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

[kennynah]

If we are not OUTPERFORMING...then the talents are not worth the salaries paid.

If I want average returns , I buy index, correct?.

hehehehe.... if you own a pet dog...you will also want your dog to eat good, sleep well, even if it means it does nothing good for you...right?

[winston]

UPDATE 1-Temasek made 15 pct annual returns since '03-finmin

* No major change in portfolio since Nov 2008
* Fund is long-term investor despite early exit from BofA
* Temasek made $39 billion in 6 years since March 2003 (Updates with details) By Kevin Lim and Nopporn Wong-Anan SINGAPORE, May 28

(Reuters) - Singapore's finance minister defended the performance of wealth fund Temasek on Thursday, saying it will remain a long-term investor despite its loss-making early exit from Bank of America .

The fund made S$56 billion ($38.5 billion) in the six years since March 2003 or a return of slightly over 15 percent a year in this period, better than global equity markets, Finance Minister Tharman Shanmugaratnam said.

"The facts are Temasek has produced strong returns over time," Tharman told Singapore's Parliament. "It is not realistic to outperform in every cycle." "Even after taking into account the recent sharp decline, Temasek's portfolio has still grown by S$56 billion over the course of the cycle," he said.

The returns excluded injections by the government and dividends paid by Temasek [TEM.UL] over the period. Its only shareholder is the Ministry of Finance.

The government has come under fire from Singaporeans and lawmakers over losses at Temasek, in particular its exit from Bank of America which resulted in a loss of over $3 billion according to Reuters calculations. [ID:nSP484090].

"The sale of its BoA stake does not signify a shift in Temasek's investment orientation," Tharman said. "Temasek is a long-term investor, not a short-term trader of assets." Tharman did not disclose the level of losses from the Bank of America sale.

The government said in February this year that Temasek's portfolio shrank 31 percent to S$127 billion in the eight months to November 2008, and Tharman said the value as at end-March 2009 was similar to the November figure.

"The full year accounts to end-March 2009 have not been audited but the picture should not be fundamentally different," he said, noting stock markets at end-March were at similar levels to where they were in November.

"The sale of the Merrill/BoA investment would not have aggravated the results either, as the position I have described up to November 2008 takes in all unrealised losses including the mark-to-market losses on the Merrill investment." Temasek, which like other sovereign wealth funds, ploughed billions into Western banks in the early phase of the credit crisis, was hurt by the market meltdown as financials accounted for 40 percent of its portfolio at the end of March 2008.

Temasek is headed by the prime minister's wife Ho Ching, who will step down and be replaced by American Chip Goodyear, the former CEO of BHP Billiton , on Oct 1.

[kennynah]

ok...i am impressed...if indeed they made 15% annually every year for the last 6 years.... not bad...

[winston]

TOL:-

Why choose 6 years ?

What would the performance be from 1997, the start of the Asian Financial Crisis ?

Long term mah so why not look at the performance for 10, 15 or 20 years ...

[kennynah]

to account for those ealier years...please wait 5 years for an audited report...

[winston]

I was looking at the long term chart of STI this morning. The low of the AFC was in mid 1998. So the return from 1998 to 2008 would be a good gauge of their performance.

[millionairemind]

June 1, 2009, 5.23 pm (Singapore time)

Temasek buys Olam stake for US$303m

* Olam to sell 13.76% enlarged stake for S$437.5 million
* Temasek to become second-largest shareholder
* Olam shares up as much as 5.7%

SINGAPORE - Singapore commodities firm Olam International said it agreed to sell a 13.76 per cent of its enlarged capital to state investor Temasek Holdings for US$303 million.

Olam said the deal, which will make Temasek its second biggest shareholder, will provide funds for its expansion. Olam shares jumped as much as 5.7 per cent to a 4-week high, outpacing a 1.6 per cent rise in the broader index .

Analysts said the difficulty in raising cheap long-term financing for mid-size companies like Olam may have forced it to pursue the equity raising from the state investor.

But it came at a cost as Olam sold shares to Temasek at S$1.60 a share, a 17.5 per cent discount to Friday's close.

'If you have additional equity funding from Temasek, it alleviates the congestion in long-term financing,' said Ben Santoso, an analyst at DBS Vickers. 'Olam's growth would continue to be propelled by acquisitions.'

