atans1

Posts Tagged ‘SingTel’

HPL: More than “fair and reasonable”?

In Corporate governance, Financial competency, Property on 09/06/2014 at 4:38 am

The second revised buyout offer for Hotel Properties Limited (HPL) is considered to be “fair and reasonable” by the independent financial adviser to HPL. 68 Holdings, a consortium led by tycoon Ong Beng Seng and Wheelock Properties, had raised its bid a second time to $4.05 per share last month.

CIMB’s opinion on the offer is unchanged from its earlier report issued after the consortium first raised its offer price from $3.50 a share to $4. The updated report by CIMB was released in a supplementary letter to shareholders by HPL’s board of directors yesterday.

On the second revised offer of $4.05 a share, CIMB’s recommendations to HPL shareholders are also unchanged. (BT last Fri)

Given that the first offer was already “fair and reasonable”, shouldn’t this be an offer that is “more than fair and reasonable”?

Or the first one should have been “neither fair nor reasonable”? It was a low ball bid?

In 2002, the independent adviser to the board of Optus had come out with the opinion that far from paying too much, the offer is actually “unfair”.Independent adviser, Grant Samuel said the SingTel offer was “unfair”, but recommended the offer and says “while it is not fair, it is reasonable”. As a result, the directors of Optus recommended the deal to shareholders.

The M&A boutique said the deal was unfair based on valuation techniques, but said it was  reasonable because if there wasn’t an offer, Optus’ share price would be trading at lower levels: “In assessing the fairness of the offer, Grant Samuel indicates that its judgement of fairness is at the margin, and that while the Singtel offer is not fair, it’s only just not fair.”

Well, many S’poreans tot, at the time, that that the price paid was unfair and unreasonable to SingTel investors (self included0). Turns out we are right even today, it seem. If it wants to float Optus today, there would be a small gap of a bn or so A$ between its purchase p-rice and valuation of Optus today: small change leh.

Coming back to the HPL offer, CNA reported last week in relation to another takeover offer, “Minority shareholders are becoming increasingly disillusioned with boilerplate advice from independent financial advisers (IFAs) and are questioning their usefulness, the head of the Securities Investors Association of Singapore (SIAS) said on Friday (June 6).”*

To which the retort from bidders and IFAs would be, “They would say that wouldn’t they? They want unfair and unreasonable prices to be paid for their shares.”

*Cont’d

The remarks by SIAS President & CEO David Gerald came in a statement noting the dissatisfaction on the part of minority shareholders over a buyout offer for LCD Global, a hospitality and investment company, at S$0.17 a share.

“SIAS notes that while the IFA report has indicated that the offer is fair, based on a historical perspective, the offer does represent a discount to NAV at S$0.27,” …

 

Temasek’s Asean tales

In Temasek, Vietnam on 22/02/2014 at 4:23 am

This week’s Asean’s round-up is all about Temasek or its TLCs.

Singapore state investor Temasek Holdings Pvt Ltd TEM.UL is seeking to sell its $3.1 billion stake in Thai telecom company Shin Corp INTUCH.BK, according to people familiar with the matter, and has approached its SingTel (STEL.SI) unit as a possible buyer. But the troubles in Thailand have put an end to the talks.

TRE and TOC readers will be banging their balls when they learn: The Temasek stake in Shin Corp, founded by former Thailand prime minister Thaksin Shinawatra, is worth $3.1 billion by current market value.

Shin Corp’s shares now trade more than 50 percent above the price paid in 2006 by a Temasek-led consortium, that included Chinese-Thai businessman Surin Upatkoon, when it bought 96 percent of the Thai firm for a total of $3.8 billion.

As for SingTel:

“At a fair price such a deal would make sense for SingTel,” Chris Lane, senior analyst at Sanford C. Bernstein in Hong Kong who covers Asia-Pacific telecommunications. SingTel is 52 percent-owned by Temasek.

Shin Corp owns 40.5 percent of Thailand’s biggest mobile telecoms company, Advanced Info Service Pcl ADVANC.BK. SingTel already has a 23 percent stake in AIS: Adding the Shin Corp stake would cement its position in a bigger market and offset sluggish growth in mature economies where it’s also present, like Australia.

“SingTel executives are involved in the day-to-day operations of the company AIS,” said Bernstein analyst Lane. “Buying the stake from Temasek avoids the possibility of another ‘telco’ securing a significant interest in AIS.”

http://www.reuters.com/article/2014/02/18/us-temasek-shincorp-singtel-idUSBREA1G1H520140218

FPT Corp, Vietnam’s largest publicly traded telecommunications and software company, has asked Temasek to help it identify a Singapore technology company for acquisition to boost sales overseas, the Bloomberg news agency reported.

FPT will spend as much as US$20 million (S$25 million) on a Singapore acquisition, Chief Executive Officer Bui Quang Ngoc said in an interview on Wednesday. The company, which had sales of 28.6 trillion dong (S$1.7 billion) in 2013, seeks to more than triple revenue from overseas to US$400 million by the end of 2016, co-founder Mr Ngoc, who took charge in July, said in Hanoi. “Singapore is a very attractive market,” Mr Ngoc said. “If we can be successful in Singapore, it means we have enough experience to do it in other countries.”

FPT is looking to acquire a Singapore company that specialises in software services such as inventory management, order processing and employee payroll, said Mr Duong Dung Trieu, chief executive officer of FPT Information System, a unit that contributes 25 per cent of the parent’s pretax profit.

The company plans to make the acquisition in Singapore “as soon as possible,” Mr Ngoc said. Temasek holds less than 5 per cent stake in FPT, according to the Vietnamese company.

Finally airport services and catering firm SATS (a listed TLC) agreed to buy a 41.65 per cent stake in Indonesian aviation and food service provider Cardig Aero Services for 1.1 trillion rupiah (S$118 million) to grow its business in South-east Asia’s largest economy.

Indonesia is a priority market said SATS. The country’s topography and a fast-growing economy and middle-class population will continue to drive greater demand for high-quality food and travel, it said. “CAS is an attractive investment opportunity in our core business which will generate sustainable value for our customers, employees and shareholders as Indonesia continues to grow,” said Mr Alexander Hungate, President and Chief Executive Officer of SATS.

And he’s right about Indonesia: http://www.economist.com/news/finance-and-economics/21596989-how-worlds-fourth-most-populous-country-weathering-emerging-market

EPL vote buying?

In Footie, Political governance, Public Administration on 28/01/2014 at 5:53 am

(Or How PAP is connecting with S’poreans without the anti-PAP paper warriors noticing)

Football fans on Saturday evening indulged in free screenings of the Barclays Premier League match between Chelsea and Hull City at community clubs across Singapore.

At Yio Chu Kang Community Club, some 20 fans turned up at the beginning of the match at 8.45pm.

