Temasek sold Barclays stake, lost 1 b

Atobe SG

If the Private Sector wages are used as a benchmark for our Political Elites that take up Ministerial Posts - then it is only reasonable that the same "fiduciary responsibilities and accountability" practiced in the Private Sector should also be applicable too.

Unfortunately, it is simply politically inconvenient for MM LKY and his well paid underlings to submit themselves to this same standards.

AndrewPKYap SG

Take/profit from Singaporeans and lose to the ang mos..... PAP is foreigners sucking government.

eagle SG

UNCERTAINTY may have been one of the reasons behind Temasek Holdings' decision to sell off its stake in British bank Barclays in December and January despite the huge loss it would make, fund managers said on Thursday.

Reacting to reports that the state investment agency had offloaded its entire 2 per cent stake at an estimated loss of 500 million pounds to 600 million pounds (S$1.2 billion to S$1.4 billion), they said Temasek could have been concerned that Barclays would be nationalised by the British government.

Nationalisation would have made the shares almost worthless and was 'one of the fears that all investors had at the time', said Mr Wong Kok Hoi, chairman and chief investment officer of APS Asset Management.

'There was extreme concern about the viability of the banks. Most Western banks were technically bankrupt.'

Other analysts noted that Barclays was facing potential cash calls at the time, which would have forced existing investors to pay up to keep the bank solvent.

Fund managers offered other suggestions as to why Temasek sold the shares in the volatile December-January period, when the shares swung from 47.3 pence to 190.6 pence. On Wednesday, they closed at around 260 pence.

Temasek paid 720 pence a share or 975 million pounds for its Barclays stake in July 2007. The purchase was meant to help Barclays take over Dutch bank ABN Amro in a deal that would have created the world's No. 6 bank by market value.

But Barclays eventually lost out to a consortium led by the Royal Bank of Scotland. A few weeks later, the sub-prime crisis surfaced, and Temasek lost &pound150 million on its Barclays investment in just a month, reports said then.

If Temasek had hung on, its paper losses would have been trimmed in the recent market rally. Reports say the Abu Dhabi-based International Petroleum Investment Co made a windfall profit of US$2.5 billion (S$3.6 billion) on its Barclays investment after seven months.

But it would have been impossible for Temasek to know back then that the markets would rebound, said fund managers

eagle SG

Short term wise, they have definitely made a lot of wrong moves.... like a gambler, a punter, certainly not like what a long term investor should behave

But.... let's hope 20 years down the road, we look back and see that it was a brillant move.... Cuz.... Market could possibly come down by around Sep to Dec to retest the lows of March, and perhaps even break the lows to be lower....

But then again.... I doubt Temasek would ever be able to wipe off this shame.... I mean.... me and colleagues and friends as new players who do not have the resumes of top brass in TH, can still make a little bit... know not to panic sell off in March.... how come TH sell off???

Ah Chia SG

June 5, 2009

From The Newsroom Room

The Straits Times has swung into full damage control mode to limit the fallout from Temasek’s disastrous sale of its stake in Barclays Bank which may cause it to lose up to 500 million pounds or more.

This is in stark contrast to the Abu Dhabi-based International Petroleum Investment Co made a windfall profit of US$2.5 billion (S$3.6 billion) on its Barclays investment after seven months.

As usual, none of the Temasek executives, including its CEO and wife of Prime Minister Lee, Madam Ho Ching, are called upon to account for Temasek’s decisions.

Instead, it is left to the spin doctors at SPH to extricate Temasek from its current quandrary, not that it will ever be made to pay for its mistakes.

According to external analysts the Straits Times spoke to, ”uncertainty” may have been one of the reasons behind Temasek Holdings’ decision to sell off its stake in British bank Barclays in December and January despite the huge loss it would make.

Reacting to reports that the state investment agency had offloaded its entire 2 per cent stake at an estimated loss of £500 million to £600 million (S$1.2 billion to S$1.4 billion), they said Temasek could have been concerned that Barclays would be nationalised by the British government. (read article here)

What is the probability of Barclays being nationalized?

If this is indeed high, why did Abu Dhabi investment corp decide to pour in a few billion dollars into the beleaguered U.K bank 7 months ago in the midst of the economic turmoil?

Apparently, Temasek executives are not aware of this report by The Times on 22 January 2009:

Abu Dhabi has cleverly purchased “insurance” for itself when a stake in Barclay to minimize the risk of nationalization by the British government.

[Source: The Times]

Even if the Barclays were to be nationalized, the British government would have to pay a price above the market value to acquire the shares from Abu Dhabi, thereby ensuring that the latter will not suffer a loss.

