FT reports Temasek Losses
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Originally posted by ShitSandwich:
Summary :
FT reports Temasek has 40% of it's portfolio in Financials. Considering that financials has dropped up to 90% in certain cases, Temasek is probably sitting on massive losses that if disclosed to the general public would cause an outrage. Even on the "astute" Merrill's investment with anti-dilution clauses that compensates Temasek for losses in equity stake, Temasek is set to lose 2 billion on the Merrill's trade out of 5 billion invested last year. The investments in financials probably equates to a 30% loss of the entire portfolio of Temasek, and considering that the other 60% portfolio of real estate, equities etc.. which would have lost 30-40% on average (by conservative measures). Temasek probably lost 50-60% of it's total portfolio in the last year. So much for boasting about high annual returns of 6% in the last two decades. All was lost in a single year and the managers of Temasek still kept patting their backs and raking in huge salaries for the last 10 years. It will probably take another 10-15 years of 6-8% annual growth for Temasek to recover the losses in the last year. You can probably have monkeys trading and they probably could better these well paid investment officers.
The right thing for Temasek is to have some accountability and fire the high-paid executives who came up with this trade and assauge the public that failure is not acceptable in a government-linked organization which uses taxpayers money. World class sovereign fund?? I think not. Say goodbye to your CPF money, it's going to be locked up for a really really long time as the govt probably doesn't have enough to pay out everybody in the short term.
Here's the article :-Temasek’s Merrill losses could exceed $2bn
By Saskia Scholtes and Greg Farrell in New York
Published: January 7 2009 23:13 | Last updated: January 7 2009 23:13
Temasek, the Singapore state investment fund, is sitting on significant paper losses related to its stake in Merrill Lynch, the investment bank acquired by Bank of America last week.
The state agency’s unrealised losses could amount to more than $2bn, excluding any hedges, according to a Financial Times analysis based on publicly available filings.
EDITOR’S CHOICE
The loss is emblematic of the damage the financial crisis has wrought on sovereign wealth fund investments in the banking sector and helps explain why funds have been reluctant to commit further capital to banks.
Some 40 per cent of Temasek’s portfolio is in the financial sector, and it has suffered paper losses on other investments, including Barclays, Bank of China and China Construction Bank.
Temasek on Monday disclosed it had converted its 13.7 per cent stake in Merrill into BofA shares following the acquisition.
On December 31, the last day of trading before the deal closed, Temasek’s remaining stake in Merrill, for which it paid an average of $23 a share, had dropped to $12.10.
After ploughing $5bn into Merrill between December 2007 and February 2008, and with a further $900m commitment last summer, Temasek owns 189m BofA shares, according to Monday’s disclosure. At Wednesday’s opening price, they were worth $2.7bn.
However, Temasek appears to have sold more than 30m shares of Merrill stock in the first and third quarters of 2008, according to regulatory filings. Even if Temasek sold at the lowest possible prices in these periods, the sales would have generated a modest profit to defray some of Temasek’s unrealised loss.
Temasek declined to comment.
It could have been worse. Temasek’s initial investment allowed it to buy more than 104m shares at $48 per share.
But after Merrill was forced to raise further capital in July, the terms of Temasek’s original investment were reset. This effectively bought Temasek 151m new shares in Merrill for just under $6 per share, bringing the average price paid per Merrill share to a little over $23.
Temasek’s investment suffered again in September, as Merrill shares plunged on concerns about the US banking sector.
But any losses seemed to vanish when BofA agreed to buy Merrill in an all-stock deal which valued the latter at $29 a share. BofA’s shares have since slumped, however.
Additional reporting by John Burton in Singapore
Copyright The Financial Times Limited 2009
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Originally posted by lionnoisy:
Why dunt FT field a story the success of Temasek in the past few decades?
The return is on par ,if not better,than major global index!!
http://www.temasekholdings.com.sg/temasekreview/2008/index.html
17 to 19 %
Compound Annual Growth Rate (CAGR) for 34 years is not bad!!
The only way not to lose $$ is put the money inside the vault!!
Portfolio Value since Inception
Total Shareholder Return
You mean the profiteering from Singaporeans? ...we are talking about the hundred billion losses to foreigners....
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Ho Ching manage Temasek Holding losing money again?Whats new?
So,when is the PAP government going to raise the GST,public transport fares or electricity bills again to cover up Ho Ching's ass?Huh?
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when Ho Ching took over, what was the fund volume? If you took over when the asset was $1 which then jumped up to $1.50, then comes back down to $1, what would be your conclusion regarding the investment performance?
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when Ho Ching took over, what was the fund volume? If you took over when the asset was $1 which then jumped up to $1.50, then comes back down to $1, what would be your conclusion regarding the investment performance?
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Why do you guys get married to your positions ? Do you guys go into a long term trades but stare at prices every minute to give yourselves a heart attack ?
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Why do you guys get married to your positions ? Do you guys go into a long term trades but stare at prices every minute to give yourselves a heart attack ?
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If "long term trade" can be used as an excuse, even a gorilla can be a paid tens of millions to trade. The price goes up, "brilliant" ape. If price goes down "long term trade" ... (quote from fellow sgforumner)
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When they bought it, they said it was for the long term. I would suppose so as well. Not that they are brilliant.......
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wa, long time nebber hear Ho C news already.
is she working in GLC still?