Singapore GIC's 5 months fling with OneSteel ended in paper losses

[SNAblog]

http://www.smh.com.au/business/a-singapore-fling-with-onesteel-20110517-1erdy.html

A Singapore fling with OneSteel
May 18, 2011
Ian McIlwraith

The Government of Singapore Investment Corporation (GSIC) has become a substantial investor in OneSteel after some aggressive buying since January, clearly chasing value, given the group's shares have fallen more than 25 per cent this year.

Although the OneSteel holding is a fraction of GSIC's $US100 billion-plus global portfolio, it is more than 4 per cent of the $US3 billion ($2.8 billion) the fund has ploughed into Australasia.

Apparently the Singaporean group has been one of OneSteel's larger investors for some time, and must have faith in the stock's chances of recovery. Its shares hit their lowest in two years this month and closed at $1.90 yesterday.

GSIC's buying between January and May totalled 19.6 million shares, at an average price of $2.38 - slightly better than the market average over that time of $2.53.

If Insider generously applies that same $2.38 average purchase price to the whole GSIC stake of 67.2 million shares, the investment is about $32 million underwater. More likely, the Singaporean stake cost a bit more than that, given that the average price over the past three years is closer to $3.55 a share.

That would mean, without accounting for dividends, a paper loss closer to $60 million. Hopefully the responsible investment manager was listening last week when GSIC's chairman, the just-departed as Minister Mentor and near-nonagenarian Lee Kuan Yew, celebrated the fund's 30th anniversary with a speech that noted: ''Compared with the popular high-return asset class of equities, which returned 10.2 per cent per annum in nominal US dollar terms since 1981, the GSIC portfolio made comparable returns with less risk.''

OneSteel's ex-BHP sibling, BlueScope Steel, would probably wish that the GSIC found its shares interesting enough to be a major investor, too.

BlueScope, which used ''the turnaround, the potential'' as its motto on last year's annual report, has even more potential turnaround for investors now given that its market worth has dropped $1.25 billion to $2.75 billion since the report was published - not helped by last week's market update that the company was slipping to a loss.

 

[borom]

When it losses money,its call long term investment .
When it makes money, its called Headline news in ST.

When questioned, they will use a period that suits them, whether its 1 or 10 years timeframe.

The problem is not with GIC,Temasek,HDB,ect2 but the 60%.
When the 60% becomes 49%, you will see the light.

I would like to recommend that one of the WP's NCMP take on the role of monitoring GIC/Temasek and take them to task for each and every loss. Since they do not have to serve the constituents and listen to problems like leaking pipes or dead bodies in watertanks, they can focus on making sure our hardearned reserves are not burnt away.

 

[Papsmearer]

When it losses money,its call long term investment .
When it makes money, its called Headline news in ST.

When questioned, they will use a period that suits them, whether its 1 or 10 years timeframe.

The problem is not with GIC,Temasek,HDB,ect2 but the 60%.
When the 60% becomes 49%, you will see the light.

I would like to recommend that one of the WP's NCMP take on the role of monitoring GIC/Temasek and take them to task for each and every loss. Since they do not have to serve the constituents and listen to problems like leaking pipes or dead bodies in watertanks, they can focus on making sure our hardearned reserves are not burnt away.

Just buy bonds, and u are already earning more than these losses. F & N 7 year bonds at 3.15% for example. U can fire the entire staff of GIC and save hundreds of $millions in salary, perks, and overhead, and just hire 3 bond traders.

 

[ginfreely]

Less than Temasek's losses in ABC Learning in Australia - A$401m. Anyone knows what happened to this case eventually?


Temasek's Aussie investment goes under
Siow Li Sen
Fri, Nov 07, 2008The Business Times



(SINGAPORE) A Temasek Holdings investment Down Under has gone under - a victim not just of the credit crunch but also dubious management.

Childcare operator ABC Learning Centres said yesterday that it has gone into receivership and appointed voluntary administrators to help clear a mountain of debt.

Reports are emerging that founder Eddy Groves, who was ousted in September, ran ABC's operations in such an 'opaque' way that potential rescuers find the business model hard to decipher.


ABC has also been attacked over related-party transactions. Mr Groves' former brother-in-law had a A$170 million (S$174 million) maintenance and renovation contract for ABC's childcare centres, and the service company lists its principal place of business as Mr Groves' Brisbane apartment.

Reports yesterday said the directors of ABC - the largest childcare centre operator in Australia and second-largest in the US - has appointed Ferrier Hodgson Group voluntary administrator.

