Singapore - GIC, Temasek & MAS 02 (Sep 09 - Jul 11)

[winston]

Temasek’s Mapletree Plans to List S$4 Billion REIT (Update1) By Simeon Bennett

Sept. 12 (Bloomberg) -- Mapletree Investments Pte, the property unit of Singapore’s Temasek Holdings Pte, said it plans to list a real estate investment trust in the city-state that may hold as much as S$4 billion ($2.8 billion) in assets.

The proposed Mapletree Commercial Trust will hold properties including Singapore’s biggest shopping mall, VivoCity; the PSA Building, which houses the nation’s port authority; and St James PowerStation, a nightspot, Sonny Phua, a Mapletree spokesman, said today in a telephone interview.

Mapletree plans to list the trust when yields on REITs fall to 5 percent from 8 percent now, Phua said. The company was preparing to sell shares in the REIT 18 months ago and deferred the plans as property prices fell amid the global recession, he said. Mapletree plans to proceed if markets continue to improve, he said.

“It would be an indication of some restoration of confidence,” said David Cohen, an economist at Action Economics in Singapore. “Developments of the last six months have been supportive of some increased risk-appetite compared to six months ago, and real estate would be an area that would benefit.”

Separately, Mapletree plans to start a private Vietnam property fund and a private Asian industrial property fund in the next 12 months, with between $500 million and $1 billion in each, Phua said. It recently closed another private fund holding about $1.7 billion of commercial properties in China, he said, adding the trust wants to add properties in India to the fund “quite soon.”

Investment Firm

“We are looking at retail, residential, offices and business parks in China and India,” Phua said. “Obviously these two economies have a lot of potential, and that’s why this fund is going into them.”

Mapletree wants to expand its portfolio of property assets to at least S$20 billion in the next three to five years, from about S$12 billion now, Phua said.

Temasek, Singapore’s state-owned investment firm, already has stakes in REITs through its CapitaLand unit, which has four listed property trusts.

Temasek, which is run by Ho Ching, the wife of Singapore’s Prime Minister Lee Hsien Loong, is also considering an initial share sale for PSA Corp., a unit of PSA International Pte, the world’s second-largest container port operator, Ho said Aug. 25.

Reduce Holdings

It may also list Fullerton Financial Holdings Pte, which invests in financial institutions in emerging markets, or Fullerton Fund Management Co., Temasek’s fund-management firm, to reduce its holdings in financial institutions, Ho said.

Temasek was initially set up in 1974 to support the development of Singapore’s banks, airlines and ports. It now holds stakes in financial services, real estate, telecommunications, energy and transportation companies in at least four continents.

The firm is the biggest shareholder in five of Singapore’s 10 biggest publicly traded companies by market value, including Singapore Telecommunications Ltd., Southeast Asia’s biggest phone company, and DBS, the region’s largest bank by assets.

Temasek said last month it plans to work closely with companies in which it owns stakes as overseas holdings increase, in the first change to its charter in seven years. The review reflects the fund’s transformation from a passive holder of stakes in government-controlled companies to an investor with more than two-thirds of its assets outside the country.

On Sept. 8 it agreed to sell Chartered Semiconductor Manufacturing Ltd., the world’s third-biggest maker of customized semiconductors, to Abu Dhabi for S$2.5 billion. It also controls 83.8 percent of Stats Chippac Ltd., Southeast Asia’s largest provider of chip-testing and packaging services.

http://www.bloomberg.com/apps/news?pid= ... iTzgIdxres

[winston]

Myanmar allegations highlight Singapore bank secrecy

AFP - Wednesday, September 16SINGAPORE (AFP) - - Allegations that Myanmar's junta is stashing billions of dollars in Singapore have thrown a spotlight on banking secrecy in the city-state, which strongly denies being a haven for hot money.

http://sg.news.yahoo.com/afp/20090916/t ... 9af05.html

[winston]

Update: Temasek recoups losses, eyes financials and resources

SINGAPORE - Singapore sovereign wealth fund Temasek's portfolio climbed 32 per cent between April to end-July this year, recovering much of its losses in the last financial year, as global markets rallied.

http://www.businesstimes.com.sg/sub/lat ... 91,00.html?

