Archive for July, 2010|Monthly archive page

Temasek: China banks’ loans

In Banks, China, Temasek on 31/07/2010 at 7:14 am

Chinese banks may struggle to recoup about 23%  of the Rmb7,700bn (US$1,100bn) they’ve lent to finance local government infrastructure projects . reports Bloomberg quoting “a person with knowledge of data collected by the nation’s regulator”.

The estimate implies US$261bn of debt will go bad, almost five times the US$53.5bn the nation’s five largest banks are raising to replenish capital. Remember Temasek owns 4% of Bank of China and 6% of China Construction Bank, both of which have raised more capital from shareholders.  And 18% -owned StanChart  invested $500 million in Agricultural Bank of China’s recent IPO.

If the estimate proves even a bit correct, Temasek will be having to invest more in the next few years  to avoid dilution.

Related post


China: No premium for A shares

In China on 30/07/2010 at 5:36 am

Mainland Chinese investors traditionally had to pay a huge premium for shares listed domestically over what those same shares trade for in Hong Kong. The premium has disappeared. Why?

Prices in Shanghai and Shenzhen have fallen by 22% and 15% respectively this year, making the mainland one of the world’s worst-performing markets. In Hong Kong prices of shares in the same companies have fallen far less. Outsiders appear more willing to believe China’s growth story than the Chinese.

Investors no longer have funds. .Of the US$19bn raised recently by Agricultural Bank of China, more than half came from other Chinese state-owned organisations. Every other big bank is raising more capital. Chinese companies raised $54 billion in equity in the first half of this year (before the AgBank listing) and another $80 billion in debt, according to Dealogic.

The moves to liberalise the yuan could play a part.

But Chinese companies are still trying to list.

2020 Olympics: S’pore will bid?

In Economy, Uncategorized on 29/07/2010 at 6:19 am

I’ve been suspicious of the stated motive of hosting this year’s Youth Olympics Games.  It seemed a waste of resources (esp money) staging this BS event. Not something I expect from this govmin.

I concluded that it had to be because S’pore was contemplating bidding for a mega-event like the Commonwealth Games, Asian Games or possibly the Olympics. It wanted a dry run to see if could do something big properly. It could be a fiasco given the track record of ministers like DPM Wong, and ministers VB and Yacob.

A letter from LTA to ST’s Forum said: “Traditionally, Olympic host cities have provided Olympic lanes that are closed to other traffic to ensure smooth traffic flow for Olympic vehicles … we have adapted this tradition by having Youth Olympic lanes on our roads.”

So the Olympics Games was the benchmark for this BS YOG.

OK, a 2020 Olympics bid might be a bid too far. But the 2019 Asian Games or 2018 Commonwealth Games could be a possibility?

But if Vivian B cannot get a national stadium built soon, the S$387m (more than 3x the estimated S$122m)YOG money will be flushed away. I mean we might not even be able to bid for the “peanutty” 2015 SEA Games (((.

Special lanes are an Olympic tradition, says LTA

Read the rest of this entry »

LNG Terminal: White elephant?

In Energy on 28/07/2010 at 6:08 am

S’pore’s rationale for its S$1.5bn LNG terminal is energy security (see backgrounder).

But an unstated aim is S’pore’s desire to ride on China’s growth. China needs a lot more energy, and gas is clean and relatively cheap. There will be opportunities for traders to make use of the terminal to sell LNG to China and other countries.

Err that was the plan. So the analysis  by Wood Mackenzie, an energy consultancy, that in China,  coal gasification, coal bed methane and in particular  shale gas are expected to supply more than 12bn cu ft per day by 2030,  cannot be welcomed here.

Wood Mackenzie says China will need only half as much more LNG from 2020 onwards than it will require in the next decade, cutting the country’s need for new tanker-delivered LNG to 8m tonnes a year from 2020, against 16m annually during the next decade. Read the rest of this entry »

Temasek: Shale gas is a long term investment?

In Energy, Temasek on 27/07/2010 at 5:37 am

Taz at least to Exxon’s CEO talking of Exxon’s investment in XTO Energy.

And Exxon, the oil & gas major usually gets these things right. Remember it takes up to 30 years to develop a major oil or gas field.

Temasek doesn’t have such a long-term horizon. Remember its “long-term” investment in Merrill Lynch?Lasted slightly more than a yr, and it cut loss, juz as the market was turning, and top hedgies were buying into BoA (buyer of ML). Read the rest of this entry »

Khanazah — Who you misleading?

In Uncategorized on 26/07/2010 at 5:30 am

[Update 28 july 2010 — Yes, from the perspective of an investor, Khazanah overpaid — Accept offer, I intend to. Reasons tomorrow]

In the offer to buy 51% of Parkway, Khanazah says Khazanah’s core competency lies in improving the corporate governance of its investee companies and providing support and guidance on the strategic direction of such companies through its nominees on the board.

Excuse me K, but what about all those disasters in the KLSE listcos over the years  that you invested in? I hope you realise that misleading info in an offer document can lead to law suits.

