GIC takes “undisclosed” loss on UBS?

I refer to the article “GIC pares stake in UBS at a loss; combined strategy with Citigroup sees positive return” (Straits Times, May 16).

It states that “GIC, Singapore’s sovereign wealth fund, which invested in UBS to support it during the 2008/09 global financial crisis, said it has cut its stake in the bank at a loss, partly because of changes in the lender’s strategy and business.

GIC sold a 2.4 per cent stake in the Swiss bank, paring its holding to 2.7 per cent from 5.1 per cent.”

How much was the loss?

In this connection, according to the article “GIC estimated to have lost at least US$7B of reserves in UBS investments” (The Independent SG, May 16) – “In all, GIC is estimated to have lost at least US$7 billion in UBS shares, assuming the remaining 2.7 per cent of UBS shares were also to be sold at current prices”.

With regard to “While saying that it was “disappointed” that its UBS investment resulted in a loss, GIC noted in its statement that its investment in US bank Citigroup, also made at the height of the global financial crisis, was in the black and that combined returns for UBS and Citi were positive in “mark-to-market terms” –

What is the annualised return on these two investments?

As to “We remain a shareholder of Citibank,” a GIC spokeswoman said in an email to Reuters on Tuesday (May 16).

GIC reduced its stake in Citi to under 5 per cent in 2009 from over 9 per cent but didn’t disclose subsequent holdings, said Reuters” – according to the article “Singapore sovereign fund GIC says it pared UBS stake at a loss” (Channel NewsAsia, May 16) – “GIC declined to comment on whether it still owned a slice of Citigroup, although Reuters data showed GIC was not listed as among the top 50 Citi shareholders on Monday”.

“The fund measures its performance on an overall portfolio basis, based on long term rather than annual returns. GIC also noted on Tuesday that its portfolio averaged 4 per year per year real returns over the 20-year period from 1996 to 2016. This period included the Global Financial Crisis and the UBS and Citigroup investments.

UBS, the world’s biggest wealth manager, said on Monday that GIC intended to place up to 93 million existing shares in UBS through a sale to institutional investors.

Shares of the Swiss bank closed 1.3 per cent lower at 16.61 Swiss francs after the news, which unusually came during trading hours.

At the closing price, 93 million shares would be worth 1.54 billion Swiss francs (US$1.55 billion).

GIC was one of the first sovereign funds to pump billions into Western banks, which were rocked by the financial crisis and suffered deep losses.

Singapore took a 9 per cent stake in UBS in 2007 via an emergency capital injection when UBS unveiled US$10 billion worth of subprime write downs, Reuters reported. UBS said at that time that GIC would invest 11 billion francs.

The sovereign fund converted its 11 billion franc investment in UBS notes into shares in 2010.”

 

Leong Sze Hian

 

 

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28 Responses to “GIC takes “undisclosed” loss on UBS?”

  • Amos: 1 PAP: 0:

    35% President Tony Tan was executive director at GIC (LKY was Chairman) and led the GIC investment into UBS. He thought he was smart by first investing in UBS convertible bond with a high coupon. What he did not know was the extent of the losses at UBS. The billions from the convertible bond were not enough and UBS had to raise more equity forcing conversion of the convertible bond resulting in losses of billions for GIC. And later Tony Tan as President is suppose to protect reserves. What a joke!

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  • oxygen:

    CHARLES GOODYEAR would NOT be putting any money into banking or property stocks after GFC but wisely into natural resources.

    PAST TENSE SAID he was “heaven sent” to Sinkieland’s lucky fortune BUT HE LEFT ONLY AFTER A FEW MONTHS without making an impact.

    In PAPpyland, good people don’t last, only the dumbest of the dumb nodding cows of political correctness stays on indefinitely (and protected) to reap rich harvest whilst the nation rots away.

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  • Bad investment:

    UBS is a bad investment…
    Sad for Singapore…

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  • oxygen:

    AND OUR IMPRISONED CPF past 55 can keep crying for its never-going-to-happen release from illegal “perpetual trusteeship” to mortality.

