Friday, May 15, 2009

Temasek Sells its Long Term Investment...

"When we invest, we are investing for 10, 15, 20 years. You may look as if you are making a big loss today, but you have not borrowed money to invest. You will ride the storm, the company recovers, your shares go up." - MM Lee Feb 2009 [Link]
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Temasek has sold its entire stake in Bank of America[Link]. Bloomberg reports that Temasek might have lost close to US$4.6B in the investment. Temasek received Bank of America stock after Bank of America took over Merrill. Temasek spent US$5.9B on its Merrill investment. Temasek sold its stock in first quarter of 2009. Although Bank of America's stock has since recovered, it is unclear if this recovery is sustainable - I still believe US banks face numerous challenges going ahead. Tim Geithner's "wayang" show using "stress tests" to show that US banks are healthy was brilliant as a move to restore confidence and allow banks to raise money through bonds and secondary stock sales.

22 comments:

Anonymous said...

I am sure our MM has a brilliant way to explain away this loss.

We don't pay him millions of dollars a year and still put him on a lifelong pension for nothing, you know.

Anonymous said...

Maybe our MM might explain that our Mentor Thio advise him to sell BOA away since she got sign from God that BOA will be the next to file Chp 11. lol

Anonymous said...

WHERE is OUR money?

Anonymous said...

廢柴

http://www.youtube.com/watch?v=Ivm1ZI0uEzw

http://www.youtube.com/watch?v=Wrt0ioaqGPo&feature=related

http://www.youtube.com/watch?v=FV57o_mw4v0&feature=related

Anonymous said...

Time to raise retirement age to "Till death or permanently disabled whichever comes first".

Anonymous said...

yup, initially for long-term and political support.

But because losing money, might as well get out.

The big question is - if Ho Ching was CEO, what would have happened? Was this decision to let go Chip Goodyear's?

Anonymous said...

http://www.bloomberg.com/apps/news?pid=20601080&sid=aLWQfWJXr07k&refer=asia

Hey lucky, why is our bloody soverign wealth fund leveraging itself? And in such dangerous waters. Did I misunderstand? If they are borrowing to invest, they must be mad? What happened to the patient capital stuff?

Ghost said...

About time! Temasek should have got rid of the stock the first chance it got. Better late than never I guess. By never, I mean when BoA collapse.

Anonymous said...

Sell or not sell, up to them. Lose or win up to them.

Whatever it is, one thing for sure.

The PAP will have 50% walkovers, 66% mandate and 98% seats at the next election.

They can continue to buy, sell or invest whether it is Ho Ching, Goodyear, Badyear or what not as CEO.

And Singapore will continue to be peaceful, although more crowded with foreign talent.

Anonymous said...

Your title says it all.

singaporeshortstories.blogspot.com said...

sales and buy take commonstage these days...

min said...

20yrs??? who'll remember what investments they made 20yrs ago and see if it really turns into a profit now? The longer they claim their horizon to be, the higher the chance of making a profit. Even if it does not, no one will remember.. No need an astute management to manage the fund, a fool can do just as good to make a profit in 20ys even if it means humongous losses today

Anonymous said...

"When we invest, we are investing for 10, 15, 20 years."

We should forgive the senile old man when he spoke senilely while peeing his pants. What he actually means to say is this
"When we invest, we are investing for 1.0, 1.5, 2.0 years."

The senile old man may be forgetting the dot.

The recent many happenings of sellout reaffirm what the old man actually want to say.

Anonymous said...

So what if our long-term investments make a profit?

How many of us actually benefit personally from our reserves, be in the form of social security, lower housing, lower taxes (including GST), substantial bursaries and scholarships for needy students, affordable medical care, etc etc.

In the end, the govt hoards the reserves, pays itself handsomely, and ensures that local students receive insignificant bursaries while putting legions of foreign talent on full scholarships.

Anonymous said...

Singapore has only one type of long term investment - our esteemed leaders! No matter what happens or what terrible decisions they make, they are here to stay forever - and get paid millions for it!

Anonymous said...

“How could we have known this was the extent of the damage? You look at all the big-name banks that have gone down, misjudged the situation, ruined their careers,”...This time went OUT "too early"?...sigh

Anonymous said...

what to do ?It has happened...move on...

Anonymous said...

eran money take money.
loss monet never say sorry.

earn money claim credit
loss money it is not my money.
it is not my business.

Anonymous said...

This post of yours is now a special featured article on Tomorrow.sg. Check out the comments there.

http://tomorrow.sg/archives/2009/05/16/temasek_lost_us46_billion_on_us5.html

Anonymous said...

just wondering if temasek is forced to sell BoA because they urgently needed the cash to convert all the GLC (DBS, CSM etc) rights issue that came out over last 3 mths?

If true that Temasek is indeed short on cash, then it means that sg reserves is much smaller than everyone thinks.

Anonymous said...

MM Lee says during the Lehman Bro saga, "You have to walk in with both eyes open!" Temasek now got so many eyes, with stellar economic result, yet made such decision that does not need any people with a doctorate in economic that its wrong decision!

Our scholar former Chief of Defence Force LG Ng Yat Chung also did a good job! Putting a foreigner in investment to a former Army guy!

Daviszacm said...

yup, initially for long-term and political support. But because losing money, might as well get out. The big question is - if Ho Ching was CEO, what would have happened? Was this decision to let go Chip Goodyear's?