More spectators gradually streamed in as the match progressed.

It seemed residents simply relished the chance to catch the game without having to pay anything.

One of the spectators said: “It’s because of the ridiculously expensive prices that one has to pay to watch English football these days and I also have a bit of time to kill.”

The screening of the match was opportunity to build communal bonds through the platform of shared spectatorship.(CNA three/ Sundays ago)

Err more like trying to tell people that find it expensive to subscribe to SingTel’s EPL package that the PA PAP are making sure that the high cost of watching EPL is mitigated, and come GE2015/2016, vote PAP.

All those TRE and TOC reaaders, and other anti-PAP paper activists be frustrated, very frustrated. Soon, the clubs will be showing games when United, Sity, Gooners and Chelsea play one another, not juz uninteresting games.

But if not for me, our intellectual paper warriors would be clueless on this PAP move (has anyone blogged or commented on this piece of news?. The said kay pohs (and their readership in TRE, TOC) don’t watch footie, and are still fighting GE 2011. Guys, the PAP is moving on for GE 2015.

The new approach is to show voters the PAP cares: even in WP areas http://news.asiaone.com/news/singapore/pa-reaches-out-wp-wards-17-projects.

Wonder if SingTel will allow the WP town council to screen such matches too, or only restricted to PAP PA venues? Sadly WP MPs won’t even bother asking: too busy looking at their bank statements. They too wear white.

But all is not lost. The usual tua kee blogging suspects should remind S’poreans that watching EPL is expensibe ’cause

– two TLCs (SingTel and StarHub) out into a bidding war for the EPL rights;

– the PAP’s govt competition rules made this possible, may inevitable. Tot competition riles were to keep prices down?

Govt faciliates spying and tax avoidance, but bans Ashley Madison: Uniquely PAP

In Economy, India, Indonesia, Malaysia, Political governance, Telecoms on 27/11/2013 at 5:05 am

In the space of a few days, the govt is facing or is likely to face uncomfortable questions from other govts about its activities: activities that the usual suspects, could reasonably argue, show the two-timing nature of the PAP govt that they (they the usual suspects) detest and wish it all the ill-will in the world.

Malaysia said it will summon Singapore’s high commissioner today to respond to allegations of spying which risk damaging improved political and business ties between the Southeast Asian neighbors.

Indonesia and Malaysia have been key targets for Australian and U.S. intelligence cooperation since the 1970s, facilitated in part by Singapore, the Sydney Morning Herald reported yesterday, citing documents leaked by former U.S. intelligence contractor Edward Snowden. Malaysia’s foreign ministry said it was “extremely concerned” and had already acted against earlier claims of espionage by the U.S. and Australia.

The reports could also spur friction between Singapore and Indonesia, Tan said. “The Indonesians would probably be concerned whether the information is also being shared with Singapore intelligence, besides the Australians*.”

(http://www.bloomberg.com/news/2013-11-26/malaysia-summons-singapore-commissioner-as-spying-claims-widen.html)

As SingTel was singled out for mention by the Oz newspaper**, and as it has extensive mobile operations in Indonesia and Thailand, and a major stake in a major Indian telco, it could face problems in these countries.

Then there is the issue of how European and US cos are using S’pore to avoid taxes, at a time when there is growing resentment among politicians and voters that these cos are not paying their fair share of taxes. The Indian, Japanese, Taiwanese and Korean govts will also not be too happy too with S’pore’s corporate tax-regime if they read the Economist.

“Taxing times for Singapore as corporate strategy faces scrutiny” was a Reuters headline on 24 November 2013 (BT and Today carried the report too). It gave details of how Apple used S’pore as a tax-saving centre and went on, “Companies justify booking significant amounts of revenue and profits in Singapore by the fact they often run key business functions such as finance and operations, hold intellectual property rights there or base regional executives in the city.”

The chart below (via the Economist) shows a hypothetical scenario where a company moves its headquarters from Singapore (a very low-tax economy) to another country. http://www.economist.com/blogs/schumpeter/2013/11/corporate-tax-rates

S’pore very cheap place (tax wise) esp compared to Japan. Minister Zorro must be happy: juz as happy as looking as his monthly CPF statement.

The Reuters article went on: Singapore has so far largely stayed out of the debate raging in Europe and the United States about the ways multinationals try to lower their tax bills.

But revenue-hungry governments are looking to impose tougher rules on so-called transfer pricing that could make it harder for firms to trade goods, services or assets between their Singapore and overseas entities.

As a result, accountants warn that the city-state will need to review the level of transparency in its tax incentive schemes and get stronger justifications from companies on their transfer pricing arrangements to fend off challenges from other jurisdictions.

“Singapore’s challenge is to ensure that it stands ready to adequately address any kind of unilateral tax action taken by other countries,” said Abhijit Ghosh, a partner at PricewaterhouseCoopers in Singapore.

“In this brave new world of fiscal competition for the tax dollar, dispute resolution will be on the increase and Singapore will need to focus more resources on enforcing and defending its principles of value creation in international forums.”

The city-state’s government says it is against artificially contrived arrangements constructed “solely for the purpose of flouting or exploiting loopholes in tax rules”, according to a spokeswoman from the Ministry of Finance.

However Singapore is also arguing that it should not be singled out because it has low tax rates.

“We must guard against new forms of protectionism masquerading as tax harmonisation,” the spokeswoman said. “We should avoid converging on high taxes globally as this would only hurt growth and jobs.”

Looks like the owl that visited PM was a harbinger of bad news for PM.

Seriously, the “usual suspects” could reasonably argue, if they tot about it, that the “chickens are coming to roost”.and that while moralising on adultery, the PAP govt helps the ang mohs spy on our neighbours, while helping ang moh and other Asian cos avoid tax. And PritamS wants the WP to be in coalition with the PAP?

*Remember that Indonesia suspended military co-operation with Australia, after allegations emerged of Australian spies bugging the phones of the president and his inner circle.

**Access to this major international telecommunications channel***, facilitated by Singapore’s government-owned operator SingTel, has been a key element in an expansion of Australian-Singaporean intelligence and defence ties over the past 15 years.Read more: http://www.smh.com.au/technology/technology-news/new-snowden-leaks-reveal-us-australias-asian-allies-20131124-2y3mh.html#ixzz2lkSC0P8c

***SEA-ME-WE-3 cable as well as the SEA-ME-WE-4 cable that runs from Singapore to the south of France.

Govt’s reaction to rising food prices?

