GIC invests $14 billion in Swiss bank UBS

last SG · 2007-12-12T22:13:51+00:00

i'm thinking of buying some UBS shares, what do u folks think?I asked for advice at www.secondopinion.asia and was told they do not advise on specific stocks...

walesa SG

Apparently, I'm exposed to all sorts of flagrant economic theories with the most absurd coming from the resident drone who reckons all long term investments are worthwhile so long as you aren't waiting to cash out desperately... Laughing

eagle SG

Maybe he made a long term investment into a bubble tea shop long ago

CX SG

Haha... I remember that one... the franchise for Quickly was going for something like... $30K or something...

Its just bizarre how pple thought it was a sustainable business model back then... Spend your life savings on a franchise where there's an outlet in every other street Mr. Green needless to say, they cannibalized each other

CX SG

So please enlighten us... why is it such a bad idea?

walesa SG

Why don't you extol the merits of such a good idea then?

Spartans SG

OMG the male chauvinistic pig is here. I thought you only know how to discriminate the female gender.

CX SG

I've already said my piece before. I think its not a bad idea because despite its recent losses due to collateralised debt obligations, its wealth management business is still first rate.

They probably need to re-look their investment banking operations and risk-management model but fundamentally, its a good long term bet.

Its share value will probably rebound and it will ultimately (after 2 years) leave GIC with a stake in one of the world's most well known bank.

Prince Alwaleed bin Talal is the 13th richest man in the world today because of a strategic investment in Citigroup in the 1990s at a time when the bank faced difficulties.

So please... What is your alternative view?

walesa SG

Given your selective amnesia, you may wish to scroll through this thread again for my take on the collective actions taken by the Fed Reserves, ECB and Bank of England with regard to the cash infusion to address the woes of the subprime market.

Nevermind if its wealth management is first rate, the fact of the matter is the GIC's acquisition of its stake in UBS wasn't made at the most opportune moment.

CX SG

I do remember your point. I also replied that the cash infusion was done to let the economy have a "soft landing" and to maintain confidence in the banking system.

I also mentioned that I do not like the idea of bailing out greedy fund managers with taxpayers' money but I do see the negative implications on the economy if banks were to fail due to the subprime crisis.

In any case, UBS had come forward with what is by most measures, a pretty forthright account of their subprime exposure and the write-down appears sensible and logical. As of now, it does not appear that UBS is attempting an Enron.

As for timing, the timing was not chosen by GIC... GIC was approached by a bank in need of a cash infusion. Were the terms likely to get any better if GIC sat back and bargained? Or would they simply bring their offer to the Chinese or the Arabs who are also flush with cash?

CX SG

Its none of my business indeed... Though it is my observation that you do not listen so the point is moot.

As for shutting other pple up, I suppose u'll like a forum where u just talk to yourself then? Laughing

My life is just fine, thank you very much.

walesa SG

The point is obviously moot to someone whose idiocy supercedes his inability to comprehend what's being said. Perhaps, talking to yourself would suit you fine given your inclination for mindless hypocrisy... Laughing

walesa SG

Oh well...it must be some bout of amnesia you're having to be enquiring about something which you claim to have already taken note of. Laughing

What parallels are there between UBS and Enron, really? Rolling Eyes Are you going to bring in AT&T as well? Laughing

Put it this way. If I approached you and offered you SGD1 for USD2, would you do a deal with me? So on what basis should you exonerate what is effectively, at best, an oversight on the part of an investment whose subsequent worth has done nothing but depreciate?

CX SG

And why is it such a bad deal? Your illustration is not clear. Perhaps u might want to relate it directly to the subject at hand?

Why is the GIC-UBS deal an "SGD1 for USD2" deal?

Is the 9% stake offered in one of the world's most well known bank worth so little?

Also, your insults are meaningless to me. Merry Christmas by the way.

walesa SG

What business is it of mine should you prove incapable of comprehending what I am driving at? Coming from someone trying to draw parallels between UBS and Enron, it certainly makes for a humorous paradox.

Oh, and it's no business of yours if I choose that as my mode of expression, is it? Laughing As a matter of fact, I'm just stating what proves an appropriate description of you - if you choose to regard it as an insult and can't live with it, tough. Mr. Green

CX SG

so... your business here is to come in here, present an outlandish and incomprehensible point of view, declare that everyone else is wrong and those who do not see your point are stupid...

Have fun. And Merry Christmas.

walesa SG

My business is none of yours for a start. Laughing

So why should a shallow "loser" capable of nothing better than mindless harp and indulging in hypocrisy of the highest order even bother?

CX SG

so u come here to talk about things that are of "no one's business", u do not explain when pple have questions but u nevertheless believe that u're right and everyone else is wrong...

U personify pointlessness Rolling Eyes

Daddy!! SG

Merrill Lynch Raises Up to $6.2B
Monday December 24, 11:33 am ET
By Joe Bel Bruno, AP Business Writer
Merrill Lynch Raises Up to $6.2B As It Sells Stake in Itself to Singapore Investment Fund

NEW YORK (AP) -- Merrill Lynch & Co., facing steep losses from mortgage-related investments, said Monday it will receive a cash infusion of up to $6.2 billion from Singapore's Temasek Holdings and U.S. money manager Davis Selected Advisors.

ADVERTISEMENT
The investment will help shore up Merrill's balance sheet, as the world's largest brokerage faces steep losses amid the global credit turmoil. Deteriorating mortgage-related investments and corporate loans caused the biggest loss in Merrill's 93-year history during the third quarter, as it suffered $8.4 billion of writedowns.

Temasek, a government-sponsored investment fund, pledged up to $5 billion and New York-based Davis Advisors will buy $1.2 billion of Merrill stock. The deal is the latest in which an ailing U.S. investment bank has turned overseas for additional capital.

John Thain, who took over as Merrill's chief executive on Dec. 1, pledged to solidify the company's financial position when he came on board. As part of that program, he also announced Monday the sale of Merrill's commercial finance business to General Electric Co.'s finance arm for an undisclosed price.

"One of my first priorities at Merrill Lynch was to strengthen the firm's balance sheet, and we have made great progress toward that by bolstering our capital position through these investments and our announced sale of Merrill Lynch Capital," he said in a statement.

Temasek will acquire $4.4 billion in Merrill Lynch common stock, and has the option to purchase an additional $600 million by March 28. The investment is for no more than 10 percent of the common stock, and Temasek will not have a seat on Merrill's board.

Temasek has a track record of making large investments in financial institutions, and has major holdings in Britain's Standard Chartered PLC and South Korea's Hana Financial Group. The fund was set up in 1974 to manage Singapore's assets, and now controls a portfolio of over $100 billion worth of investments.

Davis Advisors is a closely held company that was founded by former Bank of New York executive Shelby M.C. Davis. The investment was described by Merrill Lynch as being "long term."

The investment could not come at a better time for Merrill Lynch, which some analysts believe might have another $10 billion of writedowns coming in the fourth quarter from its battered mortgage-backed securities portfolio. Global banks have written down an estimated $105 billion this year alone from exposure to subprime loans and other debt commitments.

That has caused a number of financial companies to secure deals involving infusions from state-owned sovereign funds -- mostly from Asia and the Middle East -- in recent months. Government-sponsored investment vehicles have invested about $25 billion in Wall Street since the mortgage crisis began this summer.

Morgan Stanley last Wednesday announced a $5 billion investment from China's government-controlled investment vehicle to help replenish its capital.

In October, Bear Stearns Cos. agreed to a $1 billion investment from China's government-controlled Citic Securities Co. Citigroup Inc. received a $7.5 billion capital infusion from the investment arm of the Abu Dhabi government last month.

UBS AG last week announced that the Government of Singapore Investment Corp., the city-state's other state investment fund, is investing $9.75 billion for a 9 percent stake in the Swiss banking company.

Shares of Merrill Lynch fell 33 cents to $55.21 in morning trading.

AP Business Writer Stephen Bernard in New York contributed to this report.

walesa SG

Is it even viable to explain something blatantly to a loser (it's anyone's guess why would a loser indulge in the company of other alleged losers to begin with Laughing ) who has a knack of drawing wild parallels between distinctly irrelevant entities?

Pointlessness? That's what you're a perfect epitome of. Mr. Green For someone who first extols the virtues of the rights to the freedom of expression in defence of his views to cry foul in response to seemingly different and diverse views exercised as a freedom of expression by others smacks of hypocrisy of the highest order, doesn't it? Laughing Or is that salient point even loss in your incapacitated mind? Rolling Eyes

teraexa SG

I think we have to give GIC some due credit when it's due.

No doubt this is not the most opportune moment to invest in banks, but hey, please do tell me when is the most opportune moment then?

It's easy to pinpoint that moment on hindsight but in the flow of time, how do you know that the chance has not passed?

Besides, UBS wasn't as severely affected by the subprime crisis compared to other banks like Merill Lynch, Morgan Stanley and Bear Sterns. Buying a stake now when confidence is low is perhaps a good chance to press the price down a little. Why not try rewinding 2 years back and see if GIC could have gotten the same stake for this amount of money.

Sometimes let's face it, we should not oppose for the sake of opposing. Don't get me wrong by labelling me as an administration boot-licker. I, for one, feels that the current administration has some way to go before I am satisfied with them. However, with regards to this action, I think it is a good move. It may not necessarily be the best move, but hey, sometimes searching for the global optimum is way too tedious and time consuming compared to just picking the local optimum.

If you are still dissatisfied with this action, why not propose your own course of action? If you feel that you can do better, by all means, do it. I will applaud and give you due credit if you produce the desired results.

« Previous Page Next Page »