LOOK AT THE TOP BOLLINGER BAND, TRENDLINE AND JAN21 2010 HIGHEST POINT
ALL MERGE INTO ONE POINT!!
呢位股癡 想話你知 咩叫股"賜" 咩叫股"辭"? 叻仔受賜 蠢仔必辭! 笑看風雲 定係瘋運? 利用風雲 享受瘋運 蠢仔風雲 變 成瘋暈 風雲必嚟 風雲必離
Wednesday, March 10, 2010
Sunday, March 7, 2010
»Ruminations of an Overseas Singaporean
This is my tenth, or eleventh year away from Singapore and I am not quite sure if I can articulate how I feel about my home country. After all, every national day over the past decade was spent away from Singapore, and this year is no exception.
Looking back, I can hardly remember what I did over the past ten national days. There was one year where I sang Count On Me Singapore in the bathtub on the morning of August 9th. That was in Beijing, probably in 1999 or 2000. There was another year where I tried visiting the Singapore Embassy, only to realize that it was national day and the Embassy was closed for the day. Jeez. That was in 2005 where I was studying in Seoul. I actually forgot it was national day when I left home that day.
But national days over the past decade were mainly about attending the occasional national day gatherings/receptions, mostly in Beijing, and twice in Washington DC, where I was pursuing my masters in international affairs.
Living in four different cities over the past decade has enabled me to see Singapore through the eyes of the many – often interesting, intelligent and discerning - people I have met, though admittedly many harbor fairly stereotypical views of the island.
Mainland Chinese I have met often praise Singapore for its efficiency, good governance, lack of corruption and cleanliness. But they would also lament about how small, hot and humid the country is.
South Koreans generally have a high regard for Singapore. They give top marks to the island for its efficiency and good economic performance. As Koreans took pains to remind me, Singapore companies own some of the most prestigious addresses in downtown Seoul, such as Seoul Finance Center in downtown Gwanghwa-mun. And oh yes, they love Yakun kaya toast!
Hongkongers, on the other hand, generally view Singapore as the territory’s competitor. Many Hongkongers describe Singapore as sterile, uninteresting and too restrictive on personal freedoms, unlike their (still fairly) laissez-faire territory. The only redeeming quality about the island, in the minds of these food-conscious Hongkongers, is Hainanese chicken rice and a whole array of other delectable hawker fare.
As for Americans, well, at least ordinary Americans, I am usually the only Singaporean they have ever met in their lives. In 9 cases out of 10, when I say I am from Singapore, the name Michael Fay would inevitably be brought up. Never mind that it has been almost 14 years since the American teenager was caned in Singapore for vandalism. Then of course there were questions ranging from whether “is it true that you cannot chew gum in Singapore”, to “is it true that you can get jailed if you do not flush the toilet after use?”
My American classmates would usually try to engage me in discussions about why political liberalizations in Singapore had not kept pace with economic development. As for my professors, I would invariably be asked during class discussions to “speak from a Singaporean viewpoint” on issues ranging from regional security, the island’s zeal in embracing FTAs (Free Trade Areas), to the influence and legacy of Confucianism in Singapore (huh?).
So, much as I wished to (occasionally) underplay my nationality, it is about as easy as erasing a permanent 10-cm mole on one’s face.
But if there is anything that had been driven home to me after being away from Singapore for over a decade, it is the sense that Singapore is small and will always be constrained by its size and geographical limitations. The best that the island state can hope to do is play a role that is incommensurate with its size, and remaining useful and relevant both regionally and globally – both of which the country had done with aplomb. Of course, such an awareness of Singapore’s limitations should not be viewed in a pessimistic way, but pragmatically. The awareness stems from the amazement that an artificial creation like Singapore had come this far, coupled with the worry and anxiety of the long-term viability of this artificially created entity whose idea of a shared historical and cultural heritage is to draw from the heritages of our Asian neighbors in Malaysia/Indonesia, India and China.
A country that begins with a clean slate and little historical baggage (except with its closest northern neighbor) is a great recipe for nation building. But will it be an equally good recipe for nation-bonding, and nation-togetherness in the midst of turbulence and turmoil? Will all the singing of Count On Me Singapore tide us through a crisis, given that countries with longer and more deeply-entrenched historical and cultural traditions had crumbled in the face of crisis, wars and devastation?
