Temasek selling Merrill Lynch at a loss
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Temasek Selling Merrill Lynch
Half or total of 87m shares have been sold off at a loss, according to US recorded filings. By Seah Chiang Nee
Jul 24, 2008Temasek Holdings has sold off half its ill-timed investment in Merrill Lynch - or about 87m shares, according to a mutual funds report on institutional trades on US stocks.
The online report, MFFAIRS (Mutual Fund Facts About Individual Stocks), reported it sold off 86,949,594 shares (50%), leaving a current holdings of 86,949,594 shares (50%), according to the filings made public.
The report gave no exact date or price of the sale.
(Update: Making no reference to Mffairs reported sale, aTemasek source says its ML shareholding has remained unchanged at 86.9m since March. See accompanying story).Neither has there been any confirmation from Temasek, which had paid US$48 a share last year. http://www.mffais.com/newsarticles/2008-07-22/2473637-211738.html
Last week Merrill Lynch was traded at $31.
At that price Temasek would have suffered a loss of $17 a share - or a total loss of about US$1.48b for the 87mil shares.
Despite massive write-downs and capital injection, Merrill Lynch's outlook remains uncertain, reports Bloomberg.
The company's equity capital position is weak relative to competitors, said Brad Hintz, a New York-based analyst at Sanford C Bernstein, reports Ambereen Choudhury.
"With $19.9b in CDOs still frozen on the balance sheet and with counterparty risk rising on the hedges underlying these troubled positions, the potential for additional material write-downs remains a concern,” Hintz said.
The New York-based firm's credit rating was cut last week by Moody's Investors Service to A2 from A1.
The third-biggest US securities firm probably will report a loss of $6.57 a share this year, compared with an earlier forecast of $1.07, Hintz said.
The revised estimate assumes the company generates no earnings in the second half.
Merrill may have to take an additional $10 billion of pre-tax write-downs related to its holdings of mortgage securities, Moody's estimates.
Huge paper losses
The disposal leaves Temasek Holdings and the Government Investment Corporation (GIC) still holding substantial parts of big troubled Western banks.Its remaining investments in UBS (Switzerland), Citigroup, Barclays and Merrill Lynch - at an original cost of US$21.88b - have declined on by some 47 percent in value.
That is a paper loss of US$10.28b. However, Minister Mentor Lee Kuan Yew had said these investments were made as a long-term strategy of 30 years.
But as the Merrill Lynch sale shows, Temasek is not inflexible about cutting losses, if things threaten to get worse.
The political leadership has defended its investment of these sub-prime banks as “an opportunistic” foray that can happen once in a long while.
It believes these companies will survive the crisis and emerge stronger.
Some experts believe that Temasek has made an error of judgment.
Investment guru Jim Rogers said in July he believed that US bank stocks could fall further and predicted that Singapore's state investors would lose money on Citigroup and Merrill Lynch.
"I'm shorting investment banks on Wall Street," the successful investor said. "It grieves me to see what Singapore is doing. They are going to lose money."
At the Nomura Dialogue recently, Minister Mentor Lee Kuan Yew reported to investment mistakes, but that no one had benefited from it.
Singaporeans who want to see greater transparency in the government’s investments in troubled companies are unhappy with this vague answer to a serious problem.
One writer said, “Should we just move on? I do not think so. The patently huge mistake is not merely the result of recklessness but rather a systemic lack of accountability in making some of our largest investments.
“Let it be clear, the harm is terminally done. The entire reserves system must be re-examined and audited.”
Said slohand, "I saw the interview on TV last night and felt shortchanged.
"He brushed aside the issues with the logic that since the officers who made the decisions were not the beneficiaries in any sense of the word, such lapses are mistakes and are therefore acceptable...
"..The size indicates that it can only come from the very top."
The skies are dark but the storm has not broke yet.
By Seah Chiang Nee -
http://www.todayonline.com/articles/267205.asp
With Merrill shares now selling at a huge discount to the US$48 ($65) apiece that Temasek paid last year, this would have meant a massive loss of some US$1.48 billion at Thursday’s close of US$31 a share.