To be fair, the rest of how it describes itself is very factual. Read the rest of this entry »

DBS: Redoing Retail Banking

In Banks on 25/07/2010 at 10:26 am

Try this, Mr Bertie Cheng

Picture of a suggested new bank

Jason Goodman of advertising agency Albion, which runs campaigns for brands such as Skype, BlackBerry and Innocent, pitches a new High Street British bank:

  1. Name and logo that positions Newbank alongside disruptive new online brands like eBay, Zipcar and, that are pioneering non-institutional ways of getting stuff done
  2. All account processing done online. Newbank needs to force the issue, as easyJet did with online ticket booking 10 years ago
  3. Customers and bank share data in a radically transparent way Read the rest of this entry »

More on Merrill Lynch’s View

In Uncategorized on 24/07/2010 at 5:34 am
I’ve been asked to post more on ML’s view of global equity  markets. Here goes
Indicators point to a market bottom in December.

Our work shows the OECD indicator is the best of the major leading indicatorsand should be looked at on a six-month change basis. It is at its best whenpredicting turning points in resources performance, which it does accurately75% of the time. This time around it is pointing to a bottom in December 2010.

Investor positioning still too cyclical.

Our global fund manager survey shows investors are still overweight cyclicalassets even though they have changed their view of the recovery. This will needto change in order for the market to bottom. Low volumes suggest that manyinvestors stood back during the market instability, and they may now use calmermarkets to undertake sector rotation.

Whither global equity markets?

In Uncategorized on 23/07/2010 at 5:24 am

Three  divergent views from three brokers, and what fund mgrs are telling  me.

Credit Suisse is the most bullish.  It sees a strong recovery in the second half of this year and compares this yr to 2004, a disappointing first half followed by a great second half beginning in mid-August. Like in 2004, the catalyst will be a Chinese relaxation of tight monetary policy. Read the rest of this entry »

Temasek: Smarter than Yogi Bear?

In Temasek on 22/07/2010 at 8:29 am

In my last post, I speculated that Temasek raised sterling bonds because it might want to buy an oil minor. Read the rest of this entry »

Temasek: Why raise £? Buying oil minor?

In Energy, Temasek on 21/07/2010 at 6:18 am

Temasek, which had previously issued bonds only in US and Singapore dollars, sold £200m of 12-year bonds and a further £500m of 30-year debt.  The 30-year bonds were popular  with British pension funds because there is a shortage of long-term UK debt.

The 12-year bonds were priced at 95 basis points above UK government bonds, while the 30-year paper yielded an extra 90bp over gilts.

Temasek declined to comment on the rationale for the sale, the wires and FT quoted people close to the deal saying it was a move t obtain relatively cheap long-term funding, diversify its investor base and  borrowing profile.

There has been speculation that Temasek would invest in BP. The fundraising was not linked to any new investments in the UK, according to people familiar with the matter, the wires and FT reported.

But could Temasek be interested in a small London listed oil & gas company? It is interested in the energy sector. Read the rest of this entry »

Strong growth momentum– Brokers’ picks and dogs

In Economy on 20/07/2010 at 5:38 am

So with the  growth here, easily beating China’s, what are brokers recommending? Read the rest of this entry »

Vietnam: There be value?

In Emerging markets, Vietnam on 19/07/2010 at 7:42 am

Vietnam is a hot market among investors in frontier markets. It has a growing, and hard working and cheap work force, a large domestic market, and is liberalising its economic policies, welcoming foreign investors. Manufacturers are seeing it as a place to supplement or complement their China operations.Deficits are relatively modest, and it has not been in international financial markets long enough yet to rack up any serious i.o.u.’s.

But locals don’t trust the government.

What makes them nervous is the suspicion that the governing Communist Party will do anything to hit its economic growth target before a party congress early next year, even if that means letting inflation get out of control.

They are buying US$ and gold whenever they can.

So many dollars have been scooped up, in fact, that the country’s central bank, the State Bank of Vietnam, is at risk of running out, analysts warn. Any shock, like a double-dip global recession that hurts exports or foreign investment, and Vietnam could find itself without enough dollars to pay for crucial imports like fuel, they say.

“The question mark at this point is whether the dollars will come in,” said Ngiam Ai Ling, director of Asian sovereign ratings at Fitch Ratings in Singapore, which warned in March that it might cut Vietnam’s rating, already below what the agency deems investment grade.

NYT article on this and other problems, as well as what’s gd abt Vietnam.

How to spot bad news a’coming

In Uncategorized on 18/07/2010 at 9:26 am

One way is to keep a mental note of which companies are PR-shy. If such a company starts putting out a glossy annual report,  talking to the media, its time to expect some not-so -gd news. Take Straits Trading.

This company, while not one I would invest in, is one of my favourite cos because  it does not court publicity.  So when in April, a glossy annual report came out which attracted this  and in May the executive chairman gave an interview to BT, my “sewer mind” (as friend calls it) got suspicious. I was spot-on. Well on 11 May it was annced in its 1Q2010 results

However, in line with its strategy to focus its resources operations on tin, the Group made exceptional impairment provisions of $20.5 million largely in respect of its non-tin resources investments. After these provisions, the Group recorded a net loss before tax of $6.2 million in Q1 2010.

This is 2% of its 2009 reported assets, not that significant but still noteworthy if I were a shareholder. And at the net of tax level, the loss of 10.3 million would have amounted to 7.4% of 2009’s net profits.

Cambodia: There be value?

In Emerging markets, Temasek on 17/07/2010 at 7:20 am

Representatives of large US corporations, including General Electric, Johnson and Johnson and JPMorgan visited Cambodia to discuss the potential for future investment.

Few mths back, I heard Temasek is sniffing around too.