I do not know, and honest to goodness, do not wish to see any of the above scenarios materialize. All I hope for, at least during this national day, is an authentic bowl of laksa, a plate of truly spicy and sour-rish rojak and a steaming-with-fragrance plate of Hainanese chicken rice.He’s looking to open either in Hong Kong or Singapore. This is interesting because he prefers Hong Kong to Singapore mainly because the Hong Kongers are more appreciative and show more respect whereas while Singaporeans love their food, they tend to haggle over small things like corkage.
FROM http://food.recentrunes.com/?p=1458.
Hong Kongers, according to him, are more willing to spend on food. He fears that Singaporeans are unwilling to experience, for example, the cost of his upcoming menu of new dishes where (possibly) a single course of Abalone that costs (not priced) S$300 and takes several days to prepare.
While this blog has strong views about corkage, having spent some time with Hong Kongers (they party really hard), I must agree with Chef Chan’s observations.
That’s ok because the Egg Tarts with Ginger sauce arrived. This is the other famous must-try item that everyone whose had this since Hai Tian Lo has been telling this blog.
Indeed, this blog was blown away with the exquisitely balanced taste of the creamy egg tart with just the hint of ginger. However, this got mixed reviews because some preferred a stronger treatment of ginger. This blog feels that a small shift in either way would have ruined the whole delicate ensemble. This was a good way to finish off the meal.
Chef Chan is a soft-spoken but friendly person with very strong views on how Chinese cuisine should be approached (Without fear but taking care in the details). The food issued from the kitchen was consistent with all feedback and reports from friends who have visited. The service was very good with a ratio of 1 staff to 4 diners with the Restaurant Manager hovering in the background constantly tweaking the service.
I would like to think that the food quality, in terms of execution, suffered a little because of the fact that it was closing soon. This blog can’t help but think what the new menu would be like with the personal touch of the Master.
This is my tenth, or eleventh year away from Singapore and I am not quite sure if I can articulate how I feel about my home country. After all, every national day over the past decade was spent away from Singapore, and this year is no exception.
Looking back, I can hardly remember what I did over the past ten national days. There was one year where I sang Count On Me Singapore in the bathtub on the morning of August 9th. That was in Beijing, probably in 1999 or 2000. There was another year where I tried visiting the Singapore Embassy, only to realize that it was national day and the Embassy was closed for the day. Jeez. That was in 2005 where I was studying in Seoul. I actually forgot it was national day when I left home that day.
But national days over the past decade were mainly about attending the occasional national day gatherings/receptions, mostly in Beijing, and twice in Washington DC, where I was pursuing my masters in international affairs.
Living in four different cities over the past decade has enabled me to see Singapore through the eyes of the many – often interesting, intelligent and discerning - people I have met, though admittedly many harbor fairly stereotypical views of the island.
Mainland Chinese I have met often praise Singapore for its efficiency, good governance, lack of corruption and cleanliness. But they would also lament about how small, hot and humid the country is.
South Koreans generally have a high regard for Singapore. They give top marks to the island for its efficiency and good economic performance. As Koreans took pains to remind me, Singapore companies own some of the most prestigious addresses in downtown Seoul, such as Seoul Finance Center in downtown Gwanghwa-mun. And oh yes, they love Yakun kaya toast!
Hongkongers, on the other hand, generally view Singapore as the territory’s competitor. Many Hongkongers describe Singapore as sterile, uninteresting and too restrictive on personal freedoms, unlike their (still fairly) laissez-faire territory. The only redeeming quality about the island, in the minds of these food-conscious Hongkongers, is Hainanese chicken rice and a whole array of other delectable hawker fare.
As for Americans, well, at least ordinary Americans, I am usually the only Singaporean they have ever met in their lives. In 9 cases out of 10, when I say I am from Singapore, the name Michael Fay would inevitably be brought up. Never mind that it has been almost 14 years since the American teenager was caned in Singapore for vandalism. Then of course there were questions ranging from whether “is it true that you cannot chew gum in Singapore”, to “is it true that you can get jailed if you do not flush the toilet after use?”