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  • LIONS:

    DUN WORRY,YOU CAN SURELY FIND THE INFO FROM ‘FT’ NEWS AGENCIES SOMEWHERE,SOMEHOW?

    MSM HERE ONLY REPORTS ‘sounds good feels good’ kinda news that ‘PAPagate’???

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  • oxygen:

    AFTER ALL, THE MONEY LOST does NOT belong to those evergreen apprentices, it is only CPF gambling chips of mostly peasants – definitely not the natural or unnatural aristocrats and business tycoons – 70% of them are too stupid to even discover they are stupid.

    The other a lot smarter 30% minority is left to moan and groan to their graveyard, right?

    MORE TO COME. GIC is substantial shareholder of Australian uranium miner – Paladin Energy Ltd bought mostly over 80c per shares (some could be higher than A$2 per share) is today trading at 7.2c per share. That is at least 90% loss of book purchase value.

    https://www.facebook.com/PeopleForTrueRuleOfLaw/posts/819011848132218

    Paladin survival is HANGING IN THE BALANCE of a major refinancing exercise after accumulating losses of hundreds of millions in recent years. Its balance sheet is depleted. If the current restructuring falls through – Paladin Energy shares will fall to ZERO – just like your 99-yr lease HDB property.

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  • Boh Kia See:

    When GIC invested in UBS–there were a lot of incredulous responses from the investment fraternity. So much so that our president, then part of GIC “leadership” went on TV to try to explain why GIC invested in UBS at that time. They were the laughing stock within investment circles.

    It would be interesting to review the tape and ascertain what was said and compare it with the situation as it played out. Now this bloke is the “president” and is supposed to look after the “reserves”. He was part of the management team that made the decision and lose our CPF funds. So how is he going to look after our “reserves”?

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  • VTO2020:

    in relation to this, we MUST support DR TAN CHENG BOCK in this case of EP of against our constitution. Else, another sweeping under the carpet of this huge loss.

    VTO PAP 2020.

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  • rukidding:

    As usual…..

    …. information are avaliable on…..”need to know basis” ?

    …no need accountability just like the many other fiasco & incidents.

    ie :

    a) Lehman investment by AIMs ?
    b) SGH hep incidents ?
    c)Mrt incidents ?
    d)…and the list goes on…..

    No wonder they labelled their voters and supporters as “Dafts” ?

    Whats worst….nobody is concern about how the “Native Born” are “slowly, but surely and in double quick time”….being “out numbered in voting demograhics” by the “introduction and production” of New Citizens with blantant dis-regard as to how the “Native True blues” would be “affected, years down the road” ?

    Ghee….?

    Nobody “dares ask or questioned” this P.A.P. government on this issue ?

    Funny indeed ?

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  • Rabble-rouser:

    The present-day PAP regime has a culture for REWARDING FAILURE. From rewarding themselves Millions in pay [using the achievements from the 1st generation PAP leaders to inflate their worth]; they have proceeded to grow very complacent, taking their eye off the ball & simply grew comfortable in their self-created comfort zones while the masses toiled 24/7 for a measly pay to support these political elites. And the world is changing rapidly.
    GIC (Generally Incompetent Clowns) & Temasek Holdings (Tummy-sick) hold up as PAP’s incompetent managers of S’pore Inc. reserves. Their list of failures were simply unacceptable in any country who have accountability & fiduciary responsibility to it’s citizens. But S’pore under the PAP is uniquely different – in fact, they reward failure & utter incompetence as key values for going forward. No wonder, the following are mere examples of PAP failure culture:-
    * NOL ran aground under the management of a Meritocratic Scholar;
    * S’pore Post revealing dubious M&A transactions during the helm of a FOREIGN TALENT!;
    * SGX began their rapid descent down the rabbit hole when the FOREIGN TALENT CEO was more interested in developing derivatives rather than cultivating IPOs;
    * SMRT’s engineering, maintenance & operations took a back-seat while the M’sia-born CEO expanded the retail operations to show short-term profitability & reap huge bonuses but now we know the real cost of her reign.
    Even the GIC in their media statement choose to lump their UBS investment with Citigroup, “was in the black and that combined returns for UBS and Citi were positive in “mark-to-market terms”. IS THIS A VEILED & PATHETIC ATTEMPT TO MITIGATE THEIR HUGE LOSS UNDER UBS? And WHERE ARE YOUR NUMBERS? Like the 30% increase in water rates, there are no numbers to support their case & for the public to study & decipher? Unbelievable! No wonder PAP excels in throttling dissent & avoiding hard questions.
    Roy Ngerng in Taiwan must be laughing at S’pore & those S’poreans who criticized him ‘as a disruptive force’ for creating the CPF fuss. Hindsight had proven him right & the PAP wrong (especially for PM LHL). The Defamation sum Roy had paid now looks more like Extortion money.
    The 70% voters now look like damn fools for doing what seem like a correct action then – retain the Status Quo. They now have to live with their terrible mistake!