[financecaptain]

The return on this Citi thing is about 47% US$ (realised and unrealised). ST and BT have all made big deal about this.

Has it occured to you that if GIC has used this US$6.88 to acquire a more diversified equity portfolio across the globe, the total return would be similar or maybe better (because US$ has depreciated significantly against S$ during this time); and lower risk compared with taking a focussed or specific risk on Citibank ?

Originally, the reason to acquire Citi shares I understand was more strategic and long-term, very much like Khoo took a white knight stake in Standard Chartered Bank years ago. For this type of risk, returns are expected to be multiples. Why run away now by selling 50% ? Is it chao-de-fei, ho-sai-kai ? So original judegement was already a mistake ?

Are we therefore not damned lucky on this outcome for the risk we took ? ST ad BT really want you to believe that GIC and Temasek are gods of investments.

Straits Times 23 September 2009

THE Government of Singapore Investment Corp (GIC) has sold about half its stake in United States banking giant Citigroup over the last week, reaping a profit of US$1.6 billion (S$2.3 billion).

It plans to hold onto its remaining 4.9 per cent stake, which has a US$1.6 billion paper profit at current prices, GIC said in a statement on Tuesday.

The state investment firm sold shares amounting to a 4.5 per cent stake in Citi on the open market between Sept 11 and Monday. Citi shares traded at US$4.12 to US$4.61 in that period, having quadrupled since March as global stock markets rallied on increased investor confidence.

GIC said the sale was meant to trim its holdings in Citi to about 5 per cent - the stake it had originally intended to have.

'A stake below 5 per cent reflects GIC's goals and desire to be a portfolio investor,' it said. 'GIC will continue its investment in Citigroup as we are confident of its long-term prospects.' Including the paper gain, this means that GIC has made a profit of almost 50 per cent on its original investment in Citi 20 months ago, despite the bank's turbulent performance since then.

In January last year, GIC had invested US$6.88 billion in Citi, only to face a potential huge paper loss when Citi shares plunged to below US$1 apiece in March this year after the bank bled heavily in the financial crisis. At one point, GIC was staring at US$5.5 billion in potential unrealised losses, according to reports then.

GIC's happy ending is the result of two judgment calls that turned out to be the right ones, said GIC's chief investment officer Ng Kok Song on Tuesday.

The first was choosing to invest in a bank too big to fail. 'We had assessed that, in a crisis, Citigroup would receive US government assistance because of Citigroup's systemic importance in the US financial system,' he said. This proved true when the US government injected billions to rescue the beleaguered bank late last year.

The second good judgment call was in the kind of shares that GIC bought: perpetual convertible preferred stock, which paid quarterly dividends and could be converted into common stock. 'We did not invest directly in the common stock. We wanted some protection against downside risk because of the uncertain economic outlook,' said Mr Ng.

This meant that when Citi issued more shares to sell to the US government in return for the capital injection, severely diluting the stakes of common stock holders, GIC's stake was protected.

[Aspellian]

The return on this Citi thing is about 47% US$ (realised and unrealised). ST and BT have all made big deal about this.

Has it occured to you that if GIC has used this US$6.88 to acquire a more diversified equity portfolio across the globe, the total return would be similar or maybe better (because US$ has depreciated significantly against S$ during this time); and lower risk compared with taking a focussed or specific risk on Citibank ?

Originally, the reason to acquire Citi shares I understand was more strategic and long-term, very much like Khoo took a white knight stake in Standard Chartered Bank years ago. For this type of risk, returns are expected to be multiples. Why run away now by selling 50% ? Is it chao-de-fei, ho-sai-kai ? So original judegement was already a mistake ?

