Investment Duds Down Under by Singapore Companies
Maybe the buying spree will look better once the market lifts- but the fact remains that had these Singapore companies resisted the urge to invest when prices were skyrocketing in 2007, they wouldn’t be saddled with enormous paper losses. Topping the pile is Singapore Power (SP) which laid out a A$13.9 billion bid for Alinta east coast assets in August 2007 in the hopes of flipping it into SP Ausnet (SP owns 51 per cent) but failed to do so due to the high price of acquiring Alinta. This has left Singapore Power lumbered with A$17bn in debt and the same power assets are today probably worth only A$6bn. On 4 August 2008, the company changed its name from Alinta to Jemena, an aboriginal word that means “to hear, listen and think”. We think that means SP should do some serious hearing, listening, and thinking.
Second is Capitaland. While it is recording record S$762.7 million profits for the first half of 2008 in Singapore, its Australian arm (it owns 54%), Australand Property Group (ALZ:AU) is planning a rights offer at 60 Australian cents each to reduce debt and fund future projects after seeing a huge plunge in property prices as the Reserve Bank of Australia raised interest rates to a 12-year high. ALZ:AU was at its peak A$2.60 in December 2007 and closed just A$0.58 on 4 Aug 2008.
Lastly, even Singapore’s Temasek doesn’t come off unscathed as it ploughed A$400m into ABC Learning (ASX:ABS), the world’s biggest provider of Child Care Centres, at A$7.30 a share 12 months ago and closed at A$0.69 on 4 Aug 2008 since it executed a debt-funded expansion and its over 1,000 centres in the USA is seeing dwindling enrollment with the global economic crunch.
Do leave a comment. We follow!
Subscribe to the feed to get future articles delivered to your reader.
Brilliant Investing by Singapore’s Temasek Holdings
Temasek Holdings recently raised its investment in Merrill Lynch when troubled ML announced plans to raise capital by way of share offerings. We were wondering why Singapore keeps buying into the troubled companies of the US when more doom and gloom is expected. Isn’t it bad enough that Temasek’s initial investment in December 2007 and March 2008 at US$48 a share has resulted in a 50% paper loss? (ML is now hovering in the mid US$20’s).
Well, it turns out that Temasek’s initial investment came with a price-reset clause which states that if Merrill sells new shares within one year at a price less than US$48, then Merrill will need to pay Temasek the difference in either cash or shares. Brilliant!
Backgrounder on Temasek Holdings
Singapore’s lack of natural resources makes it imperative for the government to invest in other countries in order to grow. While Singapore’s Ministry of Finance was the original portfolio holder, today, Temasek Holdings operates as an autonomous and professional investment house, guided by an independent board. Essentially, Temasek Holdings was set up to better manage the MOF’s accumulated portfolio of companies. The initial portfolio in 1974 was S$354 million. Today, the market value of Temasek’s portfolio has grown to S$164 billion as at 31 March 2007.
Some Trivia
There are actually several famous Temasek’s in Singapore. The ones listed below are all academic in nature although there are also clubs, sports groups, etc:
(1) Temasek Secondary School
(2) Temasek Polytechnic
(3) Temasek Junior College
(4) Temasek Laboratories at NUS
Do leave a comment. We follow!
Subscribe to the feed to get future articles delivered to your reader.
Tired of Waiting for the iPhone
I don’t know about you but I’ve totally given up on getting an iPhone in Singapore. We had previously written about the failure of the iPhone in terms of trying to keep phones locked only to have about 1.7 million phones go “missing”. Today, I’m writing about iPhone’s failure to get its phones out to the hands of customers who want them- to the point of really turning them off Apple altogether.
The more I think about it, the more I believe it is pointless to have one. I already have a full fledged 3G PDA and I never use any of its features except for the phone. Everything else is just there, just because. Why did I get it? It cost less than S$100 because of vouchers, discounts, and telco packages. But then Singapore Telecom announced they were finally bringing in the iPhone. For real this time. Coupled with the huge discounts and great improvements announced by Steve Jobs- especially that it is now 3G, I thought, “hey, why not go ahead and get another phone?”
But now I’ve changed my mind, especially after hearing rumors that it’s going to cost S$1000, even with a 2 year tie-up. Of course there are rumors that its going to be really cheap, but only if you get other packages bundled in to your monthly, but who really knows at this point? All we know for sure is is that the target to sell the iPhone in Singapore has moved again … and again … and that no one really knows at this point how much the iPhone is also going to sell for in Singapore.
It’s really bad marketing on Apple’s part. Really bad.
Do leave a comment. We follow!
Subscribe to the feed to get future articles delivered to your reader.