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  • Now We Know...:

    No wonder so many increases these days!

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  • help finance the competence:

    //No wonder so many increases these days//

    aiyoh. costs (loss) have to be socialized in some other forms and in the name of this and that to help finance the competence (or incompetence) of the white idiotic gang for them to bet on daft sinkies behalf.

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  • KNN:

    Don’t worry … PAPies will be using your $20M yearly injection into CPF to cover up their losses … Drawdown age will be increased to 70.

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  • Amos: 1 PAP: 0:

    Why hide losses at UBS with gains from Citibank? GIC became the largest investor in UBS and also the largest loser.

    When UBS came to GIC looking for an equity injection GIC said they have been waiting for a long time to invest in UBS because it was the largest Swiss bank with hundred of billions under management.

    After the LTCM fiasco which required UBS to merge with Swiss Bank Corporation to stay viable it was the management of the latter that wound up in control of the merged bank. They became very aggressive and wound up investing in sub-prime loans from the US.

    When the 2008 meltdown started UBS approached GIC who was more than willing to put in billions into UBS under the direction of then executive director Tony Tan, later the 35% President of Singapore. The rest is history.

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  • New Egg Yoke:

    Said it a billion times and a billion more to come. PAPsmear will and has BANKRUPT Stinkyland and will NEVER stop BLEEDING Sinkies as long as they are c.o.r.r.u.p.t.l.y in power.

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  • Yam kong:

    Retribution is real.

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  • C'est la vie:

    *****
    Singapore are just too good and darn too clever, for their own bloody good ……… but of course, the locally “guided” fools may be accustomed to this, but when financial analysts and your run of the mill, unguided/unperpetrated souls outside of the “containment” area that is Singapore, read or have a glimpse of this and similar financial articles/headlines …….. they will laugh, chuckle and choke with delirium …….. at the language.

    C’mon ……. US$7b loss “they” come out with, “combined strategy” sees positive return. Certainly a strategy for all proponents to be prepared to “bin” 7b to see a positive return; only if it plays out positively. What a totally irresponsible, reckless and foolhardy approach …….. for a sovereign fund, and all !!!

    “Disappointed” to lose 7b ……… get real !!! Your local Mr Tan would have been suicidal and half way up the 88th floor to perform a “swan” dive with grace.

    “Changes in lenders strategy and business” ……. another way of saying it’s going down the pan and I’d be a mug to be left holding the baby, a 7b ton baby !!!

    They should just quit using SGBS language and get real and “fess” up in that they “f” up and shut the door, for someone real whom can do the job, on their way out !!!
    **
    *****

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  • I was incredulous:

    how come outwitted by everyone: The investment game is a zero sum game. It means when those PAP dimwits lose $100b or $200b, it means someone else got away with $100b or $200b, or got off saving a loss of $100b or $200b.

    How come they were outwitted by everyone and in everything they dabble in? Didn’t they claim they are the most talented and pay themselves the highest salaries in the world?

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  • why is ST hiding the news?:

    This is such staggering news and will generate the most intense interest amongst the citizens and will be a major issue that concerns Singaporeans.

    Why is ST and the msm remaining mum on it and hiding the news?

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  • HYsr:

    In this poor economy, everything is going up fast and furious,

    You know you are covering up their massive black hole.