Are we therefore not damned lucky on this outcome for the risk we took ? ST ad BT really want you to believe that GIC and Temasek are gods of investments.

Election coming - have to balance left pocket's hole (Tmsk) with right pocket's gain (gic). if not how to answer to laymen>?

[helios]

Are we therefore not damned lucky on this outcome for the risk we took ? ST ad BT really want you to believe that GIC and Temasek are gods of investments.

yo Captain,

I heard that Temasek lifescience fund and portfolio are good; on the overall, they haven't lost serious money ... is this true?

But the fund size is smaller ...

[financecaptain]

Actaully have lost touch with their life sciences portfolios for a while.
All I can say is nothing much lost also nothing much gained so far. No big hits in this sector.
PE investments in lifesciences have not been hot in these few years. The in thing now is agri, resources and renewables. Maybe healthcare rather than lifesciences.

[winston]

It's the 80 / 20 rule that matters. If they are making good money on 80% of their portfolio ( and not losing alot on the other 20% ). then I think their shareholders would be quite happy ..

[financecaptain]

This guy also agrees that GIC is lucky. But includes other perspectives on this whole monkey show. US taxpayers actually helped to bail out our monies ... Obama thank you.

Thursday, September 24, 2009
Who is responsible for GIC's profit? (A tale of 2 news paper report.)

Who is responsible for saving GIC's hide? Lee Kuan Yew and his team of fund managers or Barrack Obama and his team of advisers? If the US govt decided not to approach GIC to convert to common stock in Feb, do you think they would have recouped their losses and managed a profit?

Their original conversion price was $26.35 not the $3.25 they received in Feb. The Straits Times is bragging that GIC had the foresight to invest in banks that were too big to fail. That is very dangerous- betting on what the Federal government decided to do instead of market and company fundamentals. GIC was lucky this time. But what about UBS? Is it making a profit?

GIC should thank their lucky stars that Lehman collapsed before Citi. The sudden collapse of Lehman made the Federal govt realise that they had to intervene and bailout the banks.

GIC was lucky to escape but will they learn anything out of this? No. Because they will remember this investment as a 'success' although they were just lucky.

A sample size of one is not really good enough to say that they made the right call. There are other failed financial investments that our sovereign wealth funds have engaged in.

Anyway, we Singaporeans should be grateful for Barrack Obama, a man who earns 8 times less than our PM.

Skeptic leaves you with 2 reports about GIC's profit to let you decide which report is biased. Who says I am not fair and balanced?
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Straits Times GIC profits from Citi stake
It makes US$1.6b from selling part of its holdings in US bank
By Fiona Chan

THE Government of Singapore Investment Corp (GIC) has sold about half its stake in United States banking giant Citigroup over the last week, reaping a profit of US$1.6 billion (S$2.3 billion). It plans to hold onto its remaining 4.9 per cent stake, which has a US$1.6 billion paper profit at current prices, GIC said in a statement on Tuesday. The state investment firm sold shares amounting to a 4.5 per cent stake in Citi on the open market between Sept 11 and Monday. Citi shares traded at US$4.12 to US$4.61 in that period, having quadrupled since March as global stock markets rallied on increased investor confidence.

GIC said the sale was meant to trim its holdings in Citi to about 5 per cent - the stake it had originally intended to have. 'A stake below 5 per cent reflects GIC's goals and desire to be a portfolio investor,' it said. 'GIC will continue its investment in Citigroup as we are confident of its long-term prospects.' Including the paper gain, this means that GIC has made a profit of almost 50 per cent on its original investment in Citi 20 months ago, despite the bank's turbulent performance since then.

In January last year, GIC had invested US$6.88 billion in Citi, only to face a potential huge paper loss when Citi shares plunged to below US$1 apiece in March this year after the bank bled heavily in the financial crisis. At one point, GIC was staring at US$5.5 billion in potential unrealised losses, according to reports then. GIC's happy ending is the result of two judgment calls that turned out to be the right ones, said GIC's chief investment officer Ng Kok Song on Tuesday.