My American classmates would usually try to engage me in discussions about why political liberalizations in Singapore had not kept pace with economic development. As for my professors, I would invariably be asked during class discussions to “speak from a Singaporean viewpoint” on issues ranging from regional security, the island’s zeal in embracing FTAs (Free Trade Areas), to the influence and legacy of Confucianism in Singapore (huh?).
So, much as I wished to (occasionally) underplay my nationality, it is about as easy as erasing a permanent 10-cm mole on one’s face.
But if there is anything that had been driven home to me after being away from Singapore for over a decade, it is the sense that Singapore is small and will always be constrained by its size and geographical limitations. The best that the island state can hope to do is play a role that is incommensurate with its size, and remaining useful and relevant both regionally and globally – both of which the country had done with aplomb. Of course, such an awareness of Singapore’s limitations should not be viewed in a pessimistic way, but pragmatically. The awareness stems from the amazement that an artificial creation like Singapore had come this far, coupled with the worry and anxiety of the long-term viability of this artificially created entity whose idea of a shared historical and cultural heritage is to draw from the heritages of our Asian neighbors in Malaysia/Indonesia, India and China.
A country that begins with a clean slate and little historical baggage (except with its closest northern neighbor) is a great recipe for nation building. But will it be an equally good recipe for nation-bonding, and nation-togetherness in the midst of turbulence and turmoil? Will all the singing of Count On Me Singapore tide us through a crisis, given that countries with longer and more deeply-entrenched historical and cultural traditions had crumbled in the face of crisis, wars and devastation?
I do not know, and honest to goodness, do not wish to see any of the above scenarios materialize. All I hope for, at least during this national day, is an authentic bowl of laksa, a plate of truly spicy and sour-rish rojak and a steaming-with-fragrance plate of Hainanese chicken rice.He’s looking to open either in Hong Kong or Singapore. This is interesting because he prefers Hong Kong to Singapore mainly because the Hong Kongers are more appreciative and show more respect whereas while Singaporeans love their food, they tend to haggle over small things like corkage.
FROM http://food.recentrunes.com/?p=1458.
Hong Kongers, according to him, are more willing to spend on food. He fears that Singaporeans are unwilling to experience, for example, the cost of his upcoming menu of new dishes where (possibly) a single course of Abalone that costs (not priced) S$300 and takes several days to prepare.
While this blog has strong views about corkage, having spent some time with Hong Kongers (they party really hard), I must agree with Chef Chan’s observations.
That’s ok because the Egg Tarts with Ginger sauce arrived. This is the other famous must-try item that everyone whose had this since Hai Tian Lo has been telling this blog.
Indeed, this blog was blown away with the exquisitely balanced taste of the creamy egg tart with just the hint of ginger. However, this got mixed reviews because some preferred a stronger treatment of ginger. This blog feels that a small shift in either way would have ruined the whole delicate ensemble. This was a good way to finish off the meal.
Chef Chan is a soft-spoken but friendly person with very strong views on how Chinese cuisine should be approached (Without fear but taking care in the details). The food issued from the kitchen was consistent with all feedback and reports from friends who have visited. The service was very good with a ratio of 1 staff to 4 diners with the Restaurant Manager hovering in the background constantly tweaking the service.
I would like to think that the food quality, in terms of execution, suffered a little because of the fact that it was closing soon. This blog can’t help but think what the new menu would be like with the personal touch of the Master.
elindra
52,427 posts since Jun '04 14 Feb `08, 3:49PM Can ~
But can you be as productive as the Hong Kongers?
They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.
If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.
The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.
So unless we change, we can just stay here and bitch and cry and nothing ever changes.
What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.
InnoHippo
20,123 posts since Jun '04 14 Feb `08, 4:09PM Originally posted by elindra:show
Can ~
But can you be as productive as the Hong Kongers?
They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.
If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.
The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.
So unless we change, we can just stay here and bitch and cry and nothing ever changes.
What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.
INNOHIPPO:
brutally true
eagle:
Well said
FROM FORUM IN SGFORUMS
52,427 posts since Jun '04 14 Feb `08, 3:49PM Can ~
But can you be as productive as the Hong Kongers?
They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.
If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.
The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.
So unless we change, we can just stay here and bitch and cry and nothing ever changes.
What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.
InnoHippo
20,123 posts since Jun '04 14 Feb `08, 4:09PM Originally posted by elindra:show
Can ~
But can you be as productive as the Hong Kongers?