Note there is no stock market here yet.  One was supposed to start last year.

Singapore’s Economy — Clouds a’plenty

In China, Economy on 16/07/2010 at 5:48 am

Strange tot in light of broker upgrades as reported in BT

But the boss of Rio Tinto (one of the three cos that supplies China with iron ore)  is  concerned that the global economy is very volatile). He is concerned about a slow down in China. But if Intel’s more optimistic view is correct, let the gd times roll on.  Article on the contrasting view of both companies.

And if the economy is so strong,why the slowdown in house sales in June and the slight dip in retail sales? Article reporting this news.

DBS: Another case of discrimination against locals

In Banks on 15/07/2010 at 8:53 am

DBS’ Hong Kong unit has agreed to pay out $651 million Hong Kong dollars or about S$115 million to some clients who bought products linked to Lehman Brothers. As HK$1.3 billion of notes were sold, the compensation received works out to 50% of amount invested.

In S’pore, it sold a similar product, HN5 Notes. DBS issued, arranged and distributed HN5. A total of S$103.7 million worth of HN5 were sold to 1,083 retail clients between 30 March and 30 April 2007, according to a July 2009 MAS report.

The same report said DBS compensated investors S$7.8 million.

What this works out to is 7.5% of amount investments. “Peanuts” as Mrs SM could have said, but didn’t.

Some MP should ask in Parly SM Goh, chairman of MAS, why did DBS screw its HN5 investors, esp as DBS  said in a statement the settlement was made in the interests of its relationship with customers and of the Hong Kong financial system. So the peanuts paid to S’poreans was in the interests of its relationship with customers and of the S’pore financial system? Or it gives F#$%ALL to its relationship with S’porean customers and of the S’pore financial system?

Value does not exist

In Uncategorized on 15/07/2010 at 6:08 am

There is no such thing as value. How we value anything depends on our prejudices and values.

DBS: What the systems failure report shows

In Banks on 14/07/2010 at 6:09 pm

By now, a lot has been written about what went wrong at DBS when its ATM and Internet banking systems went kaput for a while. This is a gd balanced article.

But I’m disappointed that no-one has pointed out that the failure shows that DBS tries to avoid telling the public and its customers things that negatively impact its image, while quickly giving out news that puts it in a good light. I find it strange that DBS could inform 10,000 of its customers that systems had been restored, yet failed to inform these same 10,000 customers that there was something rotten at DBS.

Next, while it kept the media informed of what it was doing to fix the problem, it didn’t alert the media immediately when it knew that there were going to be problems for its customers. The media could have advised DBS customers not to use the ATM machines and other affected services, making it a bit more convenient for customers.

Investors can reasonably wonder if DBS’s investor relation team will apply the same principles of “Delaying the release of bad news, while accentuating the good news”. Here’s hoping I’m wrong.

Why S’pore’s GDP grew so strong?

In Economy on 14/07/2010 at 4:24 pm


  • Pharmaceuticals which accounts for about 4-5% of the economy, increased by about 850%t in the second quarter from the previous three months.
  • Growth in the second quarter was helped by exports to Europe, which was up 75% in June from the year before, exports to Japan grew by 50% and to China by 39%.

GDP grew by 18.1%  in the first half of the year compared with the same period last year, and grew by an annualised and seasonally-adjusted 26%  in the second quarter from the previous three months. Compared with the same period last year, it grew 19.3%  in the second quarter, the biggest rise since records began in 1975.

Singapore increased its forecast for economic growth for this year to 13-15%  from a even then too conservative 7-9%.

Singapore now expects exports to increase 17-19% , up from its previous forecast of 15-17%, due to buoyant demand from China, Indonesia, Malaysia and other Asian countries.

A more detailed report.

Tesco replaces Carrefour in S’pore?

In Emerging markets on 14/07/2010 at 6:31 am

The FT reports that Carrefour is planning to pull out of Thailand, M’sia and S’pore.

The pull-out is in its early stages. Carrefour is talking to bankers but has yet to decide how to proceed and, according to one person familiar with the situation, there have been no serious discussions yet with potential buyers …

Tesco, the UK retailer, is regarded as the most likely trade bidder for the Malaysia and Singapore assets, but Dairy Farm, the Singapore-listed retailer and Aeon, the Japanese retail group, could be interested.

Potential private equity bidders include CVC and Navis Capital, the Malaysia-based group. NTUC Fairprice of Singapore, which runs a supermarket chain, is seen as a potential buyer for the Singapore and Malaysia businesses, if they were to be sold separately.

Tesco is also a top contender for Thailand as is France’s Casino group. These two chains are the biggest in the country. Neither would comment.

Frontier markets are fashionable

In Vietnam on 14/07/2010 at 5:28 am

What are they?

Frontier investing is a new-enough phenomenon that professionals disagree on which countries make up the sector. Different managers and index providers include different names. The Claymore E.T.F., for example, has Chile and Poland among its top five holdings, though neither is part of the MSCI Frontier Index. The index includes such diverse countries as Argentina, Romania, Kenya and Kazakhstan. It rose 0.66 percent, including dividends, in the first six months this year, compared with a negative total return of 7.57 percent for the Standard & Poor’s 500-stock index. The frontier index has been helped along by positive returns in three of its important markets — Nigeria, Kuwait and Qatar.

