9/23/2009

GIC proven critics wrong

Splashing across the front pages of our major newspapers is the news that GIC has made $2.3b profit after selling half of its stakes in Citigroup. And it is sitting on a similar profit on paper, maintaining its 5% share in the bank. 'GIC chief investment officer Ng Kok Song said the "good outcome" was down to judgement calls which "turned out to be right".' Other anaylsts are also showering praises on how GIC managed to turned around and '...getting out of jail free.' All the critics who disparaged GIC and Temasek for buying high and selling low will now have to eat their own words. They have been proven wrong. The strategy and investment decisions of GIC and Temasek were well conceived and right from the beginning. And with more profits coming in, it is time to make more investment decisions.

4 comments:

Anonymous said...

Wow, getting a profit of $2.3 billions ? So it is time to reward HoJinx and her stooges with millions again !!!!!!

But wait a minute ? Did someone say profit ? If I pump in $100,000 dollars for investment, and I get back $40,000 from the investment, do I call $40,000 profit and then reward myself for been insightful and wise ? What happen to the loss of $60,000 ? Write-off, sweep under the carpet or ShittyTimes's job again ?

So here is the deal. You decide whether it is profit from initial investment of $6.88 billions and getting back only 33.8% of original value.

"http://www.theedgesingapore.com/component/content/article/945.html

The Government of Singapore Investment Corp. won't buy more shares in Citigroup Inc. and its stake will be diluted following the U.S. government's investment in the banking giant, two people familiar with the situation said Tuesday, reported Dow Jones Newswire.
"They (GIC) are not planning to buy more shares in Citi, at least for now. So their stake will be diluted," one person told Dow Jones Newswires.

GIC, which manages Singapore's foreign exchange reserves, bought in January $ 6.88 billion in Citigroup preferred shares which if converted to ordinary shares would give the Singapore sovereign wealth fund a 4% stake in the bank.

The U.S. government said Monday that it would insure up to $306 billion of Citigroup's troubled assets and pump $20 billion into the bank. In exchange it will get $27 billion in Citigroup preferred shares and $2.7 billion in warrants for ordinary shares.

"After all that's happened to Citi, GIC prefers the dilution. The view from the top at this point is hold back on investments, especially in the U.S.," a second person said.

A GIC spokeswoman declined to comment."

sgcynic said...

I see why critics of Temasek and GIC have to eat their words. Even IF GIC made a profit, the fact is Temsek made a BIG LOSS ("negative wealth added" "with no regrets").

sgcynic said...

Oops. I left out the word "don't" in my earlier post. My bad.

It should be
I DON'T see why critics of Temasek and GIC have to eat their words. Even IF GIC made a profit, the fact is Temsek made a BIG LOSS ("negative wealth added" "with no regrets").

redbean said...

i think we should add up the losses and the gains and then nett off for the bottom line.

my vegetable seller and chicken rice seller clients are all laughing to the banks because they made the wise judgement to put in their life savings into the stock market in March this year when the market was at the bottom.