Painful paper loses, "it made an estimated paper loss of about six to seven billion Swiss francs at today's price"
http://www.channelnewsasia.com/stori...1154179/1/.htm
GIC defends UBS investment
By Ryan Huang | Posted: 19 September 2011 2214 hrs
SINGAPORE: The Government of Singapore Investment Corporation (GIC) has defended its investment in Swiss bank UBS.
This was in response to a forum letter in TODAY newspaper, which called for GIC to be more transparent with its losses.
The letter came after a US$2.3 billion loss was made by a rogue trader at UBS.
GIC is the largest shareholder of UBS with a stake of more than six per cent.
In a letter to the media, GIC said its investment in UBS was made before the onset of the global financial crisis of 2008.
It reiterated that in retrospect, the timing for the investment could have been better.
GIC also pointed out that during the same period, it had made good investment decisions and these have offset the losses on UBS.
GIC said its total portfolio has fully recovered to its value prior to the global financial crisis.
The firm added that it does not disclose strategies or details of specific investments to preserve its competitive edge.
It reiterated that its investment objective, as set out by the government, is to achieve good long-term returns over a 20-year investment horizon.
GIC said its performance is assessed based on "our overall portfolio and not on individual investments".
As of 31 March 2011, the firm's 20-year annualised real rate of return, in excess of global inflation, was 3.9 per cent.
GIC also pointed out that more information is available in its annual report, which is posted on its website.
It had bought into the bank's ordinary shares at a conversion price of 47.7 Swiss francs or $67.60 per share.
The shares closed at around 20 per cent of that value the day the loss was announced.
This means that since its original investment of around 11 billion Swiss francs in 2008, it made an estimated paper loss of about six to seven billion Swiss francs at today's price.
-CNA/wk