Almost everyone, including MSCI, puts Nigeria in the frontier category … “ … the next Brazil?’ it’s Nigeria,” because it also has a large population and a huge base of natural resources.”.


Many but not all of the frontier countries are richly endowed with commodities. As expected from economies on four continents, they’re diverse. Kazakhstan, for example, unearths oil, metals and mineral, while Argentina sells soybeans, corn and wheat. Vietnam excels at manufacturing.

Because of this diversity, their stock returns tend not to move in lock step with those in developed and emerging markets.

“We view frontier markets as attractively valued compared with emerging markets. They didn’t participate in the huge run-up in 2009 that you saw in the emerging markets.”


Some frontier countries remain more vulnerable to corruption and political crises than the typical developed market

“In the bear market, they got hit hard, so it’s not that they’re protected.”

ANYONE who believes that frontier markets will rise relentlessly should recall 1978 … That was when Time magazine named Deng Xiaoping, who led the overhaul of China’s economy, as its Man of the Year.

“That’s when the world came to the idea that China was opening, and that’s quite a few years ago Since then, the economy has boomed, but the stock market has been on a roller coaster — sagging, for example, during and after the Asian financial crisis that began in 1997. … a lot of these trends are true, but you can go through periods of sharp volatility.”

NYT article

SMRT, PUB, MHA: A lesson in analysing balls-up

In Uncategorized on 13/07/2010 at 8:46 am

S’pore’s  govmin poster boy for military and high tech and innovation matters is Israel.

So all GICs and govmin ministries should read this inquiry report

An Israeli military inquiry into the naval raid on a Gaza-bound aid flotilla says commandos were under-prepared and mistakes were made at a senior level.

The report says the operation suffered from flawed intelligence-gathering and inadequate planning.

But it also praised the commandos involved and found the use of force had been the only way to stop the flotilla.

BBC Online report.

Blame is put on the leaders, not the foot soldiers.

Wondering abt all those macroeconomic disputes?

In Economy on 13/07/2010 at 5:24 am

Answer: An economy cannot have its  cake and eat it. Or a country has to choose only two out of three goals ,not all three.

Various pundits and politicians, including President Obama himself, have complained that the Chinese renminbi is undervalued and impeding a global recovery. The problems in Greece have caused many people to wonder whether the euro is a failed experiment and whether Europe’s nations would have been better off maintaining their own currencies.

In thinking about these issues, the place to start is what economists call the fundamental trilemma of international finance. Yes, trilemma really is a word. It has been a term of art for logicians since the 17th century, according to the Oxford English Dictionary, and it describes a situation in which someone faces a choice among three options, each of which comes with some inevitable problems.

What is the trilemma in international finance? It stems from the fact that, in most nations, economic policy makers would like to achieve these three goals:

Make the country’s economy open to international flows of capital. Capital mobility lets a nation’s citizens diversify their holdings by investing abroad. It also encourages foreign investors to bring their resources and expertise into the country.

Use monetary policy as a tool to help stabilize the economy. The central bank can then increase the money supply and reduce interest rates when the economy is depressed, and reduce money growth and raise interest rates when it is overheated.

Maintain stability in the currency exchange rate. A volatile exchange rate, at times driven by speculation, can be a source of broader economic volatility. Moreover, a stable rate makes it easier for households and businesses to engage in the world economy and plan for the future.

But here’s the rub: You can’t get all three. If you pick two of these goals, the inexorable logic of economics forces you to forgo the third.

NYT article. Here MAS has goals1 1 and 3, M’sia. India and China has goals 2 and 3.

SMRT: Assurance rather than celebration

In Uncategorized on 12/07/2010 at 4:54 pm

So SMRT will fly 4500 flags to celebrate National Day and play some song.

Err would it be not be better to assure commuters that the train and bus depots are secure from trespassers?

No point flying flags and sing songs while there are dead bodies.

Temasek started it: Ignoring MM

In Uncategorized on 12/07/2010 at 7:30 am

Now a senior MediaCorp editor and veteran journalist implies that MM is wrong about the two banks’ policy (Note this is only available for the next seven days).

What next? Soon ST will say MightMind ain’t worth his ministerial pay?

Sigh: Reminds me of “The Incredibles”of what society did to superheroes when superheroes  were considered irrelevant: ignore or ridicule them.

Declaration of interest: My superheores are MightyMind, Batman and Wonder Woman.

Related post

What is value?: One view

In Uncategorized on 12/07/2010 at 5:56 am

Is this view of value,  profound, PR banality, or pure BS? If one of the last two, remember the speaker is one ballsy lady: she took on the much, much wealthier OCBC Lees in the fight to control Straits Trading, taking on debt in the process.

She is now the executive chairman of Straits Trading.

STC [Straits Trading]is an investment company and its subsidiaries should be viewed as business investments, she said. Does that mean every business is potentially for sale? ‘If we are true to what we say, that we must realise shareholder value, anything at the right price we must consider it for sale. One should not be so married or so emotionally attached that nothing is for sale,’ she said. ‘But having said that, the considerations are plentiful; it cannot just be today’s price, it cannot just be 10 per cent above today’s price,’ she said. The group is prepared to hold for 20-30 years if that’s what it takes, in order for value to be realised.

Calling STC’s real estate division as the ‘meat’ of the group, she is mulling over what the balance should be in terms of how much should be developed for sale and what to hold for rental income. STC’s real estate assets include its flagship Straits Trading Building, a 28-storey building at Battery Road, 4 developed bungalows and 5 plots of bungalow land…

Part of a BT report in April that I rediscovered while file-cleaning.