In Indonesia on 02/11/2013 at 5:27 am

On 24 October, it was reported that

Singapore has lifted a ban on the import of Thai frozen chicken and is also considering allowing the sale of frozen pork from Thailand.
After banning Thai poultry from its market for nine years, Singapore has finally allowed frozen chicken from Thailand back in, reports The Nation of Thailand.

http://www.thepoultrysite.com/poultrynews/30426/singapore-lifts-ban-on-thai-chicken-imports October 24th via http://singaporenewsalternative.blogspot

Timing of ban lighting, not coincidental, methinks

On 29th October, it was reported: Inflation in Singapore will pick up over the next few quarters before tapering towards the end of 2014.

This is according to the Monetary Authority of Singapore’s (MAS) Macroeconomic Review.

The central bank said domestic food inflation is expected to rise from around 2 per cent in 2013 to close to 3 per cent in 2014, although this is still lower than the 3.4 per cent average over the last five years.

In particular, cooked food vendors are likely to pass on the increases in labour and rental costs to consumers, as these account for a significant share of their operating expenses compared to non-cooked food establishments.

The MAS said cooked food is estimated to make up 14 per cent of average household expenditure.

http://www.channelnewsasia.com/news/singapore/inflation-in-s-pore-to/865788.html

Today reported: The MAS expects the core inflation rate, which strips out the cost of accommodation and private road transport, to increase from between 1.5 and 2 per cent this year to between 2 and 3 per cent next year.

Better than these non-actions:

http://atans1.wordpress.com/2012/09/03/err-lee-what-did-you-say-abt-food-inflation/

http://atans1.wordpress.com/2012/08/13/inflation-why-the-misleading-picture-minister-media/

http://atans1.wordpress.com/2012/05/25/will-hougang-make-the-pap-moan-the-inflation-blues-not-joke-abt-it/

In other Asean round-up news:

Burma is getting its first online music store, which aims to stamp out the problem of illegal downloads, according to the Eleven Myanmar news site. “The traditional distribution system has been plagued by piracy,” the man behind the website, Ko Ko Lwin, is quoted as saying. His Myanmar Music Store apparently trialled operations for a week ahead of an official launch, with home-grown star Lay Phyu’s record, Diary, selling 4,000 copies.

http://www.bbc.co.uk/news/blogs-news-from-elsewhere-24743082

SingTel may still get into Burma. While it failed to get one of the two licences granted this yr, the govt has asked leading telecos (including SingTel) to offer help to the govt-owned operator as it upgrades.

Workers across Indonesia begun a two-day strike on 31 October demanding higher salaries, the latest industrial action to hit the South East Asian economy.

The workers say their cost of living has gone up amid rising inflation and a hike in fuel prices.

http://www.bbc.co.uk/news/business-24753469

Thailand‘s lower house of parliament has passed a political amnesty bill that critics say could allow the return of former PM Thaksin Shinawatra.

The amnesty applies to offences committed during the political turmoil after Mr Thaksin was ousted in a coup.

The lower house passed the controversial bill in the early hours of Friday. It now goes to the Senate.

The opposition Democrat Party has warned that the passage of the bill will trigger street protests.

http://www.bbc.co.uk/news/world-asia-24768110

SingTel affected by rupiah, rupee collapse

In China, India, Indonesia, Malaysia, Telecoms, Vietnam on 31/08/2013 at 5:08 am

In its latest set of results announced a few weeks ago, the profit contribution from regional associates climbed 14% to S$552 million in the quarter on higher results from Indonesia, Thailand and India, the company said.

SingTel gets 12% of its profit before tax from India and 22% from Indonesia, with those earnings in future likely to take a hit when translated back into Singapore dollars. Remember too the weakish A$, Baht, and Filipino peso will affect its earnings.

Other Asean round-up news

At an emergency meeting on Aug. 29, the monetary authority raised its benchmark and overnight deposit rates. It’s a decision Bank Indonesia should have made at its last official gathering less than two weeks ago. An obsession with economic growth stayed its hand. http://blogs.reuters.com/breakingviews/2013/08/29/currency-markets-rude-wakeup-call-stirs-indonesia/

Politics is back on the streets in Thailand, after a relative lull of more than two years, with a protest over the weekend. It underlines the persistence of divisions in Thailand and raises the prospect of a return to the political turmoil that left more than 90 people dead in Bangkok in 2010.

Thousands of demonstrators gathered in a vacant lot in Bangkok on Saturday, as speakers threatened to “overthrow” the government.

But unlike in previous years, this time the protesters were members of Thailand’s oldest political party, the Democrat Party, which has long had a reputation as the staid, well-mannered and intellectual voice of the Bangkok establishment and has been firmly dedicated to resolving differences inside Parliament, where the Democrats lead the opposition.

The acrimony between the Democrats and the government of Prime Minister Yingluck Shinawatra centres on a number of legislative issues, chiefly an effort by the government to pass an amnesty law for those involved in the 2010 protests.

The Democrats oppose the Bill, saying it might also apply to those who insulted the monarchy or committed serious crimes.

But the broader conflict appears to stem from their feeling of powerlessness in the face of the resurgence of Thaksin Shinawatra, Ms Yingluck’s brother, who sets the broad policy lines for the government and the Pheu Thai Party despite living abroad since 2008 in self-imposed exile to escape corruption charges.

The weekend protests followed another peaceful one earlier this month involving some 2,500 supporters of the Democrat Party and royalist groups at Bangkok’s Lumpini Park, throwing fresh light on Thaksin’s divisive influence in Thailand.

(Extract from NYT)

Malaysia‘s government is exploring the possibility of hiking the real property gains tax to rein in rising housing prices and curb speculation in the market. Bernama quoted Housing Minister Abdul Rahman Dahlan as saying that current property tax levels had failed to stabilise house prices with the house price index continuing to rise.

Malaysia’s GST will take 14 months to implement if announced in the budget in October, a ministry official said

The Philippines posted better-than-forecast economic growth, fuelled by its services sector and higher consumer and government spending. Its economy grew 7.5% in the April to June quarter, from a year earlier. It is the fourth quarter in a row its economy has expanded by more than 7% – defying a regional trend which has seen growth slow down in many countries. The Philippines’ 7.5% second-quarter growth matched that of China but is higher than Indonesia, Vietnam or Malaysia,

However, the country has been hurt in recent weeks by investors pulling out of the region’s emerging economies. This despite under emerging mkts, given the follow of remittances from workers overseas, it will not have to worry about investors’ outflows unlike other mkts.

Japan’s All Nippon Airways has said it will acquire a 49% stake in Asian Wings Airways, an airline based in Burma..

The Japanese airline will pay 2.5bn yen (US$25m) for the stake.mIt is the first time a foreign carrier has invested in a Burmese-based commercial airline. It currently operates domestic flights to all major tourist destinations in Myanmar.It t plans to “extend its wings to regional destinations through scheduled flights as well as chartered ones”.

Asean round-up

In Banks, Telecoms, Temasek, Vietnam on 02/02/2013 at 7:08 am

In Vietnam, the government’s planned sale of a 20% in Sabeco, a brewery,  is expected this year, according to bankers.