Dismissing the rumours, Temasek’s managing director for corporate affairs said: “Temasek does not comment on speculation from dubious sources.” Warning investors against trading on such rumours, she added: “Investors and interested public are advised to refer only to official sources of information for announcements on major transactions.”
Bloomberg said that according to data that it compiles, there were no filings relating to Temasek’s stake in Merrill in the past week. It also said that the New York-based company ranks second behind Citigroup in posting the most amount of writedowns and losses triggered by a global credit contraction. Last week, Merrill reported a wider-than-estimated second-quarter loss of US$4.65 billion. Besides its stake in Merrill, Temasek and the Government of Singapore Investment Corporation (GIC) invested some US$22 billion in Swiss banking giant UBS, Citigroup, and Barclays in the wake of the sub-prime crisis.Some feel that Temasek had overpaid for these investments in a weak equities market. They appear to have a case as these investments, including Merrill, have declined by some 47 per cent in value.
So the despots had lost approximately US$10 billion of Singaporeans hard earned money in a few months?
Dishonorable despots.
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Which idiot claimed that they needed to raise GST to help the poor?
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Originally posted by AndrewPKYap:
So the despots had lost approximately US$10 billion of Singaporeans hard earned money in a few months?
Dishonorable despots.
Bring forth your evidence....
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The only way u wont loss in investment is NEVER INVEST.
Deposit in bank or dig a hole.
But u will be eaten by inflation or change in exchange rate.
2.Can u guy vertify before u post?Put a caution if it is not
confirmed.if u just post without vertification,U will do a dis service
for Oppositions in SG---not credible.
3.Temasek still not confirm--
July 25, 2008 Temasek stake in Merrill unchanged since Marchhttp://www.straitstimes.com/Latest+News/Money/STIStory_261199.html
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I dont understand.....the first post itself is unclear and inconclusive....what can we discuss about it?
Meat Pao.
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Haha. Some people will jump at advancing their agenda at the slightest hint, be it proven or fake.
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Originally posted by Meat Pao:
I dont understand.....the first post itself is unclear and inconclusive....what can we discuss about it?
Meat Pao.
Speak for yourself.
If you can't comprehend, doesn't mean everybody else is like you.
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Originally posted by lionnoisy:
The only way u wont loss in investment is NEVER INVEST.
Deposit in bank or dig a hole.
But u will be eaten by inflation or change in exchange rate.
2.Can u guy vertify before u post?Put a caution if it is not
confirmed.if u just post without vertification,U will do a dis service
for Oppositions in SG---not credible.
3.Temasek still not confirm--
July 25, 2008
<!-- headline one : start --> Temasek stake in Merrill unchanged since Marchhttp://www.straitstimes.com/Latest+News/Money/STIStory_261199.html
It's not never invest, but invest wisely. When they made the plunge to invest in Merrill Lynch, I know it's a negative sum game from the beginning. Most folks with financial intelligence would know from the beginning that the sub prime crisis will unfurl itself the following year. But dictators with NO financial knowledge will make important investment decisions based on their understanding or lack of understanding of the markets.Fools Rush In Where Angels Fear To Tread -- Alexander Pope.
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Hahaha.....
I don't know what kind of investment strategies the big Ho has.
But when they supposed to short, they long; when they suppose to long, they short.
The big Ho eats from the arse and shit from the mouth.
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Originally posted by lionnoisy:
The only way u wont loss in investment is NEVER INVEST.
Deposit in bank or dig a hole.
But u will be eaten by inflation or change in exchange rate.
2.Can u guy vertify before u post?Put a caution if it is not
confirmed.if u just post without vertification,U will do a dis service
for Oppositions in SG---not credible.
3.Temasek still not confirm--
July 25, 2008
<!-- headline one : start --> Temasek stake in Merrill unchanged since Marchhttp://www.straitstimes.com/Latest+News/Money/STIStory_261199.html
Hi Lionnoisy,
Are you trying to educate the public that there are losses?
If so, how much? How big?
Oh , now you jia lat liao.
Your master......
no cookies... for you....
bad boy!
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Lionnisy,
You said T nehber confirm yet.
That is precisely what makes me puzzled about today's Sunday Time's report :
Money Section, Pg 30 :
"Temasek did not confirm or deny the report yesterday. It said it "does not comment on speculation from dubious sources".