They work like there is no tomorrow. Singaporeans want me time, complain about long work hours, cannot be scolded etc etc.
If you talk about USA, they have a minimum wage in place and high salary paid out but they are still competitive? Why? Because they are very productive. Productivity is high, planning is good, and despite the long hours and tough conditions (you should visit a USA meat processing plant if you have the chance), the people remain chirpy with high morale.
The average Singaporean cannot compete with the average Hong Konger in terms of productivity. They also dun have the Hong Kong never say die attitude.
So unless we change, we can just stay here and bitch and cry and nothing ever changes.
What can employers do? Since Singaporeans are impossible to motivate to be more productive and want high pay and easy job, the easiest way is to cut salary.
INNOHIPPO:
brutally true
eagle:
Well said
FROM FORUM IN SGFORUMS
Friday, March 5, 2010
=DJ UPDATE: GIC Has $5 Bln Paper Loss On UBS Investment - Source (2010/03/05 14:18PM)
--------------------------------------------------------------------------------
(adds background)
By P.R. Venkat
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--The Government of Singapore Investment Corp. has incurred a paper loss of $5 billion on its investment in UBS AG (UBS) after its convertible notes become shares Friday, a person familiar with the situation said.
That represents about 45% of its original $11 billion investment in the Swiss bank.
In 2007, GIC acquired a 9% stake in UBS through convertible notes on a fixed coupon of 9% per annum with a two-year maturity period.
In a filing to the Securities and Exchange Commission in February, GIC said that it will convert the notes into 230.7 million ordinary shares of UBS on March 5, thereby bringing GIC''s stake in UBS to 6.6%.
A GIC spokeswoman confirmed to Dow Jones Newswires that the UBS notes were converted into shares.
Although there is currently a paper loss on GIC''s investment in UBS, the sovereign wealth fund has previously said this is a long-term investment and it has confidence in the prospects of the Swiss bank.
GIC manages Singapore''s foreign-exchange reserves. It is the world''s fourth-largest sovereign fund in terms of money managed, according to Deutsche Bank.
GIC was among a number of global sovereign wealth funds that invested in western banks or subscribed to their fund raising plans during the global financial crisis.
In September last year, GIC cut its stake in Citigroup to below 5% after it exchanged its convertible preferred stock in the bank to common stock and made a profit of US$1.6 billion over the conversion price as part of the transaction. In December, the sovereign wealth fund saw its stake diluted further in the U.S. bank to about 4% after the latest round of capital raising by Citigroup.
During that time, GIC said that will continue its investment in Citigroup and it was confident of the long-term prospects of the bank.
-By P.R. Venkat, Dow Jones Newswires; +65 64154 152; venkat.pr@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today''s most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=42fctzS7EoMCKahz38LMLQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
March 05, 2010 01:18 ET (06:18 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
--------------------------------------------------------------------------------
(adds background)
By P.R. Venkat
Of DOW JONES NEWSWIRES
SINGAPORE (Dow Jones)--The Government of Singapore Investment Corp. has incurred a paper loss of $5 billion on its investment in UBS AG (UBS) after its convertible notes become shares Friday, a person familiar with the situation said.
That represents about 45% of its original $11 billion investment in the Swiss bank.
In 2007, GIC acquired a 9% stake in UBS through convertible notes on a fixed coupon of 9% per annum with a two-year maturity period.
In a filing to the Securities and Exchange Commission in February, GIC said that it will convert the notes into 230.7 million ordinary shares of UBS on March 5, thereby bringing GIC''s stake in UBS to 6.6%.
A GIC spokeswoman confirmed to Dow Jones Newswires that the UBS notes were converted into shares.
Although there is currently a paper loss on GIC''s investment in UBS, the sovereign wealth fund has previously said this is a long-term investment and it has confidence in the prospects of the Swiss bank.
GIC manages Singapore''s foreign-exchange reserves. It is the world''s fourth-largest sovereign fund in terms of money managed, according to Deutsche Bank.
GIC was among a number of global sovereign wealth funds that invested in western banks or subscribed to their fund raising plans during the global financial crisis.
In September last year, GIC cut its stake in Citigroup to below 5% after it exchanged its convertible preferred stock in the bank to common stock and made a profit of US$1.6 billion over the conversion price as part of the transaction. In December, the sovereign wealth fund saw its stake diluted further in the U.S. bank to about 4% after the latest round of capital raising by Citigroup.