Wilmar, one of Asia’s largest agribusinesses, and Cargill, the commodities’ trader are setting up in Burma.

18 companies, including Malaysia’s Axiata, Norway’s Telenor Group, parent of the Thai mobile operator DTAC, Digicel, the Caribbean based operator, and two Singaporean companies, Singapore Telecommunications, one of southeast Asia’s biggest telephone companies, and ST Telemedia, a unit of Temasek Holdings, have submitted proposals for the two telecoms licences

The Burma has abolished a 25-year-old ban on public gatherings of more than five people: more liberal than S’pore.

Malayan Banking Bhd (Maybank) has made a US$100 million capital injection into its Philippines operations.The banking group, the fourth largest in the region, on the previous Friday launched a new corporate head office in Manila and announced plans to double its number of branches in that country to 100 by 2014, and thereafter to 200 by 2018, Malaysia’s Business Times said.

It currently has 54 branches there, with another expected to open in the city of Davao by the end of this month.

Maybank Philippines Inc (MPI), which has been operating since 1997 and is now the 24th largest bank by assets, may eventually go for a listing there. The Philippine central bank had last year issued a directive, requiring banks controlled by their foreign counterparts to go for a listing on the Philippine Stock Exchange.

Why investors don’t like acquirers

In Uncategorized on 16/08/2010 at 6:35 am

The reason: most deals destroy value for acquirers. The evidence.

And think of DBS’s purchase of Dao Heng, and PosBank. And even Singtel’s purchase of Optus. A dirty secret that the public are not aware of is that value of Optus is less than what SingTel paid for it. http://atans1.wordpress.com/2010/01/15/singtel-lost-at-least-a2-billion-on-optus/

Footie fans get screwed: SingTel mgrs rake in millions

In Telecoms on 30/06/2010 at 7:54 am

Can’t blame me from being cynical can you?

At least, they are locals. The only FT runs Oz ops.

Not unlike DBS, where FTs run amok.

Joint footie bid: Dog that didn’t bark?

In Media, Telecoms on 11/05/2010 at 10:01 am

Kinda strange that the authorities here have outsourced to FIFA and its commercial agent S’pore’s competition law when it comes to the media . How come the StarHub and SingTel joint bid was allowed by the competition authority? Or is it the anti-competition authority?

Although SingTel and StarHub were planning for a joint bid, Fifa eventually awarded them individual non-exclusive broadcast rights instead, the telcos revealed.

Joint bids are frowned upon as it could set a precedence for other broadcasters to follow suit and thin the coffers from media licensing.

(Part of BT report)

Update

Was told by two eminent persons, one lawyer and another an economist, that many sectors or industries are exempted from the competition laws. They have unprintable views on these exemptions.

Media is exempted from the act, and comes under the purview of Media Development Authority. A third person, not so eminent, in fact downright obscure and usually unreliable, tells me that MDA does not do anti-competition. Witness  its refusal to step in when StarHub had EPL exclusively. Only the row over the price SingTel paid, got it thinking how to have proper competition policies.


Great excuse for telco to buy bank stake

In China, Investments, Telecoms, Temasek on 10/04/2010 at 5:07 am

Some time back, China Mobile agreed to buy 20%  of Shanghai Pudong Development Bank for 39.8 billion renminbi (US$5.8 billion) to expand its electronic payment business.

The reason for the telco to buy such a big stake in a bank:  China Mobile and Pudong Bank will form a strategic alliance to offer wireless finance services including mobile bank cards and payment services, according to a statement  filed with the HKSx.

Wonder if  the corporate communications departments of TLCs, M1, SingTel and Starhub have filed away this excuse. Their company might need to adapt it if it ever has to buy a stake in a bank in the Temasek stable.

Why?

In late March according to a Reuters report, Bank of China, China’s fourth largest bank, said it was in talks with Temasek, to set up a rural business bank in China. The bank under discussion would have 40-60 branches, President Li Lihui told reporters at a media briefing to discuss Bank of China’s 2009 results

Now wouldn’t such a bank need wireless expertise and don’t StarHub and SingTel love to do dumb things? Fooie fans still don’t know if we will get World Cup coverage.

SingTel: Gd new, bad news

In Telecoms, Temasek on 26/03/2010 at 5:15 am

“Bharti has tied up US$7.5bn of loans through Standard Chartered, Barclays and a roster of other international banks to fund its $10.7bn bid, which includes $1.7bn of Zain debt. The State Bank of India has also promised up to $1bn more to cover associated deal costs. At a reported interest rate of 2 percentage points over Libor, Bharti is being charged less than many investment grade companies would expect to pay”, FT reports.

So Bharti is on track in its purchase of  Zain. And SingTel will have exposure to Africa.

http://atans1.wordpress.com/2010/02/17/singtel-during-the-hols/

The bad news is that Thailand’s government will present a plan in two months to “create a level playing field” for telecom firms, including possible compensation for changes to concessions, said Prime Minister Abhisit Vejjajiva.

Prosecutors will also make a decision on whether to seek damages over royalty payments to state-run TOT from Advanced Info Service, Thailand’s biggest mobile phone company that was owned by  former PM  Thaksin Shinawatra via Shin.

But SingTel and Temasek will be comforted that the Finance Minister said: “Whether there will be retroactive pursuit of fees forgone by the government from the company is unlikely. I don’t feel that it would be fair to go after shareholders of these companies for adjustments in the concessions that were made by the previous owner.” Remember AIS is an associate of SingTel and Temask has a 79% economic interest in Shin that is AIS’s controlling shareholder.

http://atans1.wordpress.com/2010/03/14/singtel-collateral-damage-from-shin/

The concession of True Corp, Thailand’s third-biggest mobile operator, is set to expire in 2013. AIS’s expires in 2015 and Total Access’ in 2018. Each firm negotiated amendments to the original concessions, which the government’s legal advisory body said in 2007 failed to comply with the law.

Update

More bad news: SingTel’s and StarHub’s joint bid for World Cup footie has been rejected. Footie fans will know who to blame if SingTel doesn’t cough up more (don’t see why StarHub would). If it does, it will lose money. Peanuty amounts but still money.

Makes me ashamed to be from RI. The CEO is an RI gal. RI boys don’t do such dumb things, only RI gals.

SingTel: Local talent policy not working

In Uncategorized on 25/03/2010 at 1:15 pm

Err been receiving phone calls from irate footie fans telling me that SingTel shows that local talent can juz be as crappy as foreign talent.

They point out that SingTel’s EPL bid has resulted in them having two box-sets, paying two subs, and maybe no world cup footie.

And they point out that the CEO is from RI. Err I can only say I never liked the gals in RI policy. They lowered standards.