But the Straits Times understands that Temasek has in fact not sold half its stake - it only appeared to do so due to a reporting glitch.
A source said..."
If T nehber officially replied, how can ST understand?
And is it not so good an idea to report based on info that is not T's official released info for the press?
Why is there no official press statement? Why not deny it officially?
What is the hum?
Wow, nevertheless the reporter seems like very re'source'ful leh.
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Temasek sold '5m Merrill shares', not half its stake
http://www.straitstimes.com/Free/Story/STIStory_261446.html
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Don't believe the states times...GLC is Giant Loss-making Company
Number one, number one, we are number one again
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ho jinx strikes again
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Don't be misled by people who have never done any investments. Paper losses are still losses. To say otherwise is self-delusion. To put the losses in perspective:
10,000,000,000 divide by 3,000,000 (Singapore citizens) = $3,333 per citizen
That is the cost of bad judgement.
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I only got $600 in govt handouts this year. Should I be angry? :D
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when did they started the investment on merrill lynch?
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Invest.. of course must invest big and take risks ah. With 20 billion.. you can make 200 billion, the most you lose is only 20 billion or so. Anyway Singaporeans will never see the money, know how much there is or what's it used for.. So why you guys worry so much?
To me, if I am GIC chairman.. I will invest more than 20 billion! More like 50-60 billion.. if I am right and I make 100-200 billions, I and GIC becomes hero of Singapore. Lose already, nobody knows how much is lost anyway and I still get to keep my job and million dollar salary.
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Originally posted by ShitSandwich:
Invest.. of course must invest big and take risks ah. With 20 billion.. you can make 200 billion, the most you lose is only 20 billion or so. Anyway Singaporeans will never see the money, know how much there is or what's it used for.. So why you guys worry so much?
To me, if I am GIC chairman.. I will invest more than 20 billion! More like 50-60 billion.. if I am right and I make 100-200 billions, I and GIC becomes hero of Singapore. Lose already, nobody knows how much is lost anyway and I still get to keep my job and million dollar salary.
And if you have losses? Most likely, I must say there will never be any losses. ;)Where could money come from if need to invest more?
I have no idea whatsoever.
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Great article on investment vs speculation on WSJ. Key points:
1. If the banks themselves cannot value their own assets, what makes you, an outsider, think you can?
2. If you cannot value a company's assets, you cannot do a thorough analysis.
3. Without thorough analysis, you are speculating, not investing.
4. Hence, Temasek and GIC are speculating with SG reserves...
http://online.wsj.com/article/SB121700939198285307.html
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Originally posted by Panache1976:
Great article on investment vs speculation on WSJ. Key points:
1. If the banks themselves cannot value their own assets, what makes you, an outsider, think you can?
2. If you cannot value a company's assets, you cannot do a thorough analysis.
3. Without thorough analysis, you are speculating, not investing.
4. Hence, Temasek and GIC are speculating with SG reserves...
http://online.wsj.com/article/SB121700939198285307.html
Yes they are gambling with Singapore's reserves and making huge gambling losses.
What is most annoying are the traitors of the nation that continues to support the gamblers even in the face of the mounting losses.
There are always traitors (you can see who in this thread) supporting despots for a bit of goodies - whether Myanmar, Zimbabwe, North Korea or Singapore....
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There is also the question of when is enough for the greedy despots. How much more money are they going to grab from Singaporeans to put into coffers they control, depriving the private sector of resources for growing into Sony, and Samsungs?
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What good investment strategy they have right here. Throw money recklessly into foreign investment, then claim that they're into long term investment when losses are being made..
How's this for an investment strategy. Give me 100 billion and i'd throw 10 billion into 10 random companies respectively. If losses are made, i'd just claim it to be a long term investment. Nevermind 10 years, 20 years or 50 years. So as long as the company don't go bankrupt, i'd just hold on to it. If gains are being made on the investment, of course full credit goes to me. On the other hand, if (unfortunately) the company goes bankrutp, hey can't really blame me right? No one is perfect anyway.
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Temasek's investment in Austtralia is more 'promising'...the losses are not so massive...kekekeke