Percevale
Ho Ching has stepped down as CEO of Temasek Holdings. For over 6 years, the Prime Minister’s wife held one of Singapore’s most powerful positions.
During her reign, some losses at Temasek included:
- SGD 400 million- ABC Learning Centre, Australia
- SGD 1.4 BILLION – sale of Merril Lynch (according to Reuters). Figures from Mutual Fund facts report that Temasek paid USD48 per share and at time of sale, sold their shares at USD29. Temasek denies this.
- SGD 2 BILLION loss – Shin Corp fiasco
- Further SGD 2.4 BILLION – Shin Corp fines
Under her, Temasek’s investments in UBS (Switzerland), Citigroup, Barclays and Merrill Lynch – at an original cost of US$21.88b – have declined on by some 47 percent in value.
Paper loss of US$10.28b. Paper Loss defined: an unrealized loss on an investment calculated by subtracting the current market price from the investor’s cost.
My opinion:
Contrary to some Singaporeans, I understand that Singapore’s position in the global community makes our markets heavily dependent on international trade. A small home market also weakens the government’s ability to pump prime the national economy by providing cash incentives and rebates to boost consumer spending.
If I recall correctly, local consumer spending only contributes 40% to Singapore’s economy (the average worldwide is around 50-55%).
What this means is that our economy depends on how well our friends do internationally. Many have bayed for blood at the losses incurred buying into banks like Citigroup but if you think about credit markets and cash flow- banks like UBS, Merrill Lynch and Citigroup provide credit to businesses and corporations across the continental United States.
Despite our size, we’re the 15th biggest trading partner to the US ergo. If Temasek didn’t act to purchase faltering US banks, stalled credit flow for US businesses might have dealt a deadly blow to Singapore’s economy.
Whether Ho Ching was looking hungrily at simply buying US bank shares for profit or out of an understanding of the need for US businesses to remain liquid in order to continue trade with Singaporean companies- we really won’t know.
I do know this- in a stroke of good fortune, our toxic Merrill Lynch shares converted to Bank of America stocks after BoA’s buyout of Merrill. And quite frankly, I’m taking it as a sign of a Higher Power (God, not LKY) simply looking out for lesser mortals in Singapore.
I look forward to the investment savvy of Temasek’s incoming CEO Charles Goodyear. Under the American’s care, BHP’s stock rose almost fourfold, outpacing the MSCI Materials Index’s 83 percent advance. Between 2003 and 2007, revenue went from $15.6 billion to $47.5 billion amid record gains in commodity prices.
Truth be told, I don’t understand how an Electrical Engineering graduate from Stanford (i don’t care how good the university is) implies financial intelligence that led Ho Ching to her meteoric rise as the head of Temasek (form your own opinions). For now, I believe we can all rest a bit easier now that someone with Mr. Goodyear’s impeccable credentials and investment wisdom is at the helm.
Madam Ho Ching, I bid you good luck and I hope for our sakes, you enjoy your retirement.
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RE: 48) Anonym on February 15th, 2009 11.36 am
“ST reported that Temasek’s loss of 31% last year is actually quite respectable compared to World Stock Index which dropped 46%. “”
You mean the STATE Times (ST) which is ranked 153rd in the world by Freedom House?
Do people know that Temasek assets not only includes QUOTED investments like Merrill Lynch, Barclays both of which are heavy losers, but NON-quoted ones as well?
Stripped off the NON-quoted ones, Temasek loses would have been much worse, especially with Merrill almost worth nothing.
And by the way, why did Ministry of Finance only use figures ending Nov 2008 when stock markets, especially Singapore’s SGX played catch up to even further falls?
RE: #51
Last sentence should have been read as:
And by the way, why did Ministry of Finance only use figures ending Nov 2008 when stock markets, especially Singapore’s SGX of which Temasek has the majority of its assets/quoted investments, played catch up to even further falls, since Nov 2008?
What fools we are. Even when the evidence is staring in our eyes, we shut our eyes and choose to listen to rhetoric. The rot has began and soon it will spread. Its going to be one cancer after another. It started with just peanuts, then the escape of a lone limping man, the it was millions in mini-bonds, now its billions. what next….anyone care to guess
latest news: Singapore’s GIC losses about 33 bln US dlrs
http://sg.news.yahoo.com/afp/20090217/tap-singapore-invest-gic-swf-finance-eco-06f3cb7.html
Poor lady took the rap for the loss suffered by Tamasek and has to relinguish her CEO post and her position as one of the most powerful women in the world. Must she suffer alone? What about her bosses, the chairman and Board of Directors. Shouldn’t the chairman and the directors of Tamasek made to feel the pain of the loss as well. They receive big fat director fees for guiding and overseeing the direction and investment decision of the company, they should shoulder a big portion of the blame for the investment failure of the company