Sunday, February 03, 2008

BREAKING NEWS: GIC Buys Tokyo Westin !!!!

TOKYO (Nikkei)--The Government of Singapore Investment Corp. (GIC) will purchase, probably late this month, the Westin Tokyo luxury hotel for about 77 billion yen from Morgan Stanley, it was learned Saturday.
Congratulations Singaporeans!! You are now the proud owner of Westin Tokyo, a luxury hotel that is sometimes described as 7-star in luxury. Remember this next time you visit Tokyo. Isn't it great that your CPF money is funding all these wonderful buys? GIC 'borrows' your CPF money at about 3% interest rate to buy this luxury hotel in Tokyo.


Anonymous said...

It is not wrong to buy into expensive holdings at the moment, since the economy downturn has significantly reduced the prices of i.e. banks and hotels etc.

Though, the questionable doubt is, is this a huge gamble to reckon with? Would these investments in fruitful and profits-yielding in future?

If not, what is to become of our hard-earned monies, our self-funded pension funds?

Talk about profitable investments... so as to enable us 4-5% interest returns.

Perhaps I should go over to Tokyo right now and take a peep at my (our) new acquisition.

Anonymous said...

77 billion yen = S$1 billion. Another humongous investment and nobody knows whether it is good buy or not.

However this much we know of the 2 other bigger investments by Temasek & GIC in US banks - Merrill Lynch and Citibank.

The value of the US dollar continues to fall, so any investment in these US-related concerns risk being drastically reduced in value - even considering the 7% non-cumulative interest that GIC will earn from its investment in Citibank.

Many Singaporeans seem to think that only one man is making all the important decision-making in the government : Lee Kuan Yew.

MM Lee being engaged by Citibank as it Special Advisor, how would he decide given the following scenario:

Suppose he is paid an annual fee of USD10 million by Citibank as its Special Advisor. Then the CEO of Citibank tells him that his bank is in trouble and needs the Singapore government to prop it up.

Given MM Lee's extremely survivalist mindset, between risking his Advisor position and risking the country's national reserves and people's CPF savings, I am of the opinion he would rather choose the later.

This is why I think for such a high national leader to serve as Advisor to a commercial institution is wrong because of such possible conflict of interest.

Just in case some do not know, our PAP MPs and political secretaries are allowed to hold active directorship in GLCs. On top of that they can also take on independent directorships in various companies.

Some people therefore reason that PAP insists that its Ministers should be paid such high salaries because PAP MPs and political secretaries are getting such high incomes already.

But in the first place it is the PAP top leadership itself that allows such a practice of allowing MPs and political secretaries to hold multiple top posts in big companies. If it disallow this practice then where is the envy that its own MPs and political secretaries are getting more than them the Ministers?

As it stands now, the money yardstick has thus come to decide other policies such as allowing the MM to become Special Advisor to Citibank. After all if a political secretary can be a director of a corporation, why not the MM as Special Advisor of a American bank? The escalation continues when this logic is carried to its logical conclusion. In the end the interest of the nation is compromised through the "conflict of interests" issues arising from the resultant policies.

The PAP government which I am sure is reading this must set things right, if it desires the future of this nation to be fully secured in the foreseeable future.

"Conflict of interests" on the level of government and the bureaucracy is a dangerous threat to our nation's future. This should be addressed immediately.

Lee Chin Suay said...

You guys worry too much.

1) This is a bargain, it's freakin' Tokyo! Hello?

2) Think of the big picture, when GIC buy something, would have been a long term low risk investment, and nevertheless, for those not use to big numbers, this is roughly 0.3% of GIC portfolio, are you scare?

Lee Chin Suay said...

Got the dollars wrong, it would have been 0.2% of GIC portfolio, imagine you CPF money paid for 420 of these!

Anonymous said...

Like what one crafty business friend once confessed: "When you are taking a cut, quote it in terms of percentage but when you are giving out a discount state in absolute value. The first appears small while the second looks large."


Anonymous said...

Does this mean that Singaporeans will be able to stay at that hotel for free? Or at least at a largely discounted rate?

Anonymous said...

I should perhaps remind myself next time i step into the hotel to tell the staff that i actually pwn them..

After UBS, Citibank, Merrill Lynch, i guess my dear "Guardian" of CPF should be looking into Société Générale (SG) as well.

After all we are a society run by "generals". And its short form sounds like it belongs to us anyway.

Anonymous said...

It's a good bye with our CPF what, why comprain? All hail the wisdom of the pappies!

Anonymous said...

Shareholders of UBS, the swiss bank, are now opposing GIC planned investment of USD 9.7 billion.

Just like the recent China Eastern Airlines deal which SIA had been hammering out for at least 6 months. Everything was okay until its shareholders voted out the deal.

Funny it is happening this way. But at least not so strange in China because it is known - as revealed in books authored by business consultants for China - that foreign investors in China are sometimes tricked into revealing their trade secrets after a string of tiring meeting lasting for months or even over a year.

As for the UBS deal, who knows it had been packaged with the Citibank and Merrill Lynch deals. They all come together within a matter of 1 month and demanded a total of USD21 billion from the GIC and Temasek.

A rundown:

GIC USD USD 9.7 billion in UBS,
GIC USD 6.9 billion in Citibank
Temasek USD 4.4 billion in Merill Lynch

I mean the big banks are closely aligned with each other and the Singapore government could have been tricked into buying into the 2 latter US banks which are far from attractive to the investing community given the recessionary trend of the US the depreciating US dollar, with the promise that it can buy into UBS.

I admit this is just a speculation but in the world of the big boys, we can't discount this sort of thing given the stupidity of PAP which is always rushing in where other fear to tread : Shin Corp, SIP, Micropolis, life sciences.

Now that IMF is drafting out guidelines for Sovereign Wealth Funds should demand that they declare how much of them originates from social security like CPF. This way SWF cannot exploit their people's own money while claiming the money is all from budget surpluses.

This article seems to be aware of this sore point about SWF . It said:

"If anyone should worry about them (SWF i.e.) , it's the people whose governments are amassing them. That's because governments tend to be terrible at managing money that is best left in the hands of private citizens. And locking away billions of dollars in wealth can have pernicious economic side effects. Maybe that’s why sovereign wealth funds are popular with dictators and semi-authoritarian regimes, which don’t have to answer for the consequences when they make poor economic gambles."

This is obviously pointing a finger at PAP.

Anonymous said...

take a read at this letter from TCW's Chief Investment Officer:

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