http://temasekreview.com/?p=11733
Temasek’s big blunder as BOA and Barclays rebound
August 7, 2009 by admin
Filed under Top News
Leave a comment
From our Correspondent
The mouth-piece of the ruling party, the Straits Times has declared unilaterally today that the state Sovereign Wealth Fund, Temasek Holdings has “recouped a big part of its portfolio losses since a low point in March”. (read full article here)
In an lengthy editorial splashed on the front page, the Straits Times tried desperately to exonerate Temasek’s beleaguered CEO Ho Ching from any blame in the investment losses by hailing her decisions to purchase financial heavyweights such as India’s ICICI Bank, China Construction Bank and Standard Chartered Bank.
The Straits Times “findings” show that much of Temasek’s gains since the end of March have been driven by its exposure to financial firms:
“Take DBS Group Holdings, which has rallied 64.3 per cent during the four-month period. Temasek, which owns 27.8 per cent of the local lender, made a paper gain of more than $2 billion as a result.
Then there is Bank of China, which has surged 50.2 per cent and contributed around US$1.7 billion (S$2.4 billion) in gains to Temasek’s portfolio. The Singapore firm has a 13.8 per cent stake in the Chinese bank.”
However, the Straits Times is surprisingly muted on the share prices of Bank of America and Barclays which have since rebounded.
Temasek under Ho Ching bought shares in Merrill Lynch (later sold to Bank of America) and Barclays at a high last year before selling them at a low somewhere in mid-March this year leading to a catastrophic loss of a few billion dollars.
Temasek’s loss on BoA alone is estimated around US$4.6 billion, or roughly US$1,000 for every single Singaporean citizen. (Source: Asian Sentinel)
Let’s take a look at the stock prices of Bank of America and Barclays during the past six months:
A simple calcuation shows that the stock value of Bank of America has increased by more than 200%.
Source:
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=BAC&CP=0&PT=5
Again, the value of Barclays has also surged more than 300% since Temasek sold off its entire stake in March.
Source: http://www.lse.co.uk/ShareChart.asp?sharechart=BARC
The Abu Dhabi government-owned International Petroleum Investment Company (IPIC), who bought Barclays shares at around the same time as Temasek, made a hefty profit of $USD 2.5 billion dollars when it sold off its stake in June (Source: Reuters)
Temasek’s recent gain in its portfolio is due largely to the rebound in the global economy and should not be used to vindicate its over-exposure in the financial markets.
[As correctly pointed out by some readers, its "gains" as trumpeted by the Straits Times are unrealized gains while the losses it suffered has crystallized with the untimely sale of BOA and Barclays at a low]
Furthermore, it should not be used to excuse the Temasek’s Board for blunders such as the ill-timed purchase and sale of BOA and Barclays, the dissolution of Australia’s ABC Learning and the investment in the much maligned Shin Corp, none of which it has been held accountable for so far.
Had Temasek held on to the BOA and Barclays shares for a few months longer instead of selling them hastily to finance the purchase of stakes in Asian banks such as China Construction Bank, it will definitely have “recouped” a far “bigger” portion of its portfolio losses.
Unless the Temasek board comes clean with Singaporeans on its series of questionable investment decisions made in the last few months, it will fail to convince a sceptical public about the competency, experience and leadership of its senior management.
After all, Temasek derives its funds entirely from taxpayers’ monies. It is neither a “private” investment vehicle or a commercial outfit. It belongs to the people of Singapore and therefore the citizens have a say in the choice of the leadership.
Based on Ho Ching’s less than stellar performance at the helm of Temasek, a change in leadership is urgently needed to prevent more “negative wealth” from being added to its asset value.
EDITORS’ NOTE:
Please help counter ST’s propaganda by forwarding the URL of this article to everybody you know.
Temasek’s big blunder as BOA and Barclays rebound
August 7, 2009 by admin
Filed under Top News
Leave a comment
From our Correspondent
The mouth-piece of the ruling party, the Straits Times has declared unilaterally today that the state Sovereign Wealth Fund, Temasek Holdings has “recouped a big part of its portfolio losses since a low point in March”. (read full article here)
In an lengthy editorial splashed on the front page, the Straits Times tried desperately to exonerate Temasek’s beleaguered CEO Ho Ching from any blame in the investment losses by hailing her decisions to purchase financial heavyweights such as India’s ICICI Bank, China Construction Bank and Standard Chartered Bank.
The Straits Times “findings” show that much of Temasek’s gains since the end of March have been driven by its exposure to financial firms:
“Take DBS Group Holdings, which has rallied 64.3 per cent during the four-month period. Temasek, which owns 27.8 per cent of the local lender, made a paper gain of more than $2 billion as a result.
Then there is Bank of China, which has surged 50.2 per cent and contributed around US$1.7 billion (S$2.4 billion) in gains to Temasek’s portfolio. The Singapore firm has a 13.8 per cent stake in the Chinese bank.”
However, the Straits Times is surprisingly muted on the share prices of Bank of America and Barclays which have since rebounded.
Temasek under Ho Ching bought shares in Merrill Lynch (later sold to Bank of America) and Barclays at a high last year before selling them at a low somewhere in mid-March this year leading to a catastrophic loss of a few billion dollars.
Temasek’s loss on BoA alone is estimated around US$4.6 billion, or roughly US$1,000 for every single Singaporean citizen. (Source: Asian Sentinel)
Let’s take a look at the stock prices of Bank of America and Barclays during the past six months:
A simple calcuation shows that the stock value of Bank of America has increased by more than 200%.
Source:
http://moneycentral.msn.com/investor/charts/chartdl.aspx?Symbol=BAC&CP=0&PT=5
Again, the value of Barclays has also surged more than 300% since Temasek sold off its entire stake in March.
Source: http://www.lse.co.uk/ShareChart.asp?sharechart=BARC
The Abu Dhabi government-owned International Petroleum Investment Company (IPIC), who bought Barclays shares at around the same time as Temasek, made a hefty profit of $USD 2.5 billion dollars when it sold off its stake in June (Source: Reuters)
Temasek’s recent gain in its portfolio is due largely to the rebound in the global economy and should not be used to vindicate its over-exposure in the financial markets.
[As correctly pointed out by some readers, its "gains" as trumpeted by the Straits Times are unrealized gains while the losses it suffered has crystallized with the untimely sale of BOA and Barclays at a low]
Furthermore, it should not be used to excuse the Temasek’s Board for blunders such as the ill-timed purchase and sale of BOA and Barclays, the dissolution of Australia’s ABC Learning and the investment in the much maligned Shin Corp, none of which it has been held accountable for so far.
Had Temasek held on to the BOA and Barclays shares for a few months longer instead of selling them hastily to finance the purchase of stakes in Asian banks such as China Construction Bank, it will definitely have “recouped” a far “bigger” portion of its portfolio losses.
Unless the Temasek board comes clean with Singaporeans on its series of questionable investment decisions made in the last few months, it will fail to convince a sceptical public about the competency, experience and leadership of its senior management.
After all, Temasek derives its funds entirely from taxpayers’ monies. It is neither a “private” investment vehicle or a commercial outfit. It belongs to the people of Singapore and therefore the citizens have a say in the choice of the leadership.
Based on Ho Ching’s less than stellar performance at the helm of Temasek, a change in leadership is urgently needed to prevent more “negative wealth” from being added to its asset value.
EDITORS’ NOTE:
Please help counter ST’s propaganda by forwarding the URL of this article to everybody you know.
