Are Olam Bonds Worth Subscribing to?

sender says 11 years ago

Dee on Olam: “..sale of the century”
CIO of GIC on UBS: “… once in a lifetime opportunity”

same stroke… will it yield a different outcome?

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Jimmy says 11 years ago

A common problem among many investment articles seems to be the total lack of regard of an investment proposition from a portfolio perspective and a focus only on the merits of the individual deal in question. Such an article from the national papers is even more deplorable considering the fact that from what I read many retirees have substantial retirement savings parked in Olam.

For e.g., purchasing US$750M worth of 13+% yielding bonds might be of “good value” to an investment vehicle with US$192billion in assets and expected strong and stable capital injections from the MOF in the future, but it sure as hell ain’t “good value” for a retired uncle to subscribe $50,000 worth of Olam bonds when he has no employment income and is highly dependent on his $400,000 worth of dividend yielding portfolio for living expenses during retirement.

A columnist who advocates for common citizens to subscribe for junk bonds by using hyperbolic selective quotations from others has questionable journalistic ethics. While I admit there may be profitable opportunities in such complicated high risk transactions, junk bonds are not called junk for no good reason and it is hard to argue that common folks with perhaps basic financial knowledge at best should be dabbling in them.

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