SingTel: Collateral damage from Shin?

In Telecoms, Temasek on 14/03/2010 at 5:51 am

Pro-Thaksin demonstrators  have reach Bangkok ahead of a  rally today (Sunday). The government has deployed about 40,000 security personnel. The Internal Security Act has also been invoked, giving the military extra powers to impose curfews and restrict numbers at gatherings.The last major protests, in April last year, turned violent, with two deaths and dozens of people injured.

This protest comes after the Supreme Court ruled that former PM Thaksin Shinawatra’s family should be stripped of more than half a contested US$2.3 billion. The court said US$1.4 billion of the assets were gained illegally through conflict of interest when Mr Thaksin was prime minister. The funds were frozen after Mr Thaksin’s elected government was overthrown in a military coup in 2006.

He, who is living abroad, has denied any wrongdoing.

The Economist reported two issues ago: “The court’s verdict exposes Mr Thaksin and his family to a range of civil and criminal charges. Prosecutors may go after members of his cabinet and officials accused of helping Shin Corp. The government can also try to claw back lost revenue from Shin Corp, and particularly its lucrative mobile-phone unit, AIS.”

Readers will be aware that SingTel has a 21.4%  stake in AIS.  No wonder Shin’s executive chairman and acting president Somprasong Boonyachai said to BT two weeks ago (juz after the court’s verdict) that Temasek could divest its stake in Shin Corp if the right buyer comes along.

Maybe Temasek is prepared to cut loss? It lost abt US$4.6 billion on Merrill Lynch so a loss of  around US$655 million (assuming that its interest in Shin is only 42%, and not the 79%  economic interest that some analysts have calculated) would be “Peanuts” as Mrs SM might have put it, though she did not.  I mean waz US$655 million when you dropped US$4.6 billion?

Time to call John Paulson? He is the hedgie who bot BoA (that bot ML) when Temasek was selling.

But on Friday that same Thai said Temasek had no plans to sell its stakes in Shin or in satellite unit Thaicom.  Either he is the Thai version of Gopalan Nair or Temasek has changed its mind in two weeks

Anyway, the repercussions  of the Shin deal go on and on http://atans1.wordpress.com/2010/03/06/better-at-destabilising-than-investing/

BTW a conspiracy theorist or one who practices the art of guessing what is going on behind the scenes: dietrologia in Italian, literally “behindologypoint”, has argued that the Shin purchase was a gd deal that went wrong because of the coup.

A Pakistani (you know how mad they can be) of my acquaintance has connected  the dots between these three indisputable facts

1 When Thaksin was PM he had proposed spending 1.7 trillion baht between 2006 and 2010 (then US$47 billion) on mass transit systems, water pipelines, communications technology and other projects to boost the economy and improve the country’s infrastructure.

2 TLCs have the expertise to do these projects.

3 Thaksin has been found by the Thai courts to be venal.

My mad Paki wonders aloud if someone might have tot of the billions of $ that TLCs could from the Thai government win if Shin was bot at a more than fair price? Note that the price was so fair to shareholders that brokers recommend that they sell to the consortium

I told him S’pore Inc. does not bribe: if we did we would be more successful than Taiwanese and Hongkies in China. He pointed out that S’poreans learn from their mistakes.

Update 15 March 4.30 am

Tens of thousands of Thai opposition supporters have rallied in Bangkok  and gave Prime Minister Abhisit Vejjajiva until Monday afternoon to call fresh polls. They vowed to demonstrate across the capital if he refuses to do so. The government insists it will not stand down and has tightened security.


SingTel: African indirect approach is best

In India, Telecoms, Temasek on 23/02/2010 at 5:19 am

I read a media report that some analysts were querying when it didn’t invest in Africa direct, rather than allow Bharti to buy Zain’s African assets.  My tot,” what weed are these analysts on?”

Well for starters, the Indian govt would not be impressed with SingTel, Temasek and the S’pre govt if SingTel used its32% in Bharti to flow Bhart’s African ambitions which have the Indian govt’s blessing. Remember India thinks it has to counteract China’s grow influence in Africa.

And Bharti wants Africa. It made two attempts to merge with MTN,Africa’s largest telco.

If SingTel tried to use its 32% stake in Bharti to kill Bharti’s African ambitions,  SingTel, Temasek and the S’pore govmin would be the losers, just like us footie fans because the EPL bid has caused FIFA to raise the price of World Cup footie for us.

Then also SingTel’s mgt expertise is in developed couuntries — Little Red Speck and the Lucky Country.  Its ventures in India, Indonesia, Thailand, the Philippines, and Bangladesh: countries which once in trlco terms are like Africa today are thru associates where mgt are in the hands of experienced local mgrs who are not SingTel employees.   Zain is selling out partly because it can’t make serious $ in Africa. Africa generated about 45% of group revenues in the first nine months of last year but only 10% of net profits. Its managerial experience like that of SingTel is in developed telco mkts.

And would straight-laced, conservative SingTel be able (or want to or would we want it) to deal with cowboys in chaos. Example:   The privatisation of Nitel, Nigeria’s former state telecoms monopoly, is in a mess.  The Nigerian government found itself arguing with some of the preferred bidders over whether they had, in fact, bid at all. China Unicom – named as part of the winning consortium – said “it had not started any negotiations with respect to any substantive and legally binding agreements. It said its unlisted parent had not had any direct discussions with parties to the proposed privatisations. It said the European arm had been “in contact with potential bidders” for Nitel but did not name them,” according to the FT. At first, Unicom said it knew nothing of the bid.

Nope better for SingTel to let Bharti do the work. With all its experience, its share price is 11% down since the annc. of the Zain deal.  Clearly there is some concern.

If we don’t get to see the World Cup, SingTel will have a massive PR crisis on its hands in its home mkt. It doesn’t need Africa to add to its woes.

SingTel: During the hols

In India, Temasek on 17/02/2010 at 5:19 am

After twice failing to merge with MTN, Bharti (32% owned by SingTel) has finally found a way into Africa: by buying the African assets of Zain.

At US$10.7bn in cash, this is not cheap. Zain’s African businesses are expected to earn US$1.3bn this year before interest, tax, depreciation and amortisation; Bharti has offered about eight times that. Vodafone paid a similar multiple for South Africa’s Vodacom.  Eight times EBITA seems to be the norm where telco services are underdeveloped but with potential:  Vivendi paid this multiple for a stake in a Brazilian telco last year.

Why buy? Africa is undeveloped and poor: Bharti knows how to run a low-cost, high-growth business.  More importantly, India’s biggest mobile phone operator needs a new driver for earnings: in India,  it has 11 competitors and price wars.

So why is Zain a seller? The usual reasons that allow a deal to be made

Some of Zain’s shareholders need the money.

