atans1

Our SWFs owned four out the10 biggest investment flops of the last 10 yrs

In Financial competency, GIC, Temasek on 26/02/2012 at 6:35 am

(Or “GIC may have bot another dog”

They owned significant stakes of the four (BoA, Citigroup, UBS and Barclays) of the 10 biggest dogs that had fleas on their fleas between 2002 and 2012. To be fair, the big stakes were bought in late 2007 or early 2008. GIC and Temasek each has two dogs to their shame. GIC still owns stakes in UBS and Citigroup. Temasek cut its losses at the nadir of the financial crisis of 2007-2009, in early 2009, allowing hedgies and Arabs to make money on BoA and Barclays.

http://www.economist.com/blogs/graphicdetail/2012/02/daily-chart-8

(Remember how the constructive, nation-building local media were trumpeting the purchases as indication that our SWFs were “the greatest”. Well they were “the greatest”: the greatest mugs. Funny our media never told us that.)

Hope GIC’s big stakes in Glencore and Bunge (both commodities traders, the former in metals, the latter in agricultural products) don’t go the way of UBS and Citigroup (big banks).

GIC now has over 5% of Bunge.

Via shares and convertible bonds that convert into Glencore shares, it also has a significant stake in Glencore. GIC has been doing some financial engineering to reduce its cost of Glencore shares, which I assume it bot at the IPO. The price has fallen 18% since then. As to its convertible bonds, it is getting a good interest rate of 5% but the equity value of the bond is 17% down, I calculated.

GIC recently raised its stake in Xstrata by 20%  and trimmed its holding in Glencore International after the companies said they planned to combine. GIC has increased its Xstrata stake to 29.05 million shares from 24.1 million shares since Feb 8, the day after Glencore offered to acquire the shares in Xstrata it doesn’t already own for US$37.6 billion, data compiled by Bloomberg show. GIC cut its Glencore stake by 21% t to 33.2 million shares.

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  1. Singapore urgently needs transparency and accountability! Can you imagine having no clue about your retirement savings performance? Forget about the CPF statements, if GIC and Temasek fail, the CPF savings are as good as the paper they are printed on.

  2. GIC and TH stakes in commodities-related entities will experience 50%-70% drawdowns and booms over the next 5 years. As long as PAPies balls don’t drop and they don’t sell, then ok. As for CPF they will manage like pension funds and insurance funds — managed to maturity to ensure sufficient liquidity for payouts. But CPF better, coz they can manage the maturity itself. Just increase minimum sum, increase the drawdown age, and stop payment for CPF Life as needed will ensure CPF will always be solvent. You can never be bankrupt or default if legally you can withhold payment or payback for as long as you like or keep changing the maturity dates and maturity amounts. No need to talk to IIF or IMF or G20. That’s why Golden Age ahead.

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