Not Again.

When was the last time we heard any positive from Temasek?


From The Times
August 27, 2007
Temasek loses £150m on its July investment in Barclays
Nick Hasell

Temasek, the Singapore investment vehicle that has emerged as a possible buyer of Nasdaq’s stake in the London Stock Exchange (LSE), has lost £150 million on its investment in Barclays in the space of a month.

The state-backed fund took a 2.1 per cent interest in the bank in late July as part of an equity refinancing to support Barclays’s €68 billion (£46 billion) bid for ABN Amro, the Dutch bank.

However, amid the turmoil in the world’s financial markets, shares in Barclays have fallen by 15 per cent from the price that Temasek agreed to pay, cutting the value of its holding from £970 million to £820 million.

Barclays closed at 611p last week, coming under fresh pressure on Friday after the resignation of Edward Cahill, who had run the bank’s collateralised debt obligations division.

Temasek paid 720p a share, with a commitment to invest a further £1.5 billion at 740p a share should the proposed merger with ABN Amro proceed. China Development Bank invested at the same time on the same terms and is sitting on a £220 million loss on its £1.5 billion stake.

It emerged this weekend that Temasek had expressed interest in the 30 per cent holding in the LSE being put up for sale by Nasdaq, potentially marking its first foray into Britain’s financial services sector beyond banks. Aside from Barclays, it has built a 15 per cent interest in Standard Chartered, the emerging markets bank.

However, Nasdaq, which has appointed UBS to handle the auction, has said previously that it would not sell its LSE stake to a single bidder. Under UK listing rules, ownership of a 30 per cent stake would automatically trigger a bid for the entire company.

The Nasdaq holding is expected to draw wide interest, with the New York Stock Exchange, now merged with Euronext Liffe, and Borse Dubai expected to enter the fray. The governments of Dubai and Singapore regularly compete for the same assets, most publicly last year in the struggle to buy P&O, the ports operator, which eventually was won by Dubai Ports World. Deutsche B�rse, which launched a bid for the LSE three years ago at £1.3 billion, is also seen as a contender.

This month Temasek reported the value of its portfolio as $108 billion. Since 2002 it has stepped up its plans to diversify its spread of assets, with a target of allocating one third of its portfolio to Singapore, a third to the rest of Asia and the remainder to developed countries. At present 78 per cent of its assets are within Asia, including Singapore.

For the 12 months to March 31, Temasek reported a total shareholder return of 27 per cent. Aside from this month’s setback on its Barclays stake, it has run into difficulties closer to home. Last year its $3.8 billion investment in Shin Corporation, of Thailand, the telecoms operator once owned by Thaksin Shinawatra, the country’s former prime minister and now the owner of Manchester City Football Club, lost about one third of its value.

Temasek could not be reached for comment.