Temasek Holdings is ABC's second-largest shareholder. In May last year, the Singapore investment company spent A$401.5 million or A$7.30 a share on a 12 per cent stake. Then early this year - as the stock sank - Temasek increased its stake to 14.7 per cent. This has since been pared to 12.68 per cent, after ABC completed an A$82 million equity placement in June.

Temasek Holdings spokeswoman Myrna Thomas said yesterday: 'We note the serious development announced by ABC Learning Centres. We are monitoring the situation closely and will explore all options available to us.'

Lazard Asset Management is ABC's largest shareholder with 12.93 per cent, followed by Temasek, then Morgan Stanley.

ABC said the company's banking syndicate has appointed advisory firm McGrathNicol as receiver, AP reported.

ABC chairman David Ryan said the company's board and management are 'disappointed' to be in this position but that quality childcare will continue. The company has almost 1,200 childcare centres in Australia and New Zealand, and more than 1,000 in the US, as well as more than two dozen nurseries in Britain.

ABC's debt on June 30, 2007 was A$2.2 billion, up substantially from A$111 million at the end of fiscal 2004.

The company, which gets a large proportion of its revenue from Australian government childcare subsidies, has delayed filing annual results for its latest financial year.

The government is in talks with creditors about ABC's future and has set up a task force to consider contingency plans to protect families that use the childcare service.

Potential buyers have been put off by the company's opaque management, after going through its books.

The Australian Financial Review newspaper said on Wednesday that instead of developing its own centres, ABC paid a company called 123 Global, run by former ABC executive Don Jones, to buy land, build centres and run them until occupancy rates were up, before selling them at a multiple of earnings.

But ABC could claw back liquidated damages if occupancy rates fell short, booking these as profits. In 2006, Mr Jones was running 123 Careers, which outsourced ABC Learning Centre staff. He paid a fee to ABC for a 10-year contract, which ABC front-loaded with payments over three years.

ABC is also said to have bought a toy distributor for A$5 million, loaded it with contracts to supply ABC Learning Centres, and then sold it for A$46 million.

Trading in ABC's shares has been suspended since Aug 21 as the company worked to resolve its debts. The shares last traded at 54 Australian cents.

 

[eErotica69]

Just buy bonds, and u are already earning more than these losses. F & N 7 year bonds at 3.15% for example. U can fire the entire staff of GIC and save hundreds of $millions in salary, perks, and overhead, and just hire 3 bond traders.

Talk cock, compare bonds to equity! Different risk, different potential returns.

Your chimpanzee tutor still haven't taught you INVESTMENT 101?

:(

 

[vamjok]

ABC learning one sweep under the table already

 

[longbow]

Of course when you are in charge of a US$500B SWF fund, you get feted at all the big events and they bring in the ex-presidents for you to rub shoulders with. And as we know, Wall Street and Swiss Bankers really know how to make you feel good.

Private bankers grovel at your feet when you park $500M in their bank. Just imagine how much grovelling there will be with US$500B.

 

[Boliao]

Talk cock, compare bonds to equity! Different risk, different potential returns.

Your chimpanzee tutor still haven't taught you INVESTMENT 101?

:(

Is bond really that different from equity from an investment perspective? Besides a bond being a loan, trading bond is not different from trading equity. Just like trading commodities and currencies. Different entities but essentially, the ultimate goal is to make money with managed risks - a concept that GIC and Temasek does not seem to be familiar with.

 

[Papsmearer]

Talk cock, compare bonds to equity! Different risk, different potential returns.

Your chimpanzee tutor still haven't taught you INVESTMENT 101?

:(

there u are, took a break from sucking Cooleo's lancheow did we? Well, if you stop swallowing all that sperm u would know that the prerogative of the GIC according to the PAP is to "protect" the national reserve "for a rainy day". Does that sound to you like it should be in equities? They should have had it in conservative investments all the time, like .................bonds. dummy. Just remember, too much sperm costs brain damage, u are a walking example.

 

[Papsmearer]

Is bond really that different from equity from an investment perspective? Besides a bond being a loan, trading bond is not different from trading equity. Just like trading commodities and currencies. Different entities but essentially, the ultimate goal is to make money with managed risks - a concept that GIC and Temasek does not seem to be familiar with.