The first was choosing to invest in a bank too big to fail. 'We had assessed that, in a crisis, Citigroup would receive US government assistance because of Citigroup's systemic importance in the US financial system,' he said. This proved true when the US government injected billions to rescue the beleaguered bank late last year. The second good judgment call was in the kind of shares that GIC bought: perpetual convertible preferred stock, which paid quarterly dividends and could be converted into common stock.

'We did not invest directly in the common stock. We wanted some protection against downside risk because of the uncertain economic outlook,' said Mr Ng. This meant that when Citi issued more shares to sell to the US government in return for the capital injection, severely diluting the stakes of common stock holders, GIC's stake was protected.

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The Wall Street Journal Citi bailout also bails out Singapore fund
Wednesday, 23 September 2009
Rick Carew, P.R. Venkat & Costas, Paris

GIC had big loss before latest U.S. rescue. Now it has $1.6 billion profit and half the stake Government of SingapoThe third bailout of Citigroup Inc. proved the charm for a Singaporean sovereign-wealth fund. Government of Singapore Investment Corp. said Tuesday that it took in a $1.6 billion profit by selling about half of its holdings in Citigroup since converting its holdings from preferred shares to ordinary shares earlier this month. The sovereign fund's remaining holdings are now below 5%. Citigroup and AIG pace led a renewed rally in the U.S. financial sector Tuesday, earning some paper profits for taxpayers, who are the largest investors in both battered companies. MarketWatch's Alistair Barr reports from San Francisco.

The reversal of fortune for GIC's January 2008 investment of $6.9 billion into Citigroup is due to a sweetening of terms it won from the U.S. government as part of a bailout package negotiated in February 2009. GIC and other sovereign investors gave up their 7% annual coupon payment on the preferred shares and moved lower in Citigroup's capital structure. In exchange, Citigroup reduced the conversion price of GIC and other investors' shares to $3.25 a share from the $26.35 conversion price they had agreed in the original deal.

That move carried its risks as Citigroup's stock teetered around the $1 mark in early March of this year and GIC's holdings fell in value to just $2 billion. The stock has rebounded strongly since hitting those lows to reach $4.61 a share on Sept. 11 when the conversion of GIC's stake to ordinary shares took place. GIC took money off the table after the conversion by selling shares on the open market.

It now is sitting on a further $1.6 billion paper profit on its remaining stake, GIC's Chief Investment Officer Ng Kok Song said in a statement. GIC plans to keep its stake in Citigroup because it is "confident of [Citigroup's] long term prospects," the statement said. "A stake below 5% reflects GIC's goals and desire to be a portfolio investor."

Among other investors that invested alongside GIC were Prince Alwaleed bin Talal of Saudi Arabia and the New Jersey pension system. They appear to have received similar terms as GIC in the conversion. Chinese policy lender China Development Bank had considered participating in the January 2008 Citigroup offering, but China's senior government leadership rejected the plan. The favorable terms secured by GIC in the Citigroup bailout could give it bragging rights at home in Singapore.

The city-state's other major state-owned investment arm, Temasek Holdings Pte. Ltd., lost billions of dollars on its stakes in Merrill Lynch & Co. and Barclays PLC. Temasek sold out of those holdings in late 2008 and early 2009 before banking stocks staged a recovery. Apart from its Citigroup holding, GIC also has a 9% stake in UBS AG, which it bought in late 2007. The U.S. Treasury adjusted the terms for the foreign investors in Citigroup only after it had built up a major stake in the bank itself.

Prior to the February bailout, the Treasury took $25 billion in Citi stock and warrants in October last year as part of $125 billion rescue package of eight major financial institutions. Then in November, the U.S. Treasury put an additional $20 billion into Citigroup as its stock tumbled and agreed to protect Citi against losses on a $301 billion pool of assets.

[kennynah]

i suppose one wont expect Myanmar newspaper to be writing anything to put their military hunta in bad light... so why would sph treat its master any differently...