The Kuwaiti company cannot make serious wagga in Africa. Africa generated about 45% of group revenues in the first nine months of last year but only 10% of net profits.

Bharti’s shareholders are nervous, with prices falling 9% on Monday, afraid that despite its experience in India, Bharti will fail in Africa.

But for SingTel, it will have via Bharti a presence in Africa: a place with potential for explosive growth.

SingTel: Did you know?

In Investments, Temasek on 26/01/2010 at 5:53 am

SingTel is in the news because of reports that its successful bid for EPL rights made FIFA up the price for the World Cup rights for S’pore.  Great screw-up: sabo Starhub, end up saboing S’poreans?

But S’poreans might want to know (not reported in MSM) that its 32% owned associate in India has just issued a set of bad results. Dominant operator Bharti Airtel announced a 2% (‘peanuts’ Mrs Goh Chok Tong would say) year-on-year increase in earnings in the fourth quarter.  Bharti’s average revenue per user dropped 30% over the past year to US$7 per month.

Twelve companies all with big ambitions and plenty of cash are fighting a price war. Worse more players are coming.

So while the value of its Indian investment is in peril, it is focusing in S’pore on the entertainment biz.  No wonder it is trying to sell a 25% stake in Optus at a highish valuation. It got to look gd somewhere.

Preview of what to expect

In Uncategorized on 14/11/2009 at 9:38 am

For a preview of what I will be writing about below are some pieces I did in mid June for two weeks for a project that did not take off. They are in chronological order.

Winning whatever the price of oil

Last week, it was announced that PetroChina (subject to Chinese regulatory approvals) would buy from Keppel its entire stake of 46% in SPC for S$6.25 a share.

Immediately one thought of 2003, when Keppel sold a 28% in SPC to Hong Kong-based (but Indonesian owned) Kapital Asia for S$1.50 a share, and said it was considering divesting its entire stake.

In 2004 the price of oil took off and Keppel decided to keep the refiner to expand its oil and gas production in SE Asia. Could Keppel be repeating its mistake of selling SPC shares, just before the oil market takes off? It could.

But Keppel shareholders (especially Temsek) should not complain. In the announcement of the deal, it was said “PetroChina and Keppel also plan to explore opportunities in the offshore oil industry and in other areas of mutual benefit as such opportunities become available”.

Things like this are usually to be ignored as fluff. Maybe not in this case.

PetroChina is one of China Inc’s two flagship oil companies, tasked with developing oil and gas resources globally to meet China’s energy needs. The Chinese have been active recently making oil-for-loan deals with national oil companies of Brazil, Russia and Kazakhstan, all very good for the likes of PetroChina.

Keppel’s off-shore rig business, is only one of two world-class companies in Singapore Inc’s local portfolio. Should the value of SPC explode upwards, then Keppel has, at the very least, the goodwill of PetroChina when it bids to build rigs for projects where PetroChina has an interest.

And should the price of oil collapse, Keppel and its shareholders will have S$1.47 billion in the bank to fund the rig business.

And if anyone thinks that it is a no-brainer to buy SPC because PetroChina said it could serve as a platform for future transactions, suggesting it might try to use SPC to make takeovers that it would be blocked from making directly — think again.

There would still be concerns of takeovers by Chinese state-run firms, done directly or indirectly, through a Singaporean subsidiary.

Managers turn swashbucklers? Can pigs fly?

Short of plans to buy assets, NOL does not need the S$1.4b. NOL, which has S$400m in cash reserves, would have almost less than 2% net debt. (45% of equity at the end of 1Q) against container sector average between 60 and 65.

NOL intends to use about S$700m to repay debt, the remainder for investments and working capital.

But the prognosis for the entire shipping industry for 2009 and early 2010 remain gloomy, so likewise does NOL operational gearing.

Buying into NOL (its shares have risen from 0.85 in early March to 1.68 yesterday) is to believe that NOL’s management can use its great financial gearing into something tangible. EG buying ship at bargain prices from highly leveraged shippers in distress, and shipyards.

And increasingly its gearing again in the process.

Imagine going into the next cycle with cheaply acquired ships and a gearing of 45%. Wow Bam. This is an unproven thesis. NOL is one of the most conservative container lines and has taken a higher proportion of its ships out of service than other lines to tackle over-capacity.

Can cautious managers turn into swashbuckling asset buyers? There are the Greeks and Chinese buccaneers out there too on the prowl for ships.

Writer has some NOL shares in his CPF portfolio.

Looking a gift horse in the mouth or  Why new SAT shareholders should be grumpy

On May 14, SIA announced that it was going to distribute to its shareholders its 81% stake in SATS by way of a dividend in specie. Since then share price is up 5%. This comes after SATS has become cash poor.

In January 2009, SATS launched a takeover bid for its Temask stable-mate SFI. According to the takeover documents, the pro-forma balance sheet as at September 2008 would have shown that the net cash position of the SATS (including SFI) group deteriorated to minus S$21 from S$528. In particular, cash in fixed deposits would have fallen from S$573 million to S$64 million.

But SATS needs cash because “SATS is committed to growing its 2 core businesses of airport and food services”.

It could borrow big-time, pro forma net gearing is 0.04% from (0.35)%. But in Singapore, where debt is a dirty word in GLCs (NOL comes to mind), a rights issue is reasonably probable.

Temasek as the new controlling shareholder of SATS has $356 million from its sale of SFI shares to fund any rights issue. But do other new SATS shareholders have the cash?

Finally, looks like MM Lee gets his way. In 2004, he said SIA should divest itself of SATS and SIAEC. SIA’s management demurred.

Will SAEC be divested despite SIA mgt saying last night that the SAEC holding is strategic? Stay tuned.

Backward into the Future

November 8, 2009 [OK I did get this wrong, but it could still happen]

SIA announces that it is proposing a dividend in specie to its shareholders of the Company’s entire shareholding in SIA Engg.

“Distributing shares through an in specie dividend will unlock shareholder value by giving SIA shareholders direct ownership of SIA Engg at no cost to them.”

“The proposed distribution will allow SIA to concentrate on its airline business,”something advised by MM Lee in 2004.

“SIA Engg will be able to independently pursue opportunities to aircraft maintenance, repair and overhaul businesses. The Proposal will improve trading liquidity of SIA Engg  shares, potentially enhancing value.”

May 14, 2010

SIA Engg announces Acquisition of 100% of ST Aerospace from ST Engg

“Acquisition consistent with SIA Engg previously announced long-term strategic plan”

ST Aerospace is the “Largest aircraft MRO company by commercial airframe man-hours” and has “Strategic partnership with RSAF”

Rights issue with Temasek taking up its entitlement and prepared to subscribe for shares that other shareholders don’t want.

