A walk thru Chinatown

With my new blog, Singapore Orchids, I have replaced the orchids in this blog with a new series on Chinatown. Orchid lovers and Jaunty can view the orchids in the link to Singapore Orchids. Cheers.

All the way, DBS-Citibank!

Just as I raised my hope for a 7% dividend, it fell flat in my face. And my estimate was way way off. The 7% would have given a return of US$482m pa. GIC could have the money back in no time. Now it is all gone. But don't worry, there is a better and more promising deal. The conversion price which was US$26.35 was watered down to US$3.25 and the conversion to ordinary shares will give GIC an 11% stake in Citibank, the second largest shareholder next to the US govt. And there are more promises along the way. If the market recovers and Citi's price shot up, we could reap much higher returns. If the market plunges and Citi became insolvent or be nationalised, gone with the wind. But the second 'IF' is only a big If. No need to worry about that. In the long term everything will be fine. Now the more juicy part. If our US$6.88b can give us 11% stake in Citibank, it means that the whole bank can be had for no more than US$70b. This is definitely very affordable. Shouldn't GIC launch a general take over of Citibank and merge it with DBS to become an international giant bank? And another piece of good news. There are so many good news and things are looking much rosier. What's that? Oh, Citibank's share price fell to US$1.55. This simply means we could have the bank for less than US$35b. And with already 11% in our hands, US$30b should do the trick. I don't think the US govt will object if we let Chip Goodyear to negotiate the deal. The US govt must be more comfortable with Goodyear in charge. Wow, I think we have all these planned in advance. Great foresight and pro active thinking and decision making. We must have see all these coming. Go for it GIC! Take Citibank under our wings, but make sure the top management are Singaporeans. The Americans can be co opted as advisers. I will definitely bank with DBS Citibank.

Talk, shout, scream, kpkb, beat the dustbin!

Singaporeans must make noise, make all the noise that is necessary when they see something is not right. For if they don't, it will be taken that everything is alright. See, no one complaining. Everything must be fine. If Singaporeans are willing to accept all the nonsense thrown at them, their money kept away from them, take their money from them, and let things happened the way others want it their way, they have only themselves to blame for the shit that are being thrown into their faces. The fate of the people is in their own hands. And they can't say they have no opportunity to make their views and opinions heard. In the past TOM would have the absolute authority to sieve through what they want or do not want to be printed, to be read. Today the internet is there. Just hit the keyboard and out it goes. No one can stop you, except yourself. It is all up to you now. You can only blame yourself if you allow people to abuse you and rob you of your right, your money and your voice. Go, make all the noise that you want and be heard.

7% of hope

Temasek owns 261 million preferred shares of Citibank that pay 7% fixed returns. What does this mean? 7% of what? 7% of the value of the 261 mil worth of shares or 7% of the par value of the shares? If it is the latter, then nothing much to talk about as the amount will come to about US$18m pa, assuming the par value is US$1. Now, if the return is based on the total sum paid for the preferred shares, eg at US$10 each, the return will be a neat US$180m pa. The amount will vary accounting to the share price agreed upon. This is quite likely as the returns must be gauge against who Temasek could get from other fixed income products other than minibonds. Oh, maybe minibond returns are factored in as these bonds were then yielding 4 or 5% returns. Which is which, this has not been explained. 7% of what? The return must be quite sizeable or else Citi will not be attempting to force the conversion of these shares to ordinary shares earning no fixed returns. Is there a 7% of hope?

Right to know or right not to know?

We have heard the huge losses of Temasek's investment, all $58b! Now, don't ever poof poof this as small change. It is a very huge sum of money. What about GIC? How much has it lost? Rumours and speculations are that it has lost more than $100b! Given the $550b portfolio that it was managing then, it is unlikely that it can escape the meltdown with less than 30% loss. Do the citizens have the right to know how much we have lost? Or shall this be kept under veil in the name of secrecy or professional expediency? Is it acceptable not to tell the people how much we have lost? Is this the people's money? If so, can we ask and be told of the real numbers? Or shall we be complacent and just trust that the money is in good hands?