Paul, Mani and World Cup winner

In Uncategorized on 11/07/2010 at 5:20 am

Whether it’s Paul the sea creature or Mani the bird, it’s all in the maths of luck or randomness.

Talking abt Paul: [M]athematicians point out that his run of predictions is not that extraordinary.

As Paul was predicting two possible outcomes (win or lose, and not a draw), he had a 1/64 chance of predicting six correct outcomes – a 1/2 chance of predicting the first game correctly, then a 1/4 chance of predicting the first two games, a 1/8 chance of predicting all the first three games, and so on.

The chances of him correctly predicting seven games, up to the final, is 1/128.


Chris Budd, professor of applied mathematics at the University of Bath, says that even highly experienced people find it difficult to predict the outcome of a football game, and compares Paul’s feat of “prophesy” to the tossing of a coin.

“If you toss a coin and it comes down heads six times, that is unlikely,” he says. “However it is not as unlikely as predicting which numbers will win the lottery, which is 1/14 million.”

“Mathematics can be spooky in the way it can appear to predict things,” he says.

BBC Online article.

US trying to ruin footie

In Uncategorized on 10/07/2010 at 5:18 am

Having inflicted damage on Iraq, Afghanistan, Pakistan the Americans are moving onto footie.

They want to quantify footie using stats and analaytics.

Americans, go yrselves and us a favour, go bully Muslims.You tried to defeat the Vietkong and Afghanis using metrics like body counts, bombs dropped on innocent villages, rapes per soldier etc, but you failed. Footie will defeat you too.

Indonesia: Bullying instincts arising?

In Energy on 09/07/2010 at 6:32 am

This blog has reported that Indonesia is the new Brazil We should be nice to them but be careful of its bullying tendencies.  Indonesia has form in bullying those it thinks are weak. It succeed in East Timor, West Papua, Acheh and Celebes. It failed against M’sia and S’pore.

It seems to be trying again. Sometime back, our very own superhero MightyMind (or MM Lee in real life) told us,  “We are buying gas from our neighbours; they are thinking of upping the price in spite of the contract”: confirming Indonesian reports that various Indonesian officials have renewed calls for the country to renegotiate a reduction in the volume of gas sold to Singapore, given Indonesia’s growing domestic gas demand.

E.g. in June, Coordinating Economy Minister Hatta Radajasa was quoted as saying, “I have ordered the Energy Ministry and upstream regulator BPMigas to renegotiate the contracts, though we may not achieve what we want. I don’t want to breach the contracts, but we have to try any possibility.”

Energy and Mines Minister Darwin Zahedu Saleh was quoted in mid-June as saying Indonesia will adopt a government-to-government approach, rather than a business-to-business one, to renegotiate the gas supply deals with Singapore.

Indonesian Vice-President Boediono said in June the government will gradually increase its domestic gas price to try to increase investment in the industry and encourage foreign investors to sell their Indonesian gas domestically rather than export it.

But the  government led by the son of MightMind has not gone AWOL. Singapore has already started building a $1.5 billion liquefied natural gas terminal that will starting importing LNG from early-2013, according to MM from Qatar.

The terminal will initially be able to import as much as 490 mscfd of gas, slightly more than the total the three gas pipelines (two from Indonesia and one from Malaya) brings here.

Background info from BT on Indon gas

At present, Sembcorp Gas imports 325 million standard cubic feet daily (mscfd) of natural gas per day from West Natuna in Indonesia under a 22-year deal. This gas goes to major power generators and petrochemical companies here, including Tuas Power, PowerSeraya, ExxonMobil and Ellba Eastern.

From 2011-12, Sembcorp will import an additional 86 million mscfd from Natuna under a second deal that has been struck.

GSPL, a subsidiary of Temasek Holdings, currently imports 350 mscfd of gas daily from Grissik via the Sumatra-Singapore pipeline under a 20-year contract that expires in 2023.

GSPL has recently been in discussions with the production sharing contract holders there, including ConocoPhillips, on a new sales agreement for additional supplies, including for GMR of India’s upcoming Island Power station here.

Both Sembcorp’s and GSPL’s Indonesian piped gas contracts are based on formulas that take into account high sulphur fuel oil prices.

As it is, the Indonesian reports cited a BPMigas official saying the Singapore importers are paying double the amount paid by domestic buyers there.

Temasek: Results Analysed

In Temasek on 08/07/2010 at 6:15 pm

Gd balanced coverage, here and And here [Update on 8 July]

But disappointed that no-one pointed out that the difference in the previous portfolio high in FY2008 and the latest high FY2010  is a measily o.5%. And this when net profit is down 2 yrs in a row, which again, no-one pointed out: FY2009’s profit was only 33% of that of FY2008 (S$6bn v S$18bn) and there was another 26% fall between 2009 and 2010.

Worse then Death Crosses are coming

In Uncategorized on 08/07/2010 at 5:36 am

Taz what the man who predicted the superbull run of the 1980s and 90s (in 1978 and reiterated it in 1980) )and who said in 2002 that trouble was coming. He said the coming depression would be the worse in 300 yrs.  NYT article.

Note he got many things wrong too, so don’t bet the HDB flat on his tots.

