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Coffeeshop Chit Chat - LCB&PAPee 1stClass Savvy Investors? </TD><TD id=msgunetc noWrap align=right>
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March 6, 2010 by admin
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Written by Our Correspondent
According to a report in Wall Street Journal, the Government of Singapore Investment Corp. (GIC) has incurred a paper loss of $5 billion or about S$7.2 billion dollars on its investment in Swiss bank UBS after its notes are converted to shares yesterday.
While the disastrous loss made headlines worldwide, it was not reported by the Singapore media yet.
In 2007, GIC acquired a 9% stake in UBS through convertible notes on a fixed coupon of 9% per annum with a two-year maturity period.
It was revealed by Bloomberg a few days ago that GIC took only 3 days to make the decision to invest in UBS:
“Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec. 6, 2007, and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time,” Bloomberg reported.
[Source: Bloomberg, 1 March 2010]
Deputy Chairman of GIC Dr Tony Tan said then in a statement that GIC had “confidence in the long-term growth potential of UBS’s business, particularly in the global wealth management business”.http://www.temasekreview.com/wp-admin/#_ftn2
The future of UBS looks bleak as it continues to be embroiled in a protracted court case with the U.S. government over the release of confidential information of its U.S. clients who are being suspected for tax evasion.
GIC’s Chairman Lee Kuan Yew also appeared to be unfazed by the prospect of an impending UBS collapse. In an interview with Channel News Asia last year, he said:
“When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.”
[Source: CNA, 6 Feb 2009]
Set up in 1981 to manage Singapore’s reserves, GIC has been headed ever since by Singapore’s octogenarian leader Lee Kuan Yew, who is a lawyer by training. His daughter-in-law Ho Ching is the CEO of Singapore’s other sovereign wealth fund Temasek Holdings.
This is not the first time that GIC has suffered such a tremendous loss in its investment. A Wall Street Journal article published in September last year reported that GIC may have suffered a loss around 59 billion Singapore dollars (US$41.6 billion) in the fiscal year ended March. (read article here)
In other countries, such a loss would have lawmakers calling for an independent Board of Inquiry to investigate what’s wrong. The issue was never raised in the recent parliamentary “debate”. Even if it is, it is highly unlikely that Singaporeans will get an answer from Finance Minister Tharman who once said that the system in Singapore is based on “trust”.
Till today, nobody knows how much reserves Singapore still has after the multi-billion dollars losses suffered by GIC and Temasek Holdings.
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March 6, 2010 by admin
Filed under Headlines
Leave a comment
Written by Our Correspondent
According to a report in Wall Street Journal, the Government of Singapore Investment Corp. (GIC) has incurred a paper loss of $5 billion or about S$7.2 billion dollars on its investment in Swiss bank UBS after its notes are converted to shares yesterday.
While the disastrous loss made headlines worldwide, it was not reported by the Singapore media yet.
In 2007, GIC acquired a 9% stake in UBS through convertible notes on a fixed coupon of 9% per annum with a two-year maturity period.
It was revealed by Bloomberg a few days ago that GIC took only 3 days to make the decision to invest in UBS:
“Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec. 6, 2007, and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time,” Bloomberg reported.
[Source: Bloomberg, 1 March 2010]
Deputy Chairman of GIC Dr Tony Tan said then in a statement that GIC had “confidence in the long-term growth potential of UBS’s business, particularly in the global wealth management business”.http://www.temasekreview.com/wp-admin/#_ftn2
The future of UBS looks bleak as it continues to be embroiled in a protracted court case with the U.S. government over the release of confidential information of its U.S. clients who are being suspected for tax evasion.
GIC’s Chairman Lee Kuan Yew also appeared to be unfazed by the prospect of an impending UBS collapse. In an interview with Channel News Asia last year, he said:
“When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up.”
[Source: CNA, 6 Feb 2009]
Set up in 1981 to manage Singapore’s reserves, GIC has been headed ever since by Singapore’s octogenarian leader Lee Kuan Yew, who is a lawyer by training. His daughter-in-law Ho Ching is the CEO of Singapore’s other sovereign wealth fund Temasek Holdings.
This is not the first time that GIC has suffered such a tremendous loss in its investment. A Wall Street Journal article published in September last year reported that GIC may have suffered a loss around 59 billion Singapore dollars (US$41.6 billion) in the fiscal year ended March. (read article here)
In other countries, such a loss would have lawmakers calling for an independent Board of Inquiry to investigate what’s wrong. The issue was never raised in the recent parliamentary “debate”. Even if it is, it is highly unlikely that Singaporeans will get an answer from Finance Minister Tharman who once said that the system in Singapore is based on “trust”.
Till today, nobody knows how much reserves Singapore still has after the multi-billion dollars losses suffered by GIC and Temasek Holdings.
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