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Ho Jinx LOST BIG on Bet on China Banks

makapaaa

Alfrescian (Inf)
Asset
[h=2]Lacklustre performance expected for Temasek[/h]

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July 7th, 2014 |
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Author: Editorial




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The media reported today (7 Jul) that Temasek Holdings
would likely be reporting a lower performance in terms of its returns for last
financial year.

This is due to the lacklustre performance by Singapore stocks and Chinese
bank counters over the past year. Presently, Chinese banks and Singapore stocks
make up a major component of Temasek’s portfolio.

According to CIMB Research, Temasek may have increased the value of its
holdings by about 4 percent to a record $224 billion in the year to March
31.

=> From inflow of CPeeF?


China Construction Bank and Industrial & Commercial Bank of China are
among the top four bank stocks in Temasek’s portfolio. The share prices of
Chinese banks declined as China’s economy heads for the weakest expansion in 24
years amid rising debt and a clampdown on shadow banking.


China Construction Bank lost 13% in Singapore dollar terms, while Industrial
& Commercial Bank of China fell 11%. Standard Chartered lost 18%. Temasek’s
stake in China Construction Bank alone was valued at $17.8 billion as of March
31 and comprises 8% of its total portfolio.


Analysts estimated that financial firms made up 31% of Temasek’s total
holdings as of March 2013. “They (Temasek) built up very big stakes in the
Chinese banks, and it’s now going to be very difficult to divest that without
making a loss,” one analyst said.


Also, Singapore’s Straits Times Index (FSSTI) lost 3.6% in the 12 months
through March. Temasek is the biggest shareholder in about a third of the 30
members in the index. Its biggest listed holding by value, Singapore
Telecommunications Ltd, rose 1.7%. DBS gained 1.1%. SIA lost 3.7% during the
period.

China accounts for 23% of Temasek’s portfolio, second only to Singapore’s 30%
in terms of country mix, according to its annual report last year.

According to Temasek’s website [Link],
its Total Shareholder Return (TSR), which measures compounded annual returns,
including dividends but not capital injections, for the financial year ended 31
March 2013 (in Singapore dollar terms):


  • 1-year TSR was 8.86%
  • 3-year TSR was 4.94%.
  • 10-year TSR was 13%
  • 20-year TSR was 14%
  • 30-year TSR was 15%
  • since inception in 1974, TSR was 16%

Average risk-adjusted hurdle rates for Temasek have been around 8-9% through
the years. Annualised core inflation in Singapore has been about 2.0% over the
past 10 years, its website said.

However, Temasek had a negative return of 30% in the year ended March
2009.


According to the website of the Institutional Investor’s Sovereign Wealth
Center, Temasek is the world’s 10th-biggest state investor. GIC ranks 5th. The
world’s biggest is Norway’s Government Pension Fund Global, with an estimated
US$869 billion of assets under management.

Olam International

In March this year, Temasek offered to take over Olam International valued at
$5.3 billion at the time. When the offer closed, Temasek and its related parties
own or control 80% of Olam.

However, prior to the takeover announcement, Olam’s share price had run up
considerably since the first week of February 2014, when the stock market
re-opened after a short break for Chinese New Year. From a low of $1.425 (4
Feb), Olam went up almost in a straight line to $2 (12 Mar), taking a 2-week
breather (21 Feb – 4 Mar) only at the $1.70 – $1.80 level. For the 3 months
prior to its run, Olam actually saw a deterioration in share price from $1.58 to
$1.42.

Olam ran up despite less than stellar results. On 14 February 2014, Olam
released their results for the second quarter and half year ended 31 December
2013 [Link]
which showed that profit dropped 12.5%.

Trading volume jumped along with the jump in share price. For the 3 months
prior to Olam’s price rise, average daily volume was a mere 3 million shares.
When Olam’s price went up, daily volume rose to as high as 18.29 million shares
(11 Mar) and averaged 9 million shares, 3 times its average volume of 3 million
shares for the previous 3 months.

There has been a general rise in farm commodity prices recently. The S&P
GSCI Agricultural Index has advanced 13% this year, with price surges in coffee
and cocoa. But even given this scenario, the outsized gains enjoyed by Olam on
the back of hefty volume cannot be explained.

At 6.52 a.m. on 14 March 2014, Olam announced through SGX that it was the
subject of a takeover bid by Temasek Holdings subsidiary Breedens Investments at
$2.23 per share. It is very disquieting that Olam only chose to request a
trading halt as it was putting the finishing touches to the bid, and not earlier
when the price ran up on heavy volume for over a month.

Even more disquietingly, SGX never once queried Olam on its trading activity.
In other words, SGX never once publicly asked Olam if it knew of any reason(s)
for the surges in price and volume, which SGX is supposed to do as a responsible
regulator.


Facing mounting criticisms and market talk in social media, SGX finally
issued the following “lacklustre” statement on 16 March, titled “SGX clarifies
Olam International issue” [Link]:


Market commentaries noted that in the six weeks from 3 Feb 2014, Olam’s share
price increased 34.8%, higher than those of its peers such as Wilmar
International which rose 11.2% and Noble Group which rose 12.6% over the same
period. During the period, the Straits Times Index rose 2.3%.