Death crosses posting

DBS: Heads must roll

In Banks, Corporate governance on 07/07/2010 at 5:44 am
As the inquest into the breakdown of DBS Bank’s network continues, it appears that the bank’s showing fell short of the reliability benchmarks laid out by the Monetary Authority of Singapore reports BT.
The head of IT is an FT ,and the head of Consumer Banking and a previous head of IT is an FT, “Weath Destroyer” Rajan.
If DBS fell short of MAS’s benchmarks, home-grown, true blue S’porean, Peter Seah, chairman of DBS, should axe these heads to show that FTs too have to be accountable in DBS, and to “encourage the rest”
Then, with the blood flowing on the floor,  DBS would be a screaming buy.
BTW OCBC (FT CEO, but taz abt it) and UOB (proudly “home-grown” with some FTs) have not had a systems failure on this scale. Shows the lie to the “FT is best” policy, neh?

GE: Opportunities beyond China

In China, Temasek on 07/07/2010 at 5:31 am

Jeffrey Immelt, General Electric’s chief executive, has launched a rare broadside against the Chinese government, which he accused of being increasingly hostile to foreign multinationals.

He warned that the world’s largest manufacturing company was exploring better prospects elsewhere in resource-rich countries, which did not want to be “colonised” by Chinese investors. “I really worry about China,” Mr Immelt told an audience of top Italian executives in Rome, accusing the Chinese government of becoming increasingly protectionist. “I am not sure that in the end they want any of us to win, or any of us to be successful.” Mr Immelt acknowledged the importance of the Chinese market, which contributed $5.3bn to the group’s revenues last year — FT.

But US$5.3 bn is a peanutty 3% of 2009 revenues, and China will always need natural resources, so his plan to do without China is credible, unlike Google’s*.

Hmm maybe, China-fixated Temasek and its TLCs can learn from this? In their case, diversify away from China without losing the opportunity cost of not investing direct in China. Get what I mean?

Temasek Gp are big in China

Mentality of China bulls

*But Google has a cunning plan to use Android to soften losses on search in China. Never count Google out.

DBS: Look on the bright side

In Banks on 06/07/2010 at 6:55 am

Time to buy the stock?

Everything that could have gone wrong has — from blowing up customer (HN5), losing money (Islamic Bank of Asia), CEO dying of cancer, losing status of top dog in region, bad strategy (tiny stakes in regional banks) and now juz after trumpeting its return to retail banking, a blow-up in its systems that took eight hrs to fix.

The thing to watch is the fate of Rajan “the wealth destroyer” (he signed off on the HN5 notes as head of consumer bank). He is implicated the the latest failure because he is still the head of consumer banking, and because before he became head of consumer banking, he was head of IT.

If he leaves ASAP after this balls-up, then we know DBS is serious abt fixing its “countrymen” problems, they stock could be worth a buy. And oh and the head of IT in DBS is an ang-moh.

BTW OCBC (FT CEO, but taz abt it) and UOB (proudly “home-grown” with some FTs) have not had a systems failure on this scale. Shows the lie to the “FT is best” policy, neh?

S’pore doesn’t have the problems of Dubai

In Economy on 06/07/2010 at 5:49 am

Yesterday, we reported that Dubai is relooking its growth model (under Blame GKS?), sumething that the S’pore govmin is complacently  not doing.

But let’s to fair to the S’pore government by pointing out that S’pore doesn’t have the debt problems of Dubai.

According to FT: [T]he state-owned DW [Dubai World] is close to sealing an agreement on restructuring $23.5bn in debts.

Dubai’s state-backed companies face annual debt repayments of $15bn-$20bn. Analysts say the limited ability to raise funds suggests that further debt restructurings, causing pain to domestic and international lenders, are likely …

The government is set to turn its attention next to Dubai Holding, a conglomerate owned by the ruler, which has around $12bn in debts. Its investment companies, say analysts, could receive government support and are already in talks with banks for a rescheduling of debt.

The moral of the story: The PAP government is no different from other governments; radical change will only come when things go badly wrong. One LKY is still around from 1959. The youngest cabinet ministers are three generations his junior. GCT has been around since the 1970s and the PM since the mid 1980s. In 1959, Eisenhower was the US president, in the early  70s Nixon, and in the mid-80s the president was Reagan. All three presidents are dead.

Blame GKS?

In Economy on 05/07/2010 at 10:45 am

There is a gd post at Temasek Review on where they PAP goofed badly.

So can Goh Keng Swee be blamed for this state of affairs? He is the architect of S’pore’s economy, the MSM tells us.

It took a lot of balls,  intellectually and politically,  for LKY and GKS to adopt the advice of Dr Winsemius. His advice was against the grain of the conventional wisdom in development economics which saw inviting MNCs in as another form of colonialism.

Where the GKS/AW/LKY model broke down was when China developed and the USSR fell. Inviting MNCs in became the conventional wisdom. The model worked for us only when few did it. Bit like financial arbitrage which gets harder when more do it.

No it’s not GKS fault.  Blame GCT, LHL, and their team for not moving on.

They are like the “big warship” admirals who kept insisting on building warships when the submarine and aircraft carrier made big warships obsolete. Or the British and French generals that insisted that World War I tactics using infantry and artillery would win battles, when the Germans were building their panzer divisions, and refining tactics that would lead to the destruction of the French and British armies in June 1940.


