GIC, Temasek & MAS 01 (May 08 - Aug 09)

[kennynah]

If those money are clean and obtained legally, why are they worried about more transparency ?

it is conceivable that such monies cannot "see light" one...

[iam802]

Singapore GIC converts preferred Citi stock into common shrs

http://www.marketwatch.com/news/story/s ... dist=msr_1

SINGAPORE (MarketWatch) -- Government of Singapore Investment Corp. Friday said it has agreed to convert its preferred shares in Citigroup Inc. (C:2.40, -0.12, -4.8%) into common stock at $3.25 a share.

The conversion price is well below the originally agreed conversion price of $26.35 a share. GIC said in a statement that after the conversion its stake in the troubled U.S. bank will rise to an estimated 11.1%
According to a Securities and Exchange Commission filing in late January, GIC held a beneficial 5.3% stake, or 303.8 million shares in Citigroup. These include preferred shares that can be converted into 261.1 million common shares.

The move comes after the U.S. government said Friday it is willing to convert up to $25 billion of its preferred stock in Citigroup to common equity in a move to protect shareholders against future losses.

"As a shareholder, GIC supports the initiative by Citigroup and the U.S. government to strengthen the quality of the bank's capital base in view of the challenging economic environment," GIC said.

I really don't understand why 'as a shareholder' must support Citi and US govt. initiatives.

But, well...maybe there are things they know and I don't

[blid2def]

Perhaps we shouldn't constrain ourselves to seeing how this plays out from a purely financial standpoint. Unfortunately, most of us are not in the position to know the intricacies of the tradeoffs involved. At least not until decades later when maybe some autobiography might shed some light on this.

[mocca_com]

haha.. agree with what you said.. let wait for some years later and see the autobiography. I strongly think that there will be more news on temesek or GIC taking more assets in US. this could be driven by political rather than commerical gain.

[Poles]

i think they say...either u help us scoop out the water while we fix the leak...or we can also sink together......

[Cheng]

The exchange price is US$3.25 a share – a 32 per cent premium to Citigroup's closing price on Thursday. The price is way under the conversion price of US$26.35 a share under the original terms of the investment.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/411996/1/.html

It's a move to minimize the losses. GIC were offered to convert at US$3.25 a share instead of the original term at US$26.35. I think they see no light holding on to the preferred shares.

It's a good move, but overall buying Citi is a big mistake when the knife is falling and toxic assets where still unknown. I don't know how were they even able to put a price on those financial derivatives which are packaged many times. No one even the CEOs know how to value it. And they were paid millions!

[kennynah]

but overall buying Citi is a big mistake when the knife is falling and toxic assets where still unknown

one word.....FEAR

[LenaHuat]

Our Merlion has been 'caged' so that its head could be examined.
Maybe more heads ought to have their heads examined.
Maybe GIC and Temasek's strategies on investments in the financial sector are cast in stone and had rods installed that drew lightning and 'blood'.

The new UBS Chief reportedly said that UBS would take 2 to 3 years to recover its strength and maybe 5 years if the external environmental factors were considered.

[financecaptain]

The exchange price is US$3.25 a share – a 32 per cent premium to Citigroup's closing price on Thursday. The price is way under the conversion price of US$26.35 a share under the original terms of the investment.

http://www.channelnewsasia.com/stories/singaporebusinessnews/view/411996/1/.html

It's a move to minimize the losses. GIC were offered to convert at US$3.25 a share instead of the original term at US$26.35. I think they see no light holding on to the preferred shares.

It's a good move, but overall buying Citi is a big mistake when the knife is falling and toxic assets where still unknown. I don't know how were they even able to put a price on those financial derivatives which are packaged many times. No one even the CEOs know how to value it. And they were paid millions!

The conversion of the preference shares is out of no choice rather than a good move. Or else the US government mayl not continue to bail out Citibank without nationalising it. Obviously, the concession for the conversion is a lower conversion price of about US$3 compared with previous as high as US$26. But current price is only trading at only US$2 or even less. Hence, still not a full concession, some gives and takes...

GIC spokesman can say that with this paper loss has been reduced. True, but the investment risk has increased in leaps and bounds. Preferred shares still has principal protection and fixed devidend yield (7%) features. With the conversion you are absolutely naked. You will be completely at the mercy of the US government and how Citi's financals turn out in the next few quarters. If US government needs to inject more funds to save the bank (which I think will happen) or worse nationalisation is of no choce, you will get diluted further for the first scanario and completely cooked for the second scenario.

The price to pay for taking the plunge too soon. Worse, not sensitive to global ecomnomics changes. Can only pray now. Without sounding too superstitious, the Merlion incident does signal a bad oman for Singapore ...

[iam802]

and the Merlion incident took place AFTER the decision on Citibank, right?