    4 room flat now $605,000.

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  • Female Vivian B K:

    We must not demand for Disclosure.
    Opacity is for the city.
    For the good of Yew and Mee.
    If we demand transparency, what about the O.H.P?
    FULL DISCLOSURE will Collapse the country.

    For the love of the country, we must never have Check and Balance.
    Our Auditors and Accountants understand this well.
    They are so well educated they top in maths .
    They know that transparency will bring the country down.

    Highest accounting standards and ethics demonstrated by sg accountants.

    Hire them for world class accounting.

    They base on trust and not P&L or Balance Sheet. No check and balance wan.

    P&L = Punt and Lost all.
    BS = Bull Shit

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  • ali baba:

    Goodbye cpf.

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  • Success by cronism:

    ali baba:
    Goodbye cpf.

    Agree.
    But ignorance is bkiss for sinkies.

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  • SgFAKEDemrcracy !!!:

    Instead of engaging in an open conversation on the massive losses, asking probing questions and conducting an inquiry into GIC’s management and seeking accountability, what were the 2 “MIND-BLOWING NEWS” that channel 8 highlighted tonight? Sex workers in massage parlours masquerading as above-board health center masseuse and the escalating price of MILK in the last 10 years. Mediacock sure have a great sense of humor.
    Dear fellow Sgporeans, if my memory proves me right, in the past 5, 6, 7 or even 8 years, we true blue Sgporeans have been reminding and exhorting our CluelessPapSHITGovt and authorities that the PRs they so blatanly give out have been taken advantage of by the sex workers in disguise. This class of low lifes bring ZERO value to our society. And to think that Mediacock actually ran a program tonight on fake health centers and sex workers. This is OLD news. This is YESTERYEAR’s news. And to insult our intelligence even more, they ran a concurrent program on Milk. To make the program look more inteligent, they Interviewed doctors, health care professionals, parents on their knowlege of milk. WTFF !

    CluelessPapSHITGovt works to distract public attention away from this extremely hot GIC UBS topic. This is the best strategy in not bringing attention to the hot button issue by diverting, distracting and changing the subject. The timing of the health centers sex workers and MILK (snigger snigger) shows coordinated control. PapSHIT wants to avoid engaging in controversial issues and moves the spotlight to MILK (sorry I couldn’t help it). By not bringing attention GIC UBS with sensitive political debates exposing the people responsible for losing OUR $$$ and highlighting others, the dumb public casually forgets over time. This works better than the citizens accusing them of sweeping it under carpet.

    Taking words out of their mouths, CluelessPAPShit may utter these famous words. Or rather infamous words :

    1.What to do? It’s happened. Let’s move on.
    2. We got the initial estimates……wrong
    3.Temasek and GIC are long-term investors, and should be evaluated as such.
    Pity Lim Hwee Hua has left the LeaderSHIT
    4.It is difficult to predict how these factors will play out in each market and what the outcome could have been…
    5. This is not a question of a witch-hunt as to who should be directly responsible
    6. Instead of naming the individuals and developing a blame culture..we need to encourage a learning culture

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  • flabbergasted:

    Why is Government Investment Corporation (GIC) suddenly changed to GIC Pte Ltd?

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  • Monyet Hitam:

    If my memory dun fail,, Tony Tan in GIC said the UBS investment is a good long term one. Now what happened?
    A big fat Liar, incompetent people dun know they are incompetent, and worse still, think they are smarter than others.
    TT is one damn good example.

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  • white dragon:

    More loses can be expected when the bubble of all hopes burst.

    I’m only worry about bank bail in.

    And, my cash are now safely kept in empty Milo tin at home.

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  • vgybhuijmk:

    VTO2020:
    in relation to this, we MUST support DR TAN CHENG BOCK in this case of EP of against our constitution. Else, another sweeping under the carpet of this huge loss.

    VTO PAP 2020.

    The people will be wake up till 2030 and beyond. Till many of them losing their jobs, health and house. Only then they will really wake up when they see void deck and everywhere 24/7 full of people and rising of rocket high crime rates.

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