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

[kanglc]

http://www.temasekholdings.com.sg/media_centre_news_speeches_290709.htm

[Aspellian]

Temasek Holdings, reeling from the aborted appointment of Charles “Chip” Goodyear, said it lost more than $40 billion in asset value and that the sovereign fund may allow public investment for the first time.

The Singapore investment company will seek “sophisticated investors” and won’t sell the “family jewels” for short-term gains, Chief Executive Officer Ho Ching, the wife of Singapore’s Prime Minister Lee Hsien Loong, said in a speech today in Singapore. Goodyear’s departure was “unfortunate” and Temasek will continue to review its succession plans, she added.

The appointment of Temasek’s first foreign CEO collapsed a week ago because of differences over strategy, raising concerns over transparency and management control after losses on Merrill Lynch & Co. and other financial investments dragged down its performance last year. Ho, who was due to step down Oct 1, said the fund will act to enhance value over as long as 30 years and will not sell stakes “for divestment’s sake.”

“We don’t intend to raid the larder nor sell the family jewels for short-term gains,” Ho said. “We will jealously guard our interest and will invest, rationalize, consolidate or divest where it makes sense, where we can achieve clear, sustainable value.”

Ho, 56, drove an expansion outside Singapore and increased financial assets to 40% of a portfolio that has declined as the credit crisis drove down the value of stakes in Merrill Lynch, Barclays Plc and Standard Chartered Plc.

PREDICTED DROP
Last year, the fund predicted a 16% probability that the value of its assets may drop by more than $40 billion in the 12 months ended March, Ho said.

“Indeed, it has turned out to be so, and more,” she said. “We are certainly not happy with the negative wealth added in March last year, as well as March this year.” The fund defines “wealth added” as returns above risk-adjusted cost of capital.

The state-owned investment company’s assets were valued at $127 billion as of Nov. 30, down from $185 billion at the end of March last year, the Ministry of Finance said in February.

Temasek would consider creating one more group of stakeholders over the long term, and may invite the public to “co-invest” with the company, Ho said. It may seek “sophisticated investors” in five to eight years and retail investors in the next eight to 10 years, she added.

“It is important to test this over at least one market cycle during the next five to eight years,” she said. “If this pilot is successful, we may then consider a co-investment platform for retail investors in perhaps eight to 10 years’ time.”

‘PRETTY HUGH INVESTMENTS’
Temasek could attract some “pretty huge investments,” though it will have to balance the interests of shareholders and the state, said David Cohen, director of Asian economic forecasting at Action Economics in Singapore.

“They’ll be subject to greater disclosure and corporate governance but that’s going to be the case going forward anyway with or without external investors,” Cohen said. “That’s the trend around the world today.”

Temasek is the biggest shareholder in five of Singapore’s 10 biggest publicly traded companies by market value, including Singapore Telecommunications, Southeast Asia’s biggest phone company, and DBS Group Holdings, the region’s largest bank by assets.

Ho said it was “unfortunate” that Goodyear didn’t take the top job, and that the succession review continues for her replacement.

‘HIGH REGARD’
“I just want to reaffirm that the decision was both mutual and amicable,” Ho said. “ We continue to hold Chip in very high regard for his professionalism and his integrity.”

Ho said financial services investments will still form part of Temasek’s core holdings. Temasek is still “fairly comfortable” in the financial services industry, she said.

The fund, in the first quarter, sold its 3.8% stake in Bank of America Corp., which bought Merrill Lynch, at a loss that may have totaled US$4.6 billion ($6.6 billion). Temasek sold its stake in London-based Barclays at a loss in December and January, Thomson Reuters reported on June 3, citing people familiar with the matter.

Temasek was founded in 1974 to foster development of the island’s banks, airlines and ports. It owns shares of the island’s biggest bank and its largest telephone company.

[millionairemind]

Published July 30, 2009

Negative bonuses for Temasek staff for second year running
Ho Ching hints at possible changes to current pay structure

By CONRAD TAN


(SINGAPORE) Temasek Holdings staff will be paid 'negative bonuses' for the second year in a row after its investment return fell below its risk-adjusted cost of capital, chief executive Ho Ching said yesterday.

The firm's wealth added - what Temasek calls its return in excess of its risk-adjusted cost of capital - was negative for the year to end-March, she said, though she did not disclose the size of the shortfall.

'Returns below our risk adjusted cost of capital hurdle means we have negative bonuses to be distributed,' Ms Ho said.

'In the previous financial year, which ended on March 31, 2008, Temasek's wealth added was minus $6.3 billion - the first time in the five years since it started publishing its annual Temasek Review that its investment return fell below the cost-of-capital hurdle. That was despite Temasek generating a positive return of 7 per cent for its shareholder, the Ministry of Finance.

'And so, from CEO to office attendants, all our staff were allocated negative bonuses last year, and will be allocated more negative bonuses this year,' Ms Ho said.

