When Singapore’s Government Investments Corporation (GIC) and Temasek Holdings bought substantial stakes in the above three financial titans, I was genuinely proud and excited.
Wow! I believed (as did GIC and Temasek’s advisors) that such opportunities were once in a lifetime and not to be missed. This little red dot of ours would surely prove the whole world wrong!
Buy when everyone else sells; Who dares wins! ( SAS motto- I think)
However, the initial trickle of gloomy financial reports are fast becoming a flood. Jim Roger grieved “to see what Singapore is doing” and now UBS is writing down another US $19 billion! I suspect Roger’s grief may not be altogether sincere as he actually shorted investment banks in Wall Street. Hence he will benefit when these banks’ share prices went south!
Notwithstanding Roger’s true emotions, I have a sinking feeling and am beginning to think that these investments are lemons and that it will take more than my lifetime before we see any positive returns from them.
I am usually a positive-thinking kinda guy who always “looks on the bright side of life”.
But there is very little positive I can get out of this unless you consider telling those smart alecks at GIC and Temasek “I TOLD YOU SO!” as positive.
Honestly I would have preferred that that they proved the pessimists wrong. This possibility is becoming more remote by the day.
Dr.Huang Shoou Chyuan
1.UBS reveals another US$19b sub-prime drama 1 April 2008
ZURICH : Swiss bank UBS revealed a second round of subprime-related write-downs of about 19 billion dollars on Tuesday, becoming the world's worst-hit bank in the US mortgage crisis.
The latest write-down was the biggest single sub-prime hit so far worldwide, and came on top of 18.4 billion dollars (11.7 billion euros) the bank wrote down in 2007.
It will also plunge UBS, the biggest Swiss bank, into a net loss of 12 billion Swiss francs (7.6 billion euros) for the first quarter this year after loss of 4.4 billion Swiss francs in 2007, its first-ever such loss.
The bank also said it wanted to raise 15 billion Swiss francs of new capital, and that it was changing its chairman.
The last write-downs for 2007 had already forced the bank into a controversial rescue recapitalisation by a Singapore sovereign wealth fund and by an unnamed investor in the Middle East.
The overall write-downs by UBS so far of 37.4 billion dollars are far greater than those of American banks Citigroup (21.1 billion dollars in 2007) and Merrill Lynch which has booked 19.4 billion dollars in write-downs. ( read more...)
2.Investor Jim Rogers Says Singapore to Lose Money on U.S. Banks
Reuters 5 Mar 2008
SINGAPORE (Reuters) - Investment guru Jim Rogers believes that U.S. bank stocks could fall further and predicts that Singapore's state investors will lose money on their multi-billion dollar investments in Citigroup and Merrill Lynch.
"I'm shorting investment banks on Wall Street," the long-time commodities bull told reporters on Wednesday at a launch event for ABN AMRO certificates linked to commodities.
"It grieves me to see what Singapore is doing. They are going to lose money," he added, referring to investments by Government of Singapore Investment Corp and Temasek [TEM.UL] in Citigroup (C.N: Quote, Profile, Research), Switzerland's UBS (UBSN.VX: Quote, Profile, Research) and Merrill Lynch (MER.N: Quote, Profile, Research).
Rogers, an American who co-founded the Quantum Fund with billionaire George Soros in the 1970s, now lives in Singapore as he wants to raise his four-year-old daughter in an environment where she can learn Mandarin Chinese.
Rogers, who also writes investment books, said Wall Street had to work off 10 years of excesses and predicted that losses linked to risky mortgages will eventually spread to credit card bills, student loans and other debt.
(Reporting by Kevin Lim; Editing by Jan Dahinten)