PDA

View Full Version : GIC defends UBS investment



land118
20-09-11, 21:25
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/stories/singaporebusinessnews/view/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

phantom_opera
20-09-11, 21:28
Same for C, BCS (Barclays) and BAC (ML last time) .. huge loss

Only ok investment is in Chinese Bank and SCB ... there goes our CPF :doh:

land118
20-09-11, 21:40
Same for C, BCS (Barclays) and BAC (ML last time) .. huge loss

Only ok investment is in Chinese Bank and SCB ... there goes our CPF :doh:
Wonder when Gov going to extend withdrawal age of cash balances of 55; with such losses, maybe sooner than later....:2cents:

"From 1 January 2013, members who reach 55 can withdraw their cash balances only after setting aside the CPF Minimum Sum and Medisave Minimum Sum. However, members can still withdraw the first $5,000 from the CPF account at age 55."

https://www.cpf.gov.sg/cpf_trans/ssl/financial_model/wdl_assumption.asp

maisonjai
20-09-11, 21:55
Now we have "steady hand". :rolleyes:

evergreen
20-09-11, 22:03
Wonder when Gov going to extend withdrawal age of cash balances of 55; with such losses, maybe sooner than later....:2cents:



At the rate they are losing our money, it's only a matter of time so as to avoid any "default" in payments to us.
Money in CPF, we can see but can't touch. The only chance of using it is to buy property.

land118
20-09-11, 22:06
Now we have "steady hand". :rolleyes:


http://www.businessweek.com/news/2011-01-30/gic-to-hold-citi-ubs-stakes-for-many-years-tan-says.html
GIC to Hold Citi, UBS Stakes for Many Years, Tan Says

http://www.asiaone.com/News/The+Straits+Times/Story/A1Story20071211-40492.html
GIC invests $14 billion in Swiss bank UBS

land118
20-09-11, 22:09
At the rate they are losing our money, it's only a matter of time so as to avoid any "default" in payments to us.
Money in CPF, we can see but can't touch. The only chance of using it is to buy property.
Generous interest rate of 2.5%in CPF even in very low interest rate environment...; Really very good to us like Santa Claus, better buy shares, properties than keep $ in CPF..:2cents:

maisonjai
20-09-11, 22:22
Santa Claus promised to leave a present for everyone but at the same time he sealed the socks, how to take out?? :confused: haha

evergreen
20-09-11, 22:43
Can only buy shares with a small % of the money.
Some more have to pay the bank management fee. All their policies help to create money for the bankers.

Even after realising capital gains in shares, we still can't take the money out. The bankers however get to take their share of the money.

phantom_opera
20-09-11, 22:45
This Santa Claus gives worse gift as time goes by .... last time said guaranteed 4%, now is 10y bond yield plus 1%, which as of today will be 2.59%, with inflation of 5 to 6%, we are eaten alive, might as well open up CPF SA for us to buy properties than throwing at UBS for rogue traders

land118
21-09-11, 00:35
This Santa Claus gives worse gift as time goes by .... last time said guaranteed 4%, now is 10y bond yield plus 1%, which as of today will be 2.59%, with inflation of 5 to 6%, we are eaten alive, might as well open up CPF SA for us to buy properties than throwing at UBS for rogue traders
Since CPF SA is for the purpose of retirement, I am with u that CPF shld allow Special Account to be used to buy properties...

land118
21-09-11, 10:51
wonder if our GIC will vote the CEO out?

http://www.channelnewsasia.com/stories/afp_world_business/view/1154347/1/.html