S’pore’s problem is that the old model like an antique car still functions, encouraging govmin to juz tinker, and us to accept the tinkering. Maybe only a disaster will shake everyone out of complacency. Dubai after its financial crisis is now changing. According to FT: Ahmad al-Tayer, the new head of Dubai’s International Financial Centre, says the philosophy now “is to go back to our core business . . . which is that Dubai is a hub for trade, re-export and services” … The government is centralising decision-making and clawing back power from the sprawling state-backed business empires that came to dominate the economy. New boards are being introduced; the authority of the government audit department has been bolstered. A tough technocrat, Mohammed al-Shaibani, head of the ruler’s court, is now considered the dominant power in town, charged with cleaning up the financial mess.

The old families that helped the emirate turn itself into a regional commercial hub, but found themselves shut out by the state-linked companies in the late 1990s, are also making a comeback.

The younger breed of aides on whom Sheikh Mohammed bin Rashid al-Maktoum, the ruler, once relied, are now being marginalised. Some have fallen in a dramatic and humiliating fashion that has shocked the emirate. Probes into alleged past abuses of power – deemed necessary and fair by the government but denounced as a witch hunt by critics – have targeted dozens of former executives, forcing some to pay back their bonuses while locking up others or preventing them from leaving the country.

Fantasy analysis

In Uncategorized on 05/07/2010 at 7:23 am

See how it’s done — the outline of a Shell or Exxon takeover of BP

Why GIC and Not Temasek?

In GIC, Temasek on 05/07/2010 at 5:20 am

Norges Bank governor Svein Gjedremwas in Singapore to open an office of the central bank unit that runs the Norwegian SWF. It is the fourth office outside Oslo after London, New York and Shanghai. It will have 10 staff in Singapore to manage a portfolio of  about US$1.5 billion in assets.

He said in a lecture at the Singapore Management Universit he was looking for an opportunity to work with one of Singapore’s two sovereign funds, the Government Investment Corp of Singapore, to develop investment strategies for Singapore and elsewhere, according to BT.

Hmm, is Temasek too cowboyish for him? GIC came out ahead on its Citi investment,and while UBS is still an investment that lost value, UBS is still around, unlike Merrill Lynch where Temasek doubled down its bet. and Temasek cut its losses on Barclays, and BoA (the buyer of ML), just before markets turned?

Norway’s SWF’s performance

Temasek GIC ignoring Qatar’s ideas?

In GIC, Temasek on 04/07/2010 at 10:44 am

For example, when the Qatar Investment Authority is considering investments, “Government of Singapore Investment Corp and Temasek are our first ports of calls,” says one QIA executive. The QIA invested alongside CIC [China’s premier SWF] in Canary Wharf, beginning a dialogue which executives say they intend to continue, FT reports.

Don’t recall any deals where GIC, Temasek co-invest with Qatar. Temasek, GIC giving Qataris the cold shoulder despite their better track record?

FT continues:

Moreover, these funds are becoming more discerning – since they have learned who is trustworthy, by virtue of making some expensive mistakes. For example, there is still a lot of bitterness about representations made when executives of Citi and Merrill Lynch (now part of Bank of America) sought rescue funds. “They were like used car dealers,” says one leading investor in the Merrill deal bitterly, referring to the dialogue with that firm.

When those rescue financings were first made, some sovereign investors in these deals were able to extract better terms than others, including anti-dilution provisions and the right to reset terms while others did not. Recently, KIA and GIC were able to partly salvage their investments by changing the terms, while Temasek disastrously sold its stake in Bank of America at the absolute bottom in February, locking in a multi-billion loss (in spite of the advice of some of its peers not to do so).

Those bitter experiences have not prompted the funds to entirely abandon their investments in the US. When Larry Fink needed to raise billions to help finance BlackRock’s purchase of Barclays Global Investors earlier this year, he was able to raise the money from GIC, CIC and the KIA in less than a day because they all know and trust him.

Qatar can teach Temask, GIC the value of patience

In GIC, Temasek on 04/07/2010 at 6:18 am

When GIC and Temasek did the mega banking (UBS, Merrill Lynch, Citi) deals in late 2007, early 2008, they faced competition for these investments. UBS shareholders were even upset that UBS did not call for a rights issue because they tot GIC had got a sweet-heart deal. So did GIC when it (and many other reputable investors) funded the purchase of rent-control premises in New York. We know what happened there.

Despite having a lot more money (derived from oil and not the savings and hard work of the people), Qatar was a lot more cautious than GIC, Temasek and to be fair to our SWFs, other Arab SWFs, not to say the Chinese SWFs. Only the Norwegians may have been more cautious.

So last yr, as Qatar’s Sandhurst-educated ruler, Sheikh Hamad bin Khalifa al-Thani, put it last year: “With the current crisis, many countries prefer to keep their money instead of investing it abroad. For us, though, this is an opportunity that will not be repeated in the next 20 years.”

Now lots of London is owned by Qatar.

Maybe we need FTs who are patient to advise us. Not FTs who are like us: impatient to get things done.

Oh and in October 2009 Qatar Investment Authority made a £600m profit on the exercise and sale of Barclays warrants, while retaining the other half of these instruments plus a direct 7% shareholding in Barclays. They made the investment in late 2008 and must have felt sick when in January 2009, when Barclays’ share price fell to 50p. Shortly thereafter Temasek exited from its Barclays investment made in 2007. To this day, no-one is sure how much it lost.

