Europe: Temasek has competition

(Updated on 5 July 2012 : forgot to mention ex-UBSer appt)

Sometime back, the new CIO said that Temasek is looking for investment opportunities in Europe.  He said turmoil in Europe may result in a market slump rivaling the 2008 global financial crisis creating opportunities for Temasek to make deals. Earlier this year, Temasek hired former UBS Chief Financial Officer John Cryan to oversee its strategy for Europe, whereit has limited exposure. The hiring of Cryan had raised speculation that Temasek is eyeing distressed assets in the euro zone, shumething that the CIO has confirmed.

It had better hurry.

The total value of mergers and acquisitions in Europe by foreign companies has reached US$101 billion, well ahead of the combined US$73 billion spent in the United States by international acquirers, according to the data provider Dealogic http://dealbook.nytimes.com/2012/06/20/amid-debt-crisis-overseas-buyers-seek-european-companies/?nl=business&emc=edit_dlbkam_20120621.

The Chinese even have a fund to co-invest with Chinese cos wanting to buy European coms for their technology or brands. Not juz but investment returns or financial egineering, unlike Temasek. Maybe our leaders should “sit down and shut up” when it comes to advising China to follow them? And observe what the Chinese are doing?

Hopefully, Temasek will remember that it bot Barclays and Merrill Lynch, and GIC bot UBS and Citi a bit too early in the 2008 cycle, to be precise in 2007. Temasek sold its dogs in 2009, juz went markets were recovering, losing billions. Given the losses, Temasek will hopefully be more cautious, even if it means losing some great bargains. Catching a falling knife will not amuse S’poreans, the “owners of Temasek” (Ho Ching once called us).

As to why it needs to do deals: investment returns are likely to have without some good deal http://www.businessweek.com/news/2012-06-21/temasek-expects-smaller-returns-amid-difficult-years-curl-says.

Related post: http://atans1.wordpress.com/2012/02/26/our-swfs-owned-four-out-the10-biggest-investment-flops-of-the-last-10-yrs/

Antidote to Mark Mobius’ optimism on Europe etc

For the last two years, Mr. Grant, a managing director based in Florida at a regional investment bank, has been predicting the bankruptcy of Greece and a cascade of chaos across the global economy, attracting quite a following on Wall Street in the process.

“Greece will be forced to return to the drachma and devalue, and the default will cause bank runs and money flowing into Germany and the United States as the only viable safe haven bets,” he declared the day before Sunday’s Greek elections, irrespective of which party would win. “Greece will default because there is no other choice regardless of anyone’s politics.” http://dealbook.nytimes.com/2012/06/18/one-wall-street-seer-says-the-greek-tragedy-is-near/?src=dlbksb.

This recession will hurt emerging markets (Mark Mobius is bullish on them especially Vietnam, a great favourite). And our nation-building constructive media are full of doom and gloom for S’pore if the Eurozone breaks up. Err whatever happened to the scolding that a PAP apologist, Kishore Mahbubani, gave the Lady for visiting Europe implying that she should have visited Asian countries first (he forget she visited Thailand). Well Asia may be rising but Europe is still very, very important. Anyway, he should realise that there is such a thing as gratitude, despite this, “Gratitude is a disease of dogs that is not transmittable to humans”. It was said by a French investment banker after he was ousted from chairmanship of Italian insurer with which he was associated for over 40 years.

Without European support of her cause, she would most likely be dead now. Asian countries didn’t care about her or her cause.

See who’s bullish on Europe

Emerging market guru and value investor Mark Mobius thinks Europe will emerge from its debt crisis intact and stronger than ever.

http://www.cnbc.com/id/47870358?__source=ft&par=ft

He believes emerging markets offer the best opportunities for investors. “The average growth this year will be five percent, compared to less than one percent in developed countries. They represent 34 percent of the world’s market capitalization and most people have very little, if anything, in emerging markets”.

His favorite developing economies are Vietnam and Nigeria