Did Temasek insist on this clause being added to the contract when it purchase a 2% stake in Barclays then?

Why did Temasek cash out so soon when it is obvious that the Barclays is unlikely to be nationalized as long that Abu Dhabi continues to hold stakes in it?

The political fallout from any possible deal at the expense of taxpayers will certainly crippled the Labor government led by Gordon Brown which is facing a backlash from the voters.

Then again, the political repercussions are of significance in the United Kingdom where a relatively free media, educated electorate and robust opposition ensure that the government is held accountable to its actions.

In Singapore, Temasek can afford to lose BILLIONS of dollars without anybody taking responsibility for it. Somehow, its CEO can still “ya-ya”, claimed she has “no regrets” and is given a “May Day Award” by NTUC!!!

http://wayangparty.com/?p=10099

charlize SG

Maybe people need to ask if they sold off their citibank stake too.

BoA and the Barclay investments were all sold off quietly in the past few months.

Maybe they did they same thing for their citi stake too.

deepak.c SG

Central government cannot make proper investment decisions, just like the central planned governments (production) of Russia and China past.

youyayu SG

world class government but always making wrong decision with the people money.

so whats the point

deepak.c SG

Maybe people need to ask if they sold off their citibank stake too.

BoA and the Barclay investments were all sold off quietly in the past few months.

Maybe they did they same thing for their citi stake too.

Maybe if they lose alot of money on the Citibank stake, they can state that they didn't lose as much as their Merrill Lynch turned BoA investment. Which might be a good thing depending on how you look at it, afterall you didn't lose as much as the other investment, it should be a good thing.

angel7030 SG

Short term wise, they have definitely made a lot of wrong moves.... like a gambler, a punter, certainly not like what a long term investor should behave

I dun understand why Temasek have recent times keep making the wrong move. Why they dun look at Asia stocks such CHina or India rather than the west? Is it that they get burnt by China oil and thai tomyam line that they thot asia is not safe?? Even laywomen like me also gain abit in asia stocks by using grandma name (tax free)

charlize SG

I think those ah ma and ah peks who bought stocks these past few months made more money percentage wise than TH by buying low and selling high.

deepak.c SG

Temasek's investment philosophy, buy high, sell low.

It's Philanthropic Investing.

Old man is not known for being a benevolent dictator outside SG for nothing, he lives up to his title.

charlize SG

Temasek's investment philosophy, buy high, sell low.

It's Philanthropic Investing.

Talk about redistribution of wealth.

Ah Chia SG

Old man is not known for being a benevolent dictator outside SG for nothing, he lives up to his title.

He is now overseas, don't dare to show face in Singapore.

deepak.c SG

Talk about redistribution of wealth.

He taxes Singaporeans hard, then redistribute wealth to the poorer countries. He is a man that commands respect.

charlize SG

He is now overseas, don't dare to show face in Singapore.

I think he needs to come out again with another public statement about these recent divestments to pacify the public.

But got to wait until he comes back to sg first.

Ah Chia SG

SINGAPORE -- The Singapore opposition would ruin the wealthy city-state’s achievements in five years if they ever gained power, the country’s founding father Lee Kuan Yew

Should this happen, “I think all bets are off because in five years they (opposition) can ruin this place,” he told delegates at an international forum late Wednesday.

He stressed that, unlike many other countries, Singapore did not have natural resources such as oil, gas, forests, timber and aluminum.

“When you are Singapore and your existence depends on performance — extraordinary performance, better than your competitors — but that performance disappears because the system on which it is based is eroded, then you’ve lost everything.”

http://www.chinapost.com.tw/asia/singapore/

deepak.c SG

He is now overseas, don't dare to show face in Singapore.

Using public funds for private tours? You don't see other world leader making so many tours to other countries.

During all these discussion with foreign leaders. I wonder what was concluded? Or they merely shake hands, have dinners, tour the country and delight themselves by bootlicking each other.

Anything discussed and signed for all these visits?

angel7030 SG

I think those ah ma and ah peks who bought stocks these past few months made more money percentage wise than TH by buying low and selling high.

ah mas and ah peks very hardworking ok, earlier earlier morning at SGX looking at stocks liao, TH executives still sleeping.

Ah Chia SG

delight themselves by bootlicking each other.

Prasie each other until song song I think, suck each other's cock.

Brown: You Lee Kuan Yew is a wise man, has a lot of wisdom.

Lee: Your performance not bad in Britain. Very shrewd you.

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