During that time, GIC said that will continue its investment in Citigroup and it was confident of the long-term prospects of the bank.
-By P.R. Venkat, Dow Jones Newswires; +65 64154 152; venkat.pr@dowjones.com
Click here to go to Dow Jones NewsPlus, a web front page of today''s most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=42fctzS7EoMCKahz38LMLQ%3D%3D. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
March 05, 2010 01:18 ET (06:18 GMT)
Copyright (c) 2010 Dow Jones & Company, Inc.
Thursday, March 4, 2010
PLEASE KINDLY NOTE THAT WAVE A OF CORRECTIVE WAVE 2 HAS NOT ENDED...
HSI WAVE 2A FINAL TARGET--18200-18500
STI WAVE 2A FINAL TARGET--2600-2625
LONG AT YOUR OWN TICKET TO HELL
now news so bullish--technicals so bearish---CLASSIC CASE OF ONLY IDIOTS WILL KENA TRICK
IDIOTS ARE CONFUSED AT WHEN TO USE REVERSE PSYCHOLOGY OR WHEN TO GO WITH THE FLOW...
Y???
BECAUSE THEY ARE FUCKING IDIOTS..I SAY THAT AND I WILL SAY THAT AGAIN
IDIOTS THINK THEY ARE SMART TO COUNTER ME WITH TERM "REVERSE PSYCHOLOGY"...OH MY GOD--THAT MAKES THEM LOOK EVEN SILLIER--WE TRADERS ARE REVERSING THEM WHEN THE FUCKING IDIOTS THINK THEY REVERSE US!!!!!????
LOOK AT YOURSELVES IN THE MIRROR TO SEE WHETHER YOU HAVE THE FUCKING EXPERIENCE TO REVERSE EXPERIENCED TRADERS
ACT SMART BUT SO FOOLISH,CONFUSED THROUGH AND THROUGH--REALLY FUCKING IDIOTS
HSI WAVE 2A FINAL TARGET--18200-18500
STI WAVE 2A FINAL TARGET--2600-2625
LONG AT YOUR OWN TICKET TO HELL
now news so bullish--technicals so bearish---CLASSIC CASE OF ONLY IDIOTS WILL KENA TRICK
IDIOTS ARE CONFUSED AT WHEN TO USE REVERSE PSYCHOLOGY OR WHEN TO GO WITH THE FLOW...
Y???
BECAUSE THEY ARE FUCKING IDIOTS..I SAY THAT AND I WILL SAY THAT AGAIN
IDIOTS THINK THEY ARE SMART TO COUNTER ME WITH TERM "REVERSE PSYCHOLOGY"...OH MY GOD--THAT MAKES THEM LOOK EVEN SILLIER--WE TRADERS ARE REVERSING THEM WHEN THE FUCKING IDIOTS THINK THEY REVERSE US!!!!!????
LOOK AT YOURSELVES IN THE MIRROR TO SEE WHETHER YOU HAVE THE FUCKING EXPERIENCE TO REVERSE EXPERIENCED TRADERS
ACT SMART BUT SO FOOLISH,CONFUSED THROUGH AND THROUGH--REALLY FUCKING IDIOTS
Singapore, Abu Dhabi Face Losses on UBS, Citigroup (Update2)
March 2 (Bloomberg) -- It took the Government of Singapore Investment Corp. three days in 2007 to agree to prop up UBS AG, ailing from subprime losses. It may take a decade to recoup that investment of 11 billion Swiss francs ($10 billion).
GIC, manager of more than $100 billion of the city-state’s foreign reserves, faces a paper loss of about 5.6 billion francs when it becomes the biggest shareholder of UBS on March 5, as shares of Switzerland’s largest bank trade at a third of the conversion price on notes it holds.
Singapore isn’t alone among sovereign wealth funds facing losses from supporting banks in Europe and the U.S. in the credit crisis. More than $69 billion in investments by such funds has so far produced $20 billion in realized and paper losses, according to data compiled by Bloomberg. Hurt by their contributions to the health of the financial system and stuck with some of the investments for years, sovereign wealth funds may shy away from coming to the banks’ aid the next time.
“Once burned, twice shy,” said Charles Whitehead, a finance law professor at Cornell University in Ithaca, New York, who has tracked the strategy of such funds. “If a weak bank came back to them again for capital in the next crisis, the sovereign wealth funds won’t be there.”
That was one of the findings in a survey by FTI Consulting Inc. published on Feb. 15. In interviews with managers of sovereign wealth funds controlling about $2.5 trillion, FTI found that they are “particularly cautious with regard to supporting further bail-outs of distressed companies.” FTI didn’t identify the funds that took part in its survey.
Personal Touch
European and U.S. bank chiefs made personal pitches to the funds during the height of the mortgage market meltdown. Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec. 6, 2007, and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time.
Acknowledging that recouping the money might take longer than initially expected, Ng said in GIC’s annual report, published in September, that he still has “confidence” in the “long-term prospects” of the investment.
GIC, which declined to comment for this article, will receive 230.7 million UBS shares for its mandatory convertible notes this week for 47.68 francs each. UBS shares closed yesterday at 14.98 francs.
Qatar, Abu Dhabi
“The game turned out not as easy as it may have seemed,” said Florian Esterer, who helps manage about $55 billion, including UBS shares, at Swisscanto Asset Management in Zurich. “It will take probably more like a decade than three years” for UBS shares to return to 2007 levels.
There were some profitable deals too, such as Qatar and Abu Dhabi funds that waited until the depth of the crisis to invest in London-based Barclays Plc and Credit Suisse Group AG of Zurich. Yet one third of the winnings, which totaled $12 billion, resulted from a regulatory change rather than timing.
After the U.S. government required troubled banks to have more common equity instead of weaker tiers of capital, Citigroup Inc. had to offer favorable prices for its preferred shareholders to convert to common. That led to windfall profits of $4 billion for Kuwait and GIC on investments that would have lost $9 billion under their original agreements.
Not As Lucky
Abu Dhabi Investment Authority didn’t benefit because it didn’t buy preferreds when it came to the aid of New York-based Citigroup. So it may face a $4.8 billion paper loss when it is forced to convert its so-called equity units to shares starting this month at a price almost 10 times higher than the current value. Abu Dhabi filed an arbitration claim against Citigroup, which has the most writedowns and losses from the credit crisis, alleging the bank wasn’t forthcoming about its financial health when it was seeking capital. In a December statement, Citigroup said the claim is “without merit.”
A spokesman for the Abu Dhabi Investment Authority declined to comment.
There were other profitable bets on banks during the crisis, such as the September 2008 investment in Goldman Sachs Group Inc. by Warren Buffett’s Berkshire Hathaway Inc. Buffett purchased $5 billion of perpetual preferred stock with a 10 percent dividend, reaping Berkshire $500 million in annual payouts. He also received warrants to buy $5 billion of common stock for $115 a share at any time within five years. Based on yesterday’s closing price of $156.54, Berkshire’s sitting on a paper profit of $1.8 billion on the warrants.
Due Diligence
“One lesson that all investors, including the sovereign wealth funds, learned from this crisis is that you have to do the due diligence before investing,” said Rachel Ziemba, a senior analyst who tracks such funds at Nouriel Roubini’s Roubini Global Economics in New York. “The funds are already looking at fundamentals more closely. They’ll be more wary to take such big stakes in banks in the future.”
The funds’ banking investments in the crisis diverged from their traditional strategy of taking smaller stakes in an array of companies, Ziemba said. The diverse distribution of stakes in close to 100 firms in the U.S. that the China Investment Corp. revealed in a regulatory filing last month is proof that they’re going back to their original goals, she said.
In June, CIC increased its investment in New York-based Morgan Stanley by $1.2 billion, even though its first purchase was out of the money by about $2 billion on the $5.6 billion it put in the Wall Street firm. The fund took part in Morgan Stanley’s sale of new shares, saying it expects the investment bank to become more competitive. The equity units CIC bought in 2007 will convert to stock at $48 in August. Morgan Stanley shares closed yesterday at $28.19. CIC declined to comment.
Follow-up Support
Sovereign wealth funds tend to support the companies in which they had invested in times of need, said Nuno Fernandes, professor of finance at IMD Business School in Lausanne, Switzerland, who has been studying the funds. Still, the recent losses “had huge implications internally, and the funds were criticized by their local constituencies. They will invest less in financials going forward.”
Temasek Holdings Pte, a separate Singapore government fund that oversees more than $120 billion, sold its shares in Charlotte, North Carolina-based Bank of America Corp. for a $4.6 billion loss in early 2009. It had acquired the stock during the conversion of its stake in Merrill Lynch & Co. when the investment bank was bought by Bank of America.
Dilutions, Losses
After the initial round of investments by the sovereign wealth funds in late 2007 and early 2008, banks and brokers announced more losses on their mortgage assets. And they kept going back to investors for more money. The dilutions since then and the losses -- $1.25 trillion worldwide -- may make it difficult for some bank shares to recover to 2007-08 levels.
In the two years following GIC’s investment, UBS’s writedowns and losses from the credit crisis swelled almost threefold to more than $57 billion. UBS boosted the number of its shares by 98 percent since the end of 2007. Citigroup’s share count jumped almost six times in the same period.
After UBS’s capital raising was announced on Dec. 10, 2007, it drew criticism from other shareholders. Profond, a Swiss pension fund, said it was treated unfairly by the bank because it wasn’t offered the same deal, which included a 9 percent interest payment on the mandatory convertible notes sold to GIC and an unidentified Middle Eastern investor. Swiss tabloid Blick christened UBS the “United Bank of Singapore.”
“The majority of people at the end of 2007 expected this crisis to be a lot less severe than it in the end turned out,” said Dirk Hoffmann-Becking, a London-based analyst at Sanford C. Bernstein Ltd.
March 2 (Bloomberg) -- It took the Government of Singapore Investment Corp. three days in 2007 to agree to prop up UBS AG, ailing from subprime losses. It may take a decade to recoup that investment of 11 billion Swiss francs ($10 billion).
GIC, manager of more than $100 billion of the city-state’s foreign reserves, faces a paper loss of about 5.6 billion francs when it becomes the biggest shareholder of UBS on March 5, as shares of Switzerland’s largest bank trade at a third of the conversion price on notes it holds.
Singapore isn’t alone among sovereign wealth funds facing losses from supporting banks in Europe and the U.S. in the credit crisis. More than $69 billion in investments by such funds has so far produced $20 billion in realized and paper losses, according to data compiled by Bloomberg. Hurt by their contributions to the health of the financial system and stuck with some of the investments for years, sovereign wealth funds may shy away from coming to the banks’ aid the next time.
“Once burned, twice shy,” said Charles Whitehead, a finance law professor at Cornell University in Ithaca, New York, who has tracked the strategy of such funds. “If a weak bank came back to them again for capital in the next crisis, the sovereign wealth funds won’t be there.”
That was one of the findings in a survey by FTI Consulting Inc. published on Feb. 15. In interviews with managers of sovereign wealth funds controlling about $2.5 trillion, FTI found that they are “particularly cautious with regard to supporting further bail-outs of distressed companies.” FTI didn’t identify the funds that took part in its survey.
Personal Touch
European and U.S. bank chiefs made personal pitches to the funds during the height of the mortgage market meltdown. Marcel Ospel, then chairman of Zurich-based UBS, called GIC Chief Investment Officer Ng Kok Song, according to comments they made at the time. Talks began on Dec. 6, 2007, and by the evening of Dec. 9, GIC had committed to make its biggest single purchase at the time.
Acknowledging that recouping the money might take longer than initially expected, Ng said in GIC’s annual report, published in September, that he still has “confidence” in the “long-term prospects” of the investment.
GIC, which declined to comment for this article, will receive 230.7 million UBS shares for its mandatory convertible notes this week for 47.68 francs each. UBS shares closed yesterday at 14.98 francs.
Qatar, Abu Dhabi
“The game turned out not as easy as it may have seemed,” said Florian Esterer, who helps manage about $55 billion, including UBS shares, at Swisscanto Asset Management in Zurich. “It will take probably more like a decade than three years” for UBS shares to return to 2007 levels.
There were some profitable deals too, such as Qatar and Abu Dhabi funds that waited until the depth of the crisis to invest in London-based Barclays Plc and Credit Suisse Group AG of Zurich. Yet one third of the winnings, which totaled $12 billion, resulted from a regulatory change rather than timing.
After the U.S. government required troubled banks to have more common equity instead of weaker tiers of capital, Citigroup Inc. had to offer favorable prices for its preferred shareholders to convert to common. That led to windfall profits of $4 billion for Kuwait and GIC on investments that would have lost $9 billion under their original agreements.
Not As Lucky
Abu Dhabi Investment Authority didn’t benefit because it didn’t buy preferreds when it came to the aid of New York-based Citigroup. So it may face a $4.8 billion paper loss when it is forced to convert its so-called equity units to shares starting this month at a price almost 10 times higher than the current value. Abu Dhabi filed an arbitration claim against Citigroup, which has the most writedowns and losses from the credit crisis, alleging the bank wasn’t forthcoming about its financial health when it was seeking capital. In a December statement, Citigroup said the claim is “without merit.”
A spokesman for the Abu Dhabi Investment Authority declined to comment.
There were other profitable bets on banks during the crisis, such as the September 2008 investment in Goldman Sachs Group Inc. by Warren Buffett’s Berkshire Hathaway Inc. Buffett purchased $5 billion of perpetual preferred stock with a 10 percent dividend, reaping Berkshire $500 million in annual payouts. He also received warrants to buy $5 billion of common stock for $115 a share at any time within five years. Based on yesterday’s closing price of $156.54, Berkshire’s sitting on a paper profit of $1.8 billion on the warrants.
Due Diligence
“One lesson that all investors, including the sovereign wealth funds, learned from this crisis is that you have to do the due diligence before investing,” said Rachel Ziemba, a senior analyst who tracks such funds at Nouriel Roubini’s Roubini Global Economics in New York. “The funds are already looking at fundamentals more closely. They’ll be more wary to take such big stakes in banks in the future.”
The funds’ banking investments in the crisis diverged from their traditional strategy of taking smaller stakes in an array of companies, Ziemba said. The diverse distribution of stakes in close to 100 firms in the U.S. that the China Investment Corp. revealed in a regulatory filing last month is proof that they’re going back to their original goals, she said.
In June, CIC increased its investment in New York-based Morgan Stanley by $1.2 billion, even though its first purchase was out of the money by about $2 billion on the $5.6 billion it put in the Wall Street firm. The fund took part in Morgan Stanley’s sale of new shares, saying it expects the investment bank to become more competitive. The equity units CIC bought in 2007 will convert to stock at $48 in August. Morgan Stanley shares closed yesterday at $28.19. CIC declined to comment.
Follow-up Support
Sovereign wealth funds tend to support the companies in which they had invested in times of need, said Nuno Fernandes, professor of finance at IMD Business School in Lausanne, Switzerland, who has been studying the funds. Still, the recent losses “had huge implications internally, and the funds were criticized by their local constituencies. They will invest less in financials going forward.”
Temasek Holdings Pte, a separate Singapore government fund that oversees more than $120 billion, sold its shares in Charlotte, North Carolina-based Bank of America Corp. for a $4.6 billion loss in early 2009. It had acquired the stock during the conversion of its stake in Merrill Lynch & Co. when the investment bank was bought by Bank of America.
Dilutions, Losses
After the initial round of investments by the sovereign wealth funds in late 2007 and early 2008, banks and brokers announced more losses on their mortgage assets. And they kept going back to investors for more money. The dilutions since then and the losses -- $1.25 trillion worldwide -- may make it difficult for some bank shares to recover to 2007-08 levels.
In the two years following GIC’s investment, UBS’s writedowns and losses from the credit crisis swelled almost threefold to more than $57 billion. UBS boosted the number of its shares by 98 percent since the end of 2007. Citigroup’s share count jumped almost six times in the same period.
After UBS’s capital raising was announced on Dec. 10, 2007, it drew criticism from other shareholders. Profond, a Swiss pension fund, said it was treated unfairly by the bank because it wasn’t offered the same deal, which included a 9 percent interest payment on the mandatory convertible notes sold to GIC and an unidentified Middle Eastern investor. Swiss tabloid Blick christened UBS the “United Bank of Singapore.”
“The majority of people at the end of 2007 expected this crisis to be a lot less severe than it in the end turned out,” said Dirk Hoffmann-Becking, a London-based analyst at Sanford C. Bernstein Ltd.
Subscribe to:
Posts (Atom)