Analysts expect Olam, which has invested in cotton and wheat, may focus on food staples and the packaged food segment such as sugar and rice, as well as coffee and palm oil given its smaller exposure to these commodities.

'We are investing in Olam because it fits well with our investment theme of supporting emerging global champions,' David Heng, a managing director for investments at Temasek, said in a statement.

Energy and resources make up just 5 per cent of Temasek's portfolio of around US$87 billion.

Analysts expect the state investor could increase its stake in the resources and energy sector, guided by CEO-designate Chip Goodyear, the former CEO of BHP Billiton.

Temasek previously held a 4.9 per cent stake in Olam between 2002 and 2006. -- REUTERS

[winston]

How Singapore pissed away $40 billion By Porter Stansberry in the S&A Digest:

You might recall our skepticism a few years ago about the importance of so-called sovereign-wealth funds. The media was apoplectic that foreign governments would end up owning the crowning achievements of western capitalism: Citigroup, Merrill Lynch, and Bear Stearns. We said there are no worse investors than governments...

These kinds of deals are admittedly wonderful for sovereign wealth funds, which are now seen as paragons of investing. But... we wonder... how would you like to be the largest investor in a bank that's made such woeful capital allocation decisions and stands ready to dilute its shareholders at any moment? We suspect, much like a man who promises to marry his mistress, UBS may find itself unable to be any more faithful to its new shareholders than it has been to its last.

And while we have no doubt that sovereign wealth funds will be great for Wall Street, we wonder how well they will do for their ultimate owners - the citizens of Singapore. It has long been our experience that the farther a dollar travels from the pocket of the man who earned it, the more likely that dollar will be lost, stolen, or bled dry by fees.

The idea of a sovereign wealth fund is an investment banker's dream: These are dollars won through trade, deposited into central banks (in exchange for local currency), and left for the government to manage. This isn't merely "other people's money." This is money that never belonged to anyone in the first place. This is money that ought to disappear into the endless hole of human perfidy. We bet it does... and faster than most people expect. - The Digest, December 10, 2007

Singapore reported today [May 29] its sovereign-wealth fund lost $40 billion in the last six months, led by losses in Bank of America.

[winston]

Temasek may cut big exposure to banks-Nomura report

SINGAPORE, June 2 (Reuters) - Singapore state investor Temasek's new CEO Charles Goodyear may cut the fund's large holdings in banks and trim stakes in other firms such as SingTel as he reallocates money to energy and consumer sectors, Nomura said in a report.

Chip Goodyear, the former CEO of BHP Billiton , who takes over on Oct 1, had a strong record of capital management, M&A and overseas expansion, Nomura's head of equity research of Singapore and Southeast Asia, Jit Soon Lim said, in a 100-page strategy report on Tuesday.

"He (Chip Goodyear) might look to rationalise Temasek's large exposure in banks (40 percent) and reallocate to under-represented sectors such as energy/natural resources and lifestyle/consumer," Nomura said.

The study is one of the first indepth reports on Temasek's investment strategy. Temasek is unlisted and only issues an annual report.

Temasek's portfolio value slumped S$58 billion ($40 billion) or 31 percent in the eight months to November to $87 billion, as a turmoil in global markets slashed the value of its investments in financials such as Merrill Lynch and Barclays .

Temasek sold its stake in Bank of America in the first quarter, taking a hit of at least $3 billion.

[ID:nSP484090].

Temasek's current CEO Ho Ching, wife of Singapore's prime minister, said last month the investment firm is refocusing its investments toward emerging markets. [ID:nSIN444605] Temasek still holds large stakes in banks such as DBS , Standard Chartered and India's ICICI .

Energy and resources made up just 5 percent of Temasek's portfolio as of end-March. [ID:nSP133778] Nomura said Temasek had a low gearing and recurring cash flow of S$4-S$6 billion which gave it the flexibility to rebalance its portfolio.

"In our view, Temasek is well-positioned to expand its portfolio opportunistically in the current market environment, given its gearing potential," the report said.

Nomura said Temasek may trim its exposure to companies such as SingTel, StarHub , SMRT and Sembcorp Industries over the long-term given its high shareholding in these "non-strategic companies." Temasek has a 55 percent stake in SingTel, Southeast Asia's biggest telecom firm.

[winston]

Sometimes it's luck leh ..

Abu Dhabi SWF bought Barclays at a good price and they are selling at a huge profit now.