This is a point that I have brought up before. The Norwegian SWF for example, puts their money in the 5,000 biggest corporations in the world, regardless of geographic location. The risk is spread over 5000 companies, not the 2 dozen GIC and Temasek does. When u bet on so few companies,and they go belly up, u are fucked. The norwegians don't need to have a large fancy investment team, or realms of researchers, everyone in the world knows who the biggest companies are. The Norwegian SWF answers to their parliament every year on the performance of the fund. The parliament decides the pay of the CEO, so everything is transparent, right down to their staff compensation, bonuses, and investments. Furthermore, the Norwegians if they suffer any lossesin the SwF simply replenishes it with oil money from the North Sea drilling. Singapore does not have that luxury. if you look at the investment that Temasek does, u can see that they are pretty much venture capitalist. A highly risky business and not in keeping with the objective of protecting the people's money for a rainy day.

 

[Papsmearer]

Of course when you are in charge of a US$500B SWF fund, you get feted at all the big events and they bring in the ex-presidents for you to rub shoulders with. And as we know, Wall Street and Swiss Bankers really know how to make you feel good.

Private bankers grovel at your feet when you park $500M in their bank. Just imagine how much grovelling there will be with US$500B.

Yes, u are right, its apower trip for them, but they are power tripping with our money.

 

[streetsmart73]

Just buy bonds, and u are already earning more than these losses. F & N 7 year bonds at 3.15% for example. U can fire the entire staff of GIC and save hundreds of $millions in salary, perks, and overhead, and just hire 3 bond traders.

1. aiyoh!
2. greed and power don't stop suddenly.

 

[Unrepented]

Bonds has its exposures. For capital protection, must have a mix of investment vehicles to enable hedging.

there u are, took a break from sucking Cooleo's lancheow did we? Well, if you stop swallowing all that sperm u would know that the prerogative of the GIC according to the PAP is to "protect" the national reserve "for a rainy day". Does that sound to you like it should be in equities? They should have had it in conservative investments all the time, like .................bonds. dummy. Just remember, too much sperm costs brain damage, u are a walking example.

 

[eErotica69]

there u are, took a break from sucking Cooleo's lancheow did we? Well, if you stop swallowing all that sperm u would know that the prerogative of the GIC according to the PAP is to "protect" the national reserve "for a rainy day". Does that sound to you like it should be in equities? They should have had it in conservative investments all the time, like .................bonds. dummy. Just remember, too much sperm costs brain damage, u are a walking example.

Investment 101 - DIVERSIFICATION!!!

Dr C... never reward you with his banana?

 

[halsey02]

When it losses money,its call long term investment .
When it makes money, its called Headline news in ST.

When questioned, they will use a period that suits them, whether its 1 or 10 years timeframe.

The problem is not with GIC,Temasek,HDB,ect2 but the 60%.
When the 60% becomes 49%, you will see the light.

I would like to recommend that one of the WP's NCMP take on the role of monitoring GIC/Temasek and take them to task for each and every loss. Since they do not have to serve the constituents and listen to problems like leaking pipes or dead bodies in watertanks, they can focus on making sure our hardearned reserves are not burnt away.

When I was young the game is called 'ti kum, ti kum', that is what they are playing..those people who prudently invested GIC, Temasek etc...funds are all gone, we need such people, who will treat with utmost aution with the large amount of public money they are handling.

 

[Papsmearer]

Investment 101 - DIVERSIFICATION!!!

Dr C... never reward you with his banana?

U call Temasek strategy diversification? They Only invest in a very small number of companies, that's diversification? And the quality of the companies they buy is known as gambling. Better to buy any large equity mutual fund, now that's diversification. Better still to buy bonds. Kenna fucked in the arsehole until your brain leaked out your years, izzit?

 

[Cruxx]

You have to pay the market rate or the man will up stakes and join Morgan Stanley, Lehman Brothers or Goldman Sachs, and you would have an incompetent man and you would lost money by the billions.

 

[ginfreely]

ABC learning one sweep under the table already

Another case of lost and forgotten..the loss is more than one YOG..

 

[ginfreely]

U call Temasek strategy diversification? They Only invest in a very small number of companies, that's diversification? And the quality of the companies they buy is known as gambling. Better to buy any large equity mutual fund, now that's diversification. Better still to buy bonds.

Going by their track record of buying Aussie shares that soon head south, better for them to place their Aussie dollars in fixed deposit.

 

[Thick Face Black Heart]

Forget bonds, if you put your cash under the mattress you could even outperform GIC. That's really sad.

Just buy bonds, and u are already earning more than these losses. F & N 7 year bonds at 3.15% for example. U can fire the entire staff of GIC and save hundreds of $millions in salary, perks, and overhead, and just hire 3 bond traders.