<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Oei Hong Leong bets on AIG for LKY School
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WHO dares wins, works as a motto for Britain's elite SAS forces and it is likely to work wonders for the Lee Kuan Yew School of Public Policy, thanks to a bold share market gamble by tycoon Oei Hong Leong.
Mr Oei bought one million American International Group (AIG) shares on Tuesday when the stock was in freefall and many investors were bailing out of the giant insurer.
He told The Straits Times that he will donate the shares, which have already shot up in value, to the school to mark Minister Mentor Lee Kuan Yew's 85th birthday, which fell on Tuesday.
Mr Oei's gambit on Tuesday was about as daring as you can get given the onslaught of bad news swirling around AIG.
'I had a gut feeling,' he said.
But it was still a nerve-wracking day. AIG shares lost as much as 70 per cent on the opening bell on Wall Street to plunge to US$1.25 before swiftly ratcheting upwards.
Mr Oei bought in on the upswing and landed his parcel for US$1.80. By the close of trading they were more than double that - US$3.75.
Yesterday, the shares opened at US$3.10, though they weakened later to US$2.
Mr Oei's gamble was not based only on a gut feeling. He looked hard at the unfolding AIG crisis and calculated that the firm was just too big and important to be allowed to fail.
AIG insures a wide range of products with many different counterparties, which likely promoted the US government to step in yesterday with a US$85 billion bailout.
Mr Oei was also confident of AIG's financials. 'Unlike an investment bank, which does not have many assets and acts like traders, insurance companies have more assets and have quite a conservative policy towards accounting for them,' he reasoned.
But while the AIG deal paid off, Mr Oei believes the financial turmoil represents 'only the end of the beginning'.
It is not just the sub-prime mortgage market which is at risk but all mortgages as property prices are falling while US unemployment is rising, he said.
'The game is over. Banks don't trust each other and won't even lend to each other. They find it difficult to raise capital because the big investors are not willing to fund them anymore. Soon they will have to cut their asset portfolios and sell their assets to raise funds, so it will be a bloodbath.'
Last week, Mr Oei donated $2 million to the NextGen Leadership Foundation. The scheme, which encourages young people to lead grassroots or welfare organisations, was unveiled last month by Senior Minister Goh Chok Tong. LEE SU SHYAN
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->WHO dares wins, works as a motto for Britain's elite SAS forces and it is likely to work wonders for the Lee Kuan Yew School of Public Policy, thanks to a bold share market gamble by tycoon Oei Hong Leong.
Mr Oei bought one million American International Group (AIG) shares on Tuesday when the stock was in freefall and many investors were bailing out of the giant insurer.
He told The Straits Times that he will donate the shares, which have already shot up in value, to the school to mark Minister Mentor Lee Kuan Yew's 85th birthday, which fell on Tuesday.
Mr Oei's gambit on Tuesday was about as daring as you can get given the onslaught of bad news swirling around AIG.
'I had a gut feeling,' he said.
But it was still a nerve-wracking day. AIG shares lost as much as 70 per cent on the opening bell on Wall Street to plunge to US$1.25 before swiftly ratcheting upwards.
Mr Oei bought in on the upswing and landed his parcel for US$1.80. By the close of trading they were more than double that - US$3.75.
Yesterday, the shares opened at US$3.10, though they weakened later to US$2.
Mr Oei's gamble was not based only on a gut feeling. He looked hard at the unfolding AIG crisis and calculated that the firm was just too big and important to be allowed to fail.
AIG insures a wide range of products with many different counterparties, which likely promoted the US government to step in yesterday with a US$85 billion bailout.
Mr Oei was also confident of AIG's financials. 'Unlike an investment bank, which does not have many assets and acts like traders, insurance companies have more assets and have quite a conservative policy towards accounting for them,' he reasoned.
But while the AIG deal paid off, Mr Oei believes the financial turmoil represents 'only the end of the beginning'.
It is not just the sub-prime mortgage market which is at risk but all mortgages as property prices are falling while US unemployment is rising, he said.
'The game is over. Banks don't trust each other and won't even lend to each other. They find it difficult to raise capital because the big investors are not willing to fund them anymore. Soon they will have to cut their asset portfolios and sell their assets to raise funds, so it will be a bloodbath.'
Last week, Mr Oei donated $2 million to the NextGen Leadership Foundation. The scheme, which encourages young people to lead grassroots or welfare organisations, was unveiled last month by Senior Minister Goh Chok Tong. LEE SU SHYAN