A Temasek spokesman said that an undisclosed portion of the wealth added each year forms a bonus pool that is then allocated to 'bonus banks' maintained for individual staff. When bonuses are positive, staff can withdraw just part of the bonus in cash; the rest is retained in various co-investment schemes that can be cashed in only after three years or more.

When the wealth added is negative, a 'negative bonus' is then charged against the balance in the staff's bonus bank, potentially wiping out the medium- and long-term incentives paid in previous years.

'While we are certainly not happy with the negative wealth added in March last year, as well as March this year, this has enabled us to test our compensation framework through at least one very difficult market cycle,' Ms Ho said.

One of Temasek's key principles, she said, 'is for our employees to share in the institution's performance, both for positive and negative results'.

'This is in essence having an owner's approach to our business and operations.'

Senior managers have the bulk of their incentives deferred for 3-12 years, she said. Some of these deferred pay components are subject to market risks, and vary with the returns that Temasek earns for the Finance Ministry.

The remaining components are subject to a 'no-floor claw-back', she added, meaning that they may be 'wiped out if and when we deliver well below our cost of capital target'.

'This clawback feature is tied to the principle of rewarding only for sustainable performance,' she said.

She also hinted at possible changes to Temasek's current pay structure. 'Some say it's too long,' she said, of the 3-12-year period for deferred pay. 'But we'll see.'

[winston]

FountainVest leads $99 mln buy in China developer

* FountainVest-led consortium to invest in Central China
* Central China to issue $99 mln in convertible bonds
* Funds see promise in second-tier Chinese cities (Adds company's confirmation, FountainVest's comments)

By George Chen, Asia Private Equity Correspondent

HONG KONG, Aug 5 (Reuters) - A consortium led by private equity firm FountainVest Partners plans to buy nearly $99 million worth of convertible bonds issued by Central China Real Estate (0832.HK) to support the developer's domestic expansion.

http://www.reuters.com/article/marketsN ... dChannel=0

[winston]

GIC says lack of recovery by 2010 big risk for Asia

SINGAPORE, Aug 6 (Reuters) - Singapore's biggest sovereign wealth fund GIC said on Tuesday that the greatest risk facing Asia is a global economic and financial environment that does not stabilise and recover by 2010.

"If the U.S. economy turns out to be worse than expected, requirements for banks' capital will be higher and the U.S. administration might need to go back to Congress to ask for additional funding," Tony Tan, deputy chairman of the Government of Singapore Investment Corp said in a speech.

"Downside risks remain high, despite signs of stabilisation," he said.

GIC, which manages more than $200 billion in assets and has significant stakes in Citigroup and UBS , said failure of policies in the West and protectionism were some of the other risks facing the global economy.

"A major challenge going forward is the uncertainty raised by the apparent failure of Western or American models which, at the extreme, put financial markets above other sectors of the economy." His comments came after the International Monetary Fund said last month that the sharp contraction in the U.S. economy "seems to be ending" but recovery will be slow with risks still looming from the weak labor and housing markets.

The IMF, in its annual report on the U.S. economy, stuck to earlier forecasts that gross domestic product will shrink by 2.6 percent in 2009 and then rise by 0.8 percent in 2010.

GIC's Tan, however, said Asia's economic fundamentals were strong and its growth will recover once the global economy stabilises.

[millionairemind]

Aug 11, 2009
Temasek investment pays off
Some of money pumped into rights issues may have come from sale of stakes in BoA, Barclays
By Gabriel Chen
THE investments Temasek Holdings has made in rights issues over the past eight months have surged by around 184 per cent on the back of rocketing global equity markets.

Data compiled by The Straits Times from public information shows that Temasek has spent about US$2.9 billion (S$4.2 billion) subscribing to new shares of companies in which it already holds stakes.
In a rights issue, a company sells new shares to raise capital. Shares are offered - usually at a discount to the current price - to existing investors in proportion to their holding.

[Aspellian]

Aug 11, 2009
Temasek investment pays off
Some of money pumped into rights issues may have come from sale of stakes in BoA, Barclays
By Gabriel Chen
THE investments Temasek Holdings has made in rights issues over the past eight months have surged by around 184 per cent on the back of rocketing global equity markets.

Data compiled by The Straits Times from public information shows that Temasek has spent about US$2.9 billion (S$4.2 billion) subscribing to new shares of companies in which it already holds stakes.

The 180% calculation could be just based on rights issue price instead of average diluted price of investments. Rights issue price was probably issued at 50% discount of already depressed share price. eg. $0.50 rights even though depressed share price was $1. Depending on terms of rights issue, share price would have been diluted eg. to $0.70. Subsequently, markets shoot up to $1.40... lo and behold... you have 180% returns on rights issue investment alone!!

[millionairemind]

A bro - Guess who owns SPH??? Media spin my bro

[kennynah]

i thought the emperor owns everything in singapore? including the air we breathe here...no meh?

[Aspellian]

A bro - Guess who owns SPH??? Media spin my bro

Yes of course! Its an (ah)GLC!!! AH-GONG-LINKED COMPANY
maybe Temasek also indirectly owns Mediacorps via complex corporate structure!