it ploughed US$2.3 billion (73.3 billion baht) through its subsidiaries for a 49 per cent interest in the telco. The capital value of its current 42 per cent stake held through unit Aspen Holdings is now worth US$1.23 billion based on its latest market cap.
Shin Corp remains under the scrutiny of the Thai government on alleged breach of foreign ownership rules. An impairment charge on the investment affected Temasek's bottom line, dragging down net profit 29 per cent from a year ago to S$9.11 billion.
The focus has now shifted to its latest venture - an 8.3 per cent stake in loss-making China Eastern Airlines for US$315 million. It did this in tandem with Singapore Airlines, which snapped up a 15.7 per cent stake.
'Whether this deal makes sense or not depends on the price. Buying into companies that are losing money may be good investment because it's cheap and there is the assumption that at some point, it will make money,' the local fund manager said.
The move has so far, proved to be a good bet. Over the past four days, it has already rewarded Temasek with paper gains of US$303 million - almost doubling the amount it invested. -
they are making so much yet there is a need to increase gst to help the poor.
this is amazing!!!!!!!