But all those who castigate Temasek and GIC (e.g.websites allied to Dr Chee and his SDP) for not being transparent should note that the Qatar Investment Authority does not publish an annual report.

BTW, this lady has no MBA, she dropped out of uni. But she advises the Qataris. A lesson for our SWFs?

SMRT: Be innovative, not stupid

In Uncategorized on 03/07/2010 at 6:45 pm

So to increase capacity, SMRT plans to run buses along the same routes as its trains. I can say a lot abt this rubbish, but won’t.

SMRT should be pushing hard for employers to allow employees to start work earlier or later: flexi-time. Just as US utilities reduce their capital expenditure by persuading customers to cut their use of electricit, SMRT can do something similar.It can offer incentives to employers to change work hrs. To make sure SBS does not benefit, it should be a joint effort, and if competition laws are in the way, get the laws changed.

Or it can offer lower fares outside peak hrs, in the hope that employees will individually or via their unions negotiate flexi-hours.  Lesser pay rises if start and finish times are outside the standard times.

And ask the government for a subsidy if it is true that at peak hrs, trains are running are near full capacity. Its the “FT is best policy” of govmin that helps cause the problem of overcrowding.

MM’s kind of FT?

In Uncategorized on 03/07/2010 at 8:31 am

MM was complaining that FTs pick up S’poreans’ bad habit of refusing to breed more than one per marital team (Err who was ultimately responsible for “Stop at two” breeding policy?)

So someone should be heading to Gaza to bring in this man?

82-year-old Abu Talal al-Najar says he has more than 430 grandchildren.

He also has some 30 children and has racked up some 11 wives over the years. Currently he only has four …

The youngest of his current four wives is about 50 years younger than him.

As to when the father of 30 might call it a day, he chuckles. “I still think I could manage another 10 or 15 kids.”


I’m sure Israel would not mind.

Footie: Where are China’s stars

In Uncategorized on 03/07/2010 at 6:13 am

Wonder why China is so bad at footie? Is it because central planning is not suited for grooming footie stars, or is it because mums don’t do soccer?


Mkts: Death crosses?

In Uncategorized on 02/07/2010 at 10:50 am

Tokyo and FT have death crosses or double crosses, DJ and S&P crosses are a’coming. BBC Online story.

Update 3 July

But dark crosses have signalled four of the past two US bear markets, and five of the past two Japanese bear markets, FT’s Lex reports.

Parkway: Broker valuations

In Uncategorized on 02/07/2010 at 6:08 am

Kim Eng has put a value of S$4.03, while an Indian broker, Karvy Stock Broking,  has come up with S$4.20.

Remember India has bid S$3.80 while the cheapo Malaysians are bidding S$3.78, for only 51%.

At the moment, India is ahead by several goals.

Update 3 July

DMG Sec analyst has kindly reminded that the M’sians paid S$4 a share for their stake.

IskandarLand: Arabs not keen

In Malaysia on 02/07/2010 at 5:39 am

Much of the early effort was focused on attracting investors from the Middle East, especially for the Medini financial hub, where major investors include Mubadala Development, the Abu Dhabi government investment company; Aldar Properties, an Abu Dhabi real estate developer; and Kuwait Finance House, a Kuwaiti bank.

But after Damac Properties, one of the biggest real estate developers in Dubai, pulled out of Puteri Harbor, a waterfront and marina project in Nusajaya, Iskandar Investment changed tacks [sic]. NYT article

Glad that TLC and GLCs are not investing here then, if Arabs refuse to invest why shld we? Temasek has a j/v with Khanazah to do something but it is early days yet.

This is the only significant S’porean investment.

Norway’s SWF manager opens office

In Uncategorized on 01/07/2010 at 6:05 am

Norges Bank Investment Management (NBIM), manager of Norway’s Government Pension Fund Global, has opened a Singapore office,  to be closer to its Asian investments it said.  It is the second Asian office of the fund manager. It has an office in Shanghai. The fund is the world’s most transparent SWF and pays “peanuts”, but in the crisis outperformed GIC, Temasek, and others.

Shows S’pore is still a major East Asian financial centre despite being overshadowed by Shanghai and HK when it comes to listings, and KL when it comes to Islamic finance.

Update — Story rewritten from original. Too many silly mistakes in original. Sorry.

Russians prefer HKEx

In Uncategorized on 01/07/2010 at 5:25 am

FT reports Renaissance Capital, the Moscow-based investment bank, is opening an office in Hong Kong in expectation that a wave of Russian companies will choose to sell shares in the city.

The move comes five months after Rusal, the aluminium group controlled by Oleg Deripaska, became the first Russian company to list on the Hong Kong stock exchange.

“There are a lot of large Russian companies looking at Hong Kong as a destination for a listing,” said Jeremy Sparrow, chief executive of RenCap’s Hong Kong office, the bank’s first in Asia.

“We’re going to encourage as many companies from emerging markets, primarily in resources and oil and gas, to come and look at Hong Kong,” he said. Mr Sparrow said clients were seeking to tap deeper pools of cash in China as the “apex” of financial markets began to move east from traditional centres in the west still struck by crisis. “It’s where the money is,” he said.

According to PwC, Hong Kong last year overtook London and New York as the world’s biggest centre for flotations, with companies raising about $32bn through initial public offerings.

SGX has no excuse missing out on Russians to HKSx.