Such comparisons should be conducted with care as the financials and outlook
of individual companies may differ even if they are within the same industry.
While we do not prescribe a view of value or pricing of stocks, we note that of
the 13 analysts who issued reports on Olam in February 2014, seven raised their
target price by an average of 10.4% with the highest increase being 21.4%.

The 13 analysts had target prices of $1.50 to $2.00 for Olam. In the case of
Wilmar, eight analysts raised their target price by an average of 2.6% with the
highest increase being 4.8%. For Noble, one analyst raised the target price in
February. Trading in these three stocks were within the price ranges set out in
the research reports, suggesting they were trading within the general market
view of these stocks with Olam shares reflecting a more positive market view.
 

dr.wailing

Alfrescian
Loyal
Now that with the publicity surrounding Roy Ngerng and calls from a section of the public for increases in the CPF interest rates, Temasick has to cook up or magnify (a/k/a exaggerate) some sob stories about its loss-making investments.
 

kryonlight

Alfrescian (Inf)
Asset
Don't worry. They will just increase the minimum sum and the drawdown age and at the same time import more foreigners to make up for the losses.

PAP is the Best!
 

frenchbriefs

Alfrescian (Inf)
Asset
this is the biggest fracking joke of all......gic is using our cpf to invest......instead of putting 230 billion of our money into the hands of these bozo clowns....we can simply ask vanguard group or blackrock to manage our money for us....put everything into index funds......less than 0.2% overheads and fees.....no need to pay a bunch of clowns millions and millions to gamble with our money........with a mixture of stock and bond index funds we get total diversification and a almost guaranteed return of 7 to 8% p.a. over the next century.
 

mojito

Alfrescian
Loyal
this is the biggest fracking joke of all......gic is using our cpf to invest......instead of putting 230 billion of our money into the hands of these bozo clowns....we can simply ask vanguard group or blackrock to manage our money for us....put everything into index funds......less than 0.2% overheads and fees.....no need to pay a bunch of clowns millions and millions to gamble with our money........with a mixture of stock and bond index funds we get total diversification and a almost guaranteed return of 7 to 8% per annual.......

What a silly idea. Like that so easy how to pay astronomical stipends to lackeys and royal relatives?

Chinese have a saying, "Fat water no flow outsider's fields". Familee comes first ok?
 

frenchbriefs

Alfrescian (Inf)
Asset
meet minimum sum??????

do u know if i put 50k now(im in my mid 20s) into the s&p 500 index......and leave it there untouched for the next 30 years.....i can retire at 55 with nearly $560,000?

if i put 50k now into the goddam cpf,at 2.5% interest.....at the age of 55 i will not even be able to meet minimum sum!!!!!!!!at age 55 i will only have 105k and i have to pledge my HDB and clear dishes or work at mcdonalds until im 65!!!!!
 

winnipegjets

Alfrescian (Inf)
Asset
4 percent leh! Your savings got 4 percent boh? Temasek HUAT AH!

Invest $10k annually over 30 years, you have $450k at the end when it is in the CPF.
Invest the same amount on an ETF of the S&P, you have $1.3 million.

You don't even know you have been screwed?
 

rushifa666

Alfrescian
Loyal
oh give the economists a laugh now and then. lie about your "gains". Shrewd investors will never be fooled. You are still hiding around in the store when they are laughing at you from the cameras
 

frenchbriefs

Alfrescian (Inf)
Asset
Between the report said something about total shareholder return....I had no idea u can become a shareholder of temasek?

According to Temasek’s website [Link],
its Total Shareholder Return (TSR), which measures compounded annual returns,
including dividends but not capital injections, for the financial year ended 31
March 2013 (in Singapore dollar terms):


1-year TSR was 8.86%
3-year TSR was 4.94%.
10-year TSR was 13%
20-year TSR was 14%
30-year TSR was 15%
since inception in 1974, TSR was 16%
 
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songsongjurong

Alfrescian
Loyal
When T and GIC loses, dun worry, they have a cupboard of KY tubes ready to screw sinkie ass, the sore is temporary..over time,we aint gonna feel nothing. No butt plug needed
 

nycheong

Alfrescian
Loyal
Don't worry. They will just increase the minimum sum and the drawdown age and at the same time import more foreigners to make up for the losses.

PAP is the Best!
By importing FT can generate hugh levy revenue monthly. 2.5m x $800/FT=$2 billion per month.
 

Dark Knight

Alfrescian (Inf)
Asset
Do you know why Pinky keep on importing FTs to reach that 6.9mil of people?
One simple reason is that the Sillypore ghabrament can easily collect $6.9mil/Day of GST, assuming every one pay an average $1 GST/Day.
Each $$$ income for the MIW and easy way to sustain our economy growth via consumer spending.
 

Kuailan

Alfrescian
Loyal
Jinx lost $650 million old man said its ok! its an honest mistake@!

Lets move on!! there after nothing happened!!

If other people head will roll down the gutter!!
 
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