Remember you first heard it here. But based on the companies’ past performance, SIA Engg should only buy ST Aerospace, if the price paid reflected Aeo’s lower margins. SIA Engg’s margins are consistently better than those of Aero. EG In financial yr ending Dec 2008, Aero’s turnover was S$1.9b with PBIT of S$272m, while SIA Engg turnover was S$1.1b but PBIT of S$301m.

But what price another national champion? And financial engineering by Temasek?

Temasek’s recently revised investment priorities R SGX Listcos

Yes this was Temasek week, and we will end the week by looking to see which non-Temasek SGX-listcos fit into its recently revised investment priorities:

  • non-West (It got its timing wrong with Merrills and Barclays coming-in and exiting. And misanalysing ABC Learning),
  • poised to capitalise on the growth of middle class consumer credit in Asia, and
  • with plausible competitive advantages, following its reinvestment in Olam.

What about the following?

  • Bayan – manager and developer resorts, hotels and spas in the Asia Pacific.
  • Creative – remember its MP3 player predated iPOD and Apple paid it damages for breaching its patents. All it needs is a bit more Zen meditation and it could have a mega hit on its hands.
  • Eu Yan San – has reached the limits of what it can do with its resources in Chinese medicine. Needs outside capital, but family squabbles prevail. But Temasek is different.
  • Raffles Education – big in Chinese education (and indirectly in property). In a bit of bother now but controlling shareholder and manager has a track record.

Bayan, Creative and RE are run by home-grown and-bred entrepreneurs. What better way of encouraging the growth of entrepreneurs with global ambitions, then by supporting these three companies?  We will keep you posted as we trawl through SGX listcos.

This continuing series will help us fill the gaps on those days when we wake up late or have nothing more interesting to say.

Whither the markets?

Fund managers, analysts, traders and media pundits are struggling to contain their confusion at what global equity markets have been doing since March.

The markets’ upsurge defies all rational explanations: just ask Temasek’s scholars and foreign-talent MBAs.

The conventional view is that this is a bear market rally. There will be a double-dip recession – a so called “W” recovery, where there is a steep fall, followed by a steep recovery and then another fall before another recovery finally appears which becomes more sustained.

Pundits pont out that, while not widely reported in the regular news, the bond markets had a mini crash in May. There’s talk of the ending of the multi-decade bull market in bonds, what with all the debt that governments have to raise.

My views on whether we are in bear market rally are just as irrelevant as anybody’s else.

But I heard something interesting on the FT (my second favourite newspaper) website a few weeks ago.

The strategist, from CLSA, belived that we are in the midst of a bear market rally. Nothing new here. But unlike other pundits, he said this rally could run for another two years before collapsing. He cited what happened after the dotcom bubble bust in 2000/ 2001.

He said, with hindsight, it was clear that the recovery from 2003 to 2007 was a bear market rally. Bottom line: A bull run or bear market rally can only be predicted in hindsight. Seating tight and doing nothing is not an option for a fund manager unless he is Warren Buffett.

Another reason to remain invested in Singapore mkt?

Could the plans to celebrate big-time the 50th anniversary of self-rule be a signal that the PM wants to calls a GE in the first half of next yr?

Remember that 50 years of self-independence coincides with 50 years of PAP rule, something that the celebrations are sure to link.

Have a good time tonite. And the next insight will be on tues morning.

Tempting the shorts

“China’s property market has been bouncing back over the last several weeks,” reports a FT publication. “Statistics from the China Real Estate Index System showed that residential property sales in 30 large cities increased by 11.42% April from March and transaction prices for new residential developments were up 3% week on week to the highest level this year between May 11 to 17.”

So it was not surprising that the CEO of CapitaLand over the weekend implicitly reminded investors that CapitaLand is NOT a Singapore property play but a China (property) play, “In 2008, our China operations accounted for about 26% of total group assets and contributed approximately 45% of the group’s earnings”.

The target is for China to make up 40 or 45% of assets in the next few years and for more than 45% of earnings. (Incidentally, if China assets are at 45%, then China earnings should be at 90%)

Is he reminding himself how big a bet CapitaLand is putting in China?

CapitaLand has just secured a S$5b three-year credit line with Bank of China and Industrial and Commercial Bank of China. What this means is that CapitaLand is gearing up just after completing a rights issue a few months back. It had reduced its net debt from S$5.6b to S$4.6b, a 18% improvement. Its net debt to equity had fallen to 0.32 from 0.47.

Now, making an assumption on drawdown by end FY2009, it will have net debt of S$9.6b and net debt to equity of 0.67. All very good if the Chinese property continues its bull run

But if it implodes (note that China super bull, Jim Rogers, is avoiding recommending property to investors: in 2008 he was negative about Chinese property) and CapitaLand has not sold assets before the downturn: another rights issue?

Hedge funds who are negative on China property could do worse than start to build up short positions in CapitaLand.

The perils of buying NTA

The share price of United Engineers is falling after its high of S$2.37 on 29 May. This illustrates that buying a counter at a deep discount to its NTA can be problematic, if there is no catalyst to unlock value. To recap. As part of an asset rationalising swap, Straits Trading and its controlling privately-owned shareholder swapped assets.

12% of UE was sold to Tecity at around S$1.52 a share, and 7% of WBL Corp was sold to ST as part of the asset swap. ST ended up with 19% of WBL. BTW WBL has another 10% of UE.

There was speculation that Tecity had immediate designs on UE. UE’s shares are at a deep discount to its published NTA of S$3.43. They remembered Tecity’s bid for ST which ended with Tecity paying S$6.70 for assets (revalued) worth S$6.52 a share. What is forgotten is that Tecity busy coping with the consequences of having spent S$1.1bn to own 82% of ST; is not likely to want to reward other UE shareholders at Tecity’s expense.

Assuming it bids at published NTA, it would have to spend S$679m. And if, the other major shareholder, GE Life starts a bidding war, the cost could escalate, like in ST. In early 2008, there were estimates that UE’s NTA could be S$6. And if it did bid at NTA or more, any time soon, ST’s minority shareholders would rightly cry foul.

TeCity’s founder, the deceased Tan Chin Tuan, would spin in his grave hearing his heirs being accused of being unfair to minorities.

Incidentally the cost of selling UE’s assets are likely to be very high.

Maybe future UE annual reports should give an estimate of the costs of selling these assets to unlock the published NTA. And maybe advisers to the independent directors of a target company; and the acquirer should subtract the costs of liquidating the assets when toying with NTA values in their reports.

If this had been done in ST, Tecity could have got away with a lower bid.

What price growth?

Bharti’s proposed acquisition of a 49% stake in South African MTN would give SingTel (at 30% Bhart’s biggest shareholder) exposure to markets in Africa and the Middle East, where there are a lot more mobile phones than people. Australia and Singapore (its biggest markets) are the opposite.

