Temasek - A closed-end sovereign wealth fund?

Was just reading Temasek Holdings annual report for year ending March 2008. A couple of notable insights into the workings of this investment vehicle whose sole shareholder is the MOF (Ministry of Finance):

a. It's becoming harder and harder to make money - first time in five years where Temasek had a negative wealth added figure (Wealth added is a benchmark which measures the return against cost of capital) Bearing in mind that as the portfolio value increases, the absolute cost of capital increases as well, so Temasek has to make even more money in order to beat this benchmark.

b. Divestment out of 'emerging' Asia into 'stable' Europe. Guess the Asian economies are looking a tad forthy?

c. MOF does not inject capital regularly but instead on an ad-hoc basis. I wonder if Temasek allows any withdrawal of funds by MOF? From the report, it seems that MOF has never drawn-down any funds from Temasek so it could imply that the capital injections by MOF are excess funds after paying down CPF, pensions, dividends?

d. Would Temasek be better off paying a bigger dividend (to Singaporeans) if there are no worth-while investments, rather than chasing investments which on hindsight look a bit too expensive at the current climate?

The investment report is definitely worth a read - especially if you want some insight on Temasek's investment strategies, based upon value investing principles.

Reykjavik, Iceland - My First Marathon

Yeap that's me across the finishing line. Thanks darling!

31 years, 8 months later, I finally fulfilled my dream of finishing a marathon. Braving the notoriously wet and windy weather in August in Reykjavik, Iceland, I trudged wearily across the finishing line, with a time of 4hrs 38mins.

This accomplishment is dedicated to my loving wife, a logistic supremo navigating the course effortlessly to provide much needed replenishment both for the mind and my body.
Darling, you were never far from me in this 26mile journey.

And not forgetting my family in Singapore, where in my darkest moments, the thoughts of you all carried me further than I could imagine.

The RMT workers go on strike

On days like this, I wish I was travelling with them.
Let's hope the eurostar is not affected, else I will have to swim back to London...

Olympics Medals Count - A matter of perspective

From the BBC:From the NY times:

Terminal 5 is working

Gallant efforts by British Airways to dispel the negativity surrounding Terminal 5. Interesting to note that this effort is piloted by BA and not BAA Heathrow.

The Great Britain Sale - Every Pound has to go!!

Over the last couple of days, the sterling pound dropped like a sinking anchor due to some really negative remarks by the Bank of England in the latest inflation report. The UK's GDP main contributors are financial services and construction, both are in a deep funk right now and is looking to get even worse. With the weakening pound, imports will get even more expensive, exacerbating the rate of inflation.
When wife and I came over, the GBPSGD exchange rate was 3.10 - Now, it has dropped over 20% to 2.63. Ouch!

Room for improvement - Straits Times Interactive

Have been taking advantage of the two week free passes to the Singapore Straits Times online website to do some reading up. Unfortunately the whole experience was quite a let-down.

Having been fed high quality content websites like the NY times or the bbc online, I found it difficult to appreciate the online version of the Straits Times.

Some comments about the Straits Times online edition:

a. I cannot fathom why they wanted a print version of the SS. Hardly anyone would want to zoom in/zoom out of a 15inch computer screen to see a print version normally printed in broadsheet size. I found the whole experience tedious and was put-off by all the print-ads. My guess is that this is more likely for advertisers - SPH is using this as another avenue to entice potential advertisers.

b. Un-customisable front page. Start working on allowing users to customise what they want to see on the front page! Well, at the very least, allow a change of colours?!!!

c. Content, Content, Content. Organising the available content into a user-friendly user-platable online platform requires much thought and design. Here the online SS fails miserably - both in terms of the quality and the delivery. Quality-wise, well we can acknowledge that our writers appeal only to a relatively small market so it is acceptable. But delivery-wise, surely we can take a leaf out of the other websites? Why can't they embed streaming video together with the news article instead of directing me to another website?

d. Integration, Integration, Integration. The online SS content is distributed across various 'hip' sounding platforms like RazorTV, Stomp, Urban, DigitalLife, etc. To me at least, it is all very confusing. I want to read articles relating to lifestyle and I find content distributed across RazorTV, Stomp and Urban. They should be integrated into a single access point for the online user.

A poor effort indeed. Try harder Straits Times. Take a leaf out from BBC and NY Times.

Temasek has learnt its lesson well

Diving into the details of the latest Merrill Lynch cash call, it is definitely a 'sweet' deal for Temasek. Temasek has learnt its lesson well since their Barclays intervention.
However, couple of things to note:
a. The 'reset' clause will no longer allow going forward; ie if there are further cash calls, Temasek will no longer be able to exercise the right to purchase more stocks at the new issued price
b. There may be more cash calls for ML going forward, looking at their current risky debt holdings

Hopefully, this will buy more time for ML to unload their risky debt at a better price.

Singapore bum investment decisions

Here's a not-so-flattering take by the ft on the investment decisions undertaken by some of the Singapore companies.
Ouch...

The competition gets even more intense

With the credit crunch in full swing, many US and UK based finance professionals are heading to Singapore's shores.
This mass exodus of 'talented' foreigners into sunny Singapore to escape or as a result of the mass culling in New York and London looks set to continue at least for the next few months.
With this exponential arrival of skilled migrants, there will be new opportunites to be uncovered but yet stiffer competition to be faced.
Local Singaporeans will once again, as usual, have to prove their worth in this rising tide of skilled foreign talents. Hopefully, the quality of our people will be enhanced through even tougher competition.

Capitalism and Greed

It is immensely exciting to witness the near capitulation of Fannie and Freddie for it bears the following implication:

a. The US brand of capitalism is not insulated from disaster - the US will no longer be able to stand on a economic ethos high ground and preach the 'goodness' of their brand of capitalism

b. Much of the failings can be attributed to greed and human nature. The US financial systems have their internal checks and balances, but human greed cannot be easily checked nor balanced. How can we prevent financial institutions from leveraging to the tills, when everyone is doing the same?

The current de-leveraging process will take years to unwind, and the excesses built up over the last decade will take as much, if not more time to work off.

Expect the worst and hope for the best.

Did Temasek make a mistake?

It is interesting to note that in the latest cash call by Barclays, Temasek only contributed a measly 200 million pounds. I think This has more to do with a diluation issue than having a real interest in buying the share at a 9% discount to the stock price as of Tuesday.
So, if we apply Buffet's definition of a good stock (of buying more when the price drops), then indeed Temasek's action may have the following implications:
a. That they may have paid too much last summer
b. That there may be more write-downs for Barclays and a further cash call

Ouch!