20160212 Is Temasek speculating with our reserves, again?

Temasek divested a record S$10 billion plus in 19 listed US companies from September to December last year.

As at 30 Sep 2015, Temasek had 20 positions worth about US$10.5 billion/S$14 billion. Some of these investments were held for years, others only a few months. At the end of Q4 2015, 19 positions were closed out. These 19 investments were valued at about S$11 billion at the end of Q3.

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During Q3 2015 (previous quarter) when global stock markets underwent a huge correction, Temasek had already reduced its holdings by about US$5.45 billion/S$7.6 billion (below). (market value at end of quarter, actual value not disclosed by Temasek)

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All in, Temasek divested S$18 billion worth of ‘long-term’ investments within 6 months.

Temasek’s definition of long-term investments:

In Q2 2015, Temasek made the following new investments:

1) Bought 22.6 million Univar Inc shares valued at S$847 million. (US$1 = S$1.347) Divested in Q4 2015.

Source: Yahoo

2) Bought 11.56 million EMC COrp shares valued at S$411 million and divested in Q4 2015.

3) Bought 12.3 million Virtu Financial Inc shares valued at S$389 million, divested in the same quarter.

Is this long-term investment?

What is more troubling – Temasek has been betting billions and liquidating positions without regard to the risks involved. An example would be Alibaba (below).

For Temasek, long term = short term = tikam tikam. No?

Questions:

Have the 19 listed US companies become risky overnight?
Did ‘sound’ fundamentals of every company become unsound?
Why does Temasek need to raise so much cash?
Is the cash needed because of possible capital raising by its Chinese investments?
Has Temasek been forced to sell US assets because its Chinese investments are mostly underwater?  etc.

The public has been repeatedly informed our SWFs are long-term investors. When Temasek divested a large number of long-term investments at one go, there is a lot to be explained in Parliament, if parliament represents the people.

Failure to explain to Singaporeans how tax dollars are managed will breed more distrust, ie the public will perceive Temasek to be a speculator/punter and not a long-term investor.

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5 Responses to 20160212 Is Temasek speculating with our reserves, again?

  1. Xmen says:

    First, liquidating stocks in Q3 2015 is a good move in retrospect.

    That said, the liquidation was probably used to raise cash for Stanchart, Olam, and other Chinese investments.

    Following the transactions, Temasek’s overall portfolio is likely to become less liquid. (Chinese holdings are basically frozen at this time.) Throwing good money after bad at Stanchart, Olam, and Chinese banks is going make matters worse. Financials are collapsing everywhere and Temasek is in the middle of it. Too bad.

    Now, can we hire someone else to run Temasek?

    • Phillip Ang says:

      If investment is simply coin tossing as what Ho Ching does, then Ah Kow and Ahmad should be fit to be CEO. 🙂
      It should be a good move to liquidate investments but problem with Temasek is all these funds will likely be used for capital raising and not investing at rock bottom prices.
      In its upcoming annual report, Temasek will be able to hoodwink Singaporeans – it was ahead of the curve with net divestment in excess of perhaps $20 billion?
      But we already know where these funds will end up.
      No worries, our PM is watching the deteriorating situation very very closely.

  2. Sinkie says:

    All I can say is that those who have to rely on CPF Life for retirement are fucked as authorities are forced to lock in more CPF funds to ensure solvency without having to drastically devalue SGD — older payout age (67, 70 yrs old), smaller monthly payouts by applying secret non-transparent discount rates, higher minimum retirement sum by increasing beyond the current annual 3% along the way, reducing the amount of retirement sum that can be pledged using HDB (as HDB flats ages & becomes more worthless).

  3. WY says:

    May I know how do you know the positions and sizes of Temasek for Alibaba?
    Any source to refer to?
    Thanks

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