But the complex deal involving cash and a cross-shareholding by MTN into Bharti would mean that SingTel’s share of Bharti would drop to 19%. SingTel has indicated that it wants to rebuild its stake back up to 30%, if the deal goes through. At current prices, this means coming up with about US$5.3bn or S$7.7bn.

It has net debt of S$6.5bn and net gearing of 24%. But raising net debt to S$14.2bn and net gearing to 52% is not an option in a GLC, though it could make sense in any other telco that has stable underlying cashflow. Qwest (albeit it is now trying to reduce debt) has a ratio of 110%. (more debt than equity).

So if the Bharti/ MTN deal goes through, a SingTel rights issue will be necessary.

As to how dilutive this will be — S$7.7bn works out to only Singapore 48 cents a share, or 16% of its market capitalisation based on yesterday’s closing price of S$2.95.

Not too dilutive for exposure to fast-growing markets where there are more people than phones.

Long short pair

DBS Research’s economist issued a report suggesting Asia is on its way to an economic recovery because the region’s production is rebounding in a V-shaped fashion. “Asia is perched on a recovery path at the moment … we do not expect a W-shaped path in the near term.”

DBS Vickers Securities raised its 12-month target price for the stock of Singapore Exchange (SGX) to S$9.10 – the highest now among the target prices of 20 analysts polled by Bloomberg.

But does how does SGX look in the medium term vis-a-vis its rival, HKSE? Remember HK would benefit from a V-shaped recovery too.

Traditionally, an important measure of the success an exchange vis-a-vis its peers is the new IPOs it attracts According to Dealogic, some US$1.6bn has been raised this year through eight listings in Hong Kong. And the outlook is improving By contrast, Singapore raised US$12.5m from 3 IPOs all second board (sorry “Catalyst”) IPOs: with gloom pervasive, “2009 may be the worst year in memory for the IPO market”.

Funnily this just when FT reports that “Asia is expecting a strong pick-up in market listings in the second half of this year thanks to a steady flow of flotations in Hong Kong and amid growing expectations that Beijing could soon allow domestic listings for the first time in almost a year.”. It quoted Dealogic’s Ken Poon, “Given the strong liquidity flows into the region, I would expect 2009 IPO volumes will exceed 2008 … As Asian IPO volumes in 2008 was US$23bn while in the first half of 2009, it’s less than US$2bn … That would mean a really surprising second half. Sentiment is strong and liquidity is there to support new issues.”

And Hong Kong can look forward in 2010 to the AIA listing, the $5bn-plus IPO of AIG’s Asian life insurance unit This IPO is set to be the world’s largest IPO since 2007, when incidentally thanks to the Chinese, more money was raised in HK than in New York. So shouldn’t hedgies be thinking of shorting SGX, and buying HKSE? Even though SGX’s forecasted PE is below 20x, while that of HKSE is closer to 30x.

SIA’s Investment Prowess

If SIA were not such a great airline operationally and financially, I should be worried about its: “still keeping an eye out for possible acquisitions in China and India, despite the current economic downturn”.

The last time it went on a buying spree between 1999 – 2001, it showed that investing in airlines was not a core competency.

In April 2000, SIA purchased a 25% stake in Air New Zealand for 426 million New Zealand dollars (352 million Singapore dollars), or NZ$3 a share. Yes it was the usual “strategic” investment. SIA also participated in a subsequent rights issue, paying an additional S$51 million, to avoid diluting its 25% stake. The original purchase plus rights amounted to S$403 million.

SIA in 2001 tried to invest more, failing only because the NZ government was dilatory in approving an increase in its stake in Air NZ. Phew!

When 100% owned subsidiary Ansett failed in late 2001, pulling AirNZ down with it, SIA’s unapproved offer of NZ$1.31 a share was still on the table.

And in late 1999, a cash-strapped Richard Branson sold a 49% stake in his airline, Virgin Atlantic, to SIA for £600m (US$960m), a very good price for Mr Branson. SIA still has the stake and the much talked about synergies have been quietly forgotten.

There were also rumours of rows between Mr Branson and SIA on Branson’s plans to muscle-in on SIA’s lucrative UK to Oz route. So has the idea of selling the stake, what with valuations of airlines falling.

But let’s be fair. The then CEO of SIA has moved on to become chairman of OCBC, not bringing with him his deal-making enthusiasm: for that OCBC shareholders should be happy.

And recently SIA kept its nerve and refused to up its offer for a stake in China Eastern Airlines, which is now in financil difficulties. So maybe SIA is a more disciplined investor.

But being disciplined has its perils. Ask PSA which refused to outbid the Arabs for a stake in a choice HK terminal, only to have play catch-up on a second-rate terminal.

Things might not be as they seem

Consoling yrself that higher petrol prices are the price to pay for a V-shape recovery? The Western and Chinese economies are on their way to recovery, and rising oil and commodity prices are foreshadowing this recovery.. Think again because this NYT article http://www.nytimes.com/2009/06/11/business/economy/11commodity.html?ref=business reports that growing evidence suggests that a sizable portion of this buying has been to build stockpiles in China, and may not be sustainable.

Core competency of new Temasek CEO

Could the new CEO of Temasek finally sort out the strangeness of Temasek having

  • two world class competing offshore rig builders in two separate listed listcos; two property listcos — one big, one tiny
  • two MRO aerospace cos – one listed and the other part of a listed conglomerate?

Surely the national interest could be served by merging these and creating national champs. Yes, these have discussed inside before, but nothing happened. Gossip says that the bosse at the helms of TLCs are protective of their turfs: bit like Chinese lawlords throughout history. It always took a great leader to unify China over and over again.

But this is unlikely to be his priority. Neither is going into natural resources.

When he was hired to be CFO of Melbourne-based miner BHP in 1999, the “Big Australian” had lost its way.  In the 1990s, it did a series of ill-conceived acquisitions and failed projects, amid historically low commodity prices.

The former investment banker was one half of an American duo. The other was CEO Paul Anderson, who came from Duke Energy.

In their first two years, BHP got rid of 2,000 jobs and A$6.9bn worth of assets. They then merged BHP with Billiton, createding the world’s biggest miner.

Goodyear then became CEO and a key legacies, analysts say, is the financial discipline he brought to BHP. He ensured it grew fast enough to capitalise on the commodities boom while avoiding the ill-conceived spending of the past; and all the while,  returning cash to shareholders.

Shortly after he took charge as CEO,  it was announced that BHP would increase its capital management programme by more than four times to US$13bn, beginning with a US$2.5bn off-market return in Australia.

With the Singapore government tapping the reserves, someone with a track record of returning  cash to shareholders while growing the portfolio is needed.

There is no Singaporean with these skills.

Follow

Get every new post delivered to your Inbox.

Join 214 other followers