Tag Archive: Temasek

Aug
26
2011

Singapore Debt Position and AAA Rating

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by Martin Lee

August 26, 2011

Based on an article published in Fortune Magazine’s on 15th August 2011, Singapore was the eighth most indebted country in the world.

Fortune said that Singapore had debts of US$254 billion (S$307 billion), equivalent to 95% of its gross domestic product (GDP).

MOF has clarified that the Fortune Magazine’s article is misleading as it only looks at Singapore’s liabilities and not its assets.

MOF maintains that Singapore’s financial reserves are well in excess of its debt and that Singapore is a debt creditor and not a debtor.

Part of Singapore’s reserves, which includes not just its financial assets but also it’s state land and buildings, are managed by Temasek Holdings and GIC.

Drawing on the past reserves requires the approval of the President of Singapore, who serves as a “second key” in safeguarding our reserves. For example, the current President, S R Nathan, has approved the use of our past reserves to fund land reclamation (a few times since 2001) and land acquisition for SERS projects (27 times since 2002).

In 2008, the reserves were also drawn down for a resilience package to help Singaporeans tide through the global financial crisis.

S&P has recently re-affirmed on Singapore’s long-term AAA rating.

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Jun
29
2011

China Yurun Food Group Hurt by Muddy Waters Rumors

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by Martin Lee

June 29, 2011

The share price of Chinese meat processor China Yurun Food Group has come under pressure in the last few days with rumors that Muddy Waters is going to release a negative research report on it.

A quick check at the Muddy Waters website shows that their latest target is Spreadtrum, Communications Inc (SPRD).

Singapore state investor Temasek Holdings and China-focused private equity firm Hopu had invested in Yurun last year. Fund houses J.P. Morgan Asset Management and Fidelity were also shareholders.

While the rumors have not been confirmed yet, the recent spate of negative publicity involved China based companies does bring out an interesting point.

If big institutional investors with their research teams are not able to detect an ongoing fraud, what chance does an individual retail investor has?

In an earlier case involving Sino-Forest, renowned hedge fund manager John Paulson also got burnt.

In a note to his private investors, John Paulson mentioned that as a passive investor in public companies, he had access to the same information that everyone else does.

While his firm does conduct considerable due diligence including site visits, they must still rely on audits and underwriter due diligence that financial statements and disclosures are accurate.

For Sino-Forest, John Paulson also knew that Temasek Holdings had acquired a 16% stake back in March 2007 after months of due diligence. This was something that gave him comfort then, but as it turns out, doesn’t count for anything.

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Feb
25
2010

Temasek Launches 15 and 25 Year Sing-Dollar Bonds

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by Martin Lee

February 25, 2010

Temasek Holdings yesterday announced that it has priced S$500 million 3.785% Guaranteed Notes due 2025 and S$500 million 4.0475% Guaranteed Notes due 2035 to be issued by its wholly owned subsidiary, Temasek Financial (I) Limited, under the Issuer’s US$10.0 billion Guaranteed Global Medium Term Note Program.

The 15-Year Notes and the 25-Year Notes will be fully and unconditionally guaranteed by Temasek.

temasek logoThe 15-Year Notes were priced at a spread of 50 bps over 15-year S$ Swap Offer Rates. The issue price was at par, with a yield of 3.785%. The 25-Year Notes were priced at a spread of 65 bps over interpolated 20-year and 30-year S$ Swap Offer Rates. The issue price was at par, with a yield of 4.0475%.

Temasek is rated AAA by Standard & Poor’s and Aaa by Moody’s Investors Service, and the 15-Year Notes and the 25-Year Notes are rated AAA by Standard & Poor’s and Aaa by Moody’s Investors Service.

The Issuer intends to provide the net proceeds from the offering of the 15-Year Notes and the 25-Year Notes to Temasek and its investment holding companies to fund their ordinary course of business.

The offering is scheduled to close on 5 March 2010.

The 15-Year Notes and the 25-Year Notes are expected to be listed on the Singapore Exchange Securities Trading Limited on 8 March 2010.

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Feb
11
2010

Temasek to Launch Seatown

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by Martin Lee

February 11, 2010

Temasek Holdings is to set up a wholly owned subsidiary called Seatown with a war chest of up to $5bn when fully-established.

The unit will be led by Charles Ong, its chief strategist, and be based at The Atrium at Orchard. Mr Ong is a former investment banker who joined Temasek in 2002.

Temasek will provide seed finance to Seatown, which is also expected to also attract backing from institutional investors.

Seatown’s investment mandate is expected to include not only stocks and bonds, but might also include alternative assets.

Ho ChingSeatown could turn out to be an avenue whereby local Singaporeans can co-invest alongside Temasek. Last July, the CEO of Temasek Ho Ching, it might ultimately allow the public to invest with it in projects.

Actually, Temasek Holdings all along had another wholly owned subsidiary called Fullerton Fund Management which operates as a fund management company catering to institutional and high net-worth individuals. In recent times, it has opened up some of its funds to retail investors.

At this point, it is still unclear how Seatown would be set up to allow retail investors to be part of it. As Ho Ching mentioned, they are still thinking through and things might only be clearer in 6 to 12 months time.

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Feb
09
2010

Temasek to Raise More Money From Bond Offering

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by Martin Lee

February 9, 2010

Temasek Holdings has sold another US$1 billion in bonds, its fifth offering in as many months. Since October last year, Temasek has raised more than $4 billion through bond sales, including yesterday’s issue.

temasek bondsThe latest 10-year offering will have a coupon rate of 3.265 per cent, which is lower than the roughly 4.3% yield in a similar offering last October. The bond is denominated in size of US$250,000.

Temasek has also doubled its global medium-term note programme so it now has the scope to issue US$10 billion (S$14.2 billion) in bonds, up from the previous limit of US$5 billion.

The reason given for the bond offering is to fund the ‘ordinary course of business’ of Temasek and its investment holding companies.

My wishlist: Temasek to issue S$ bonds to CPF board (instead of private investors) with the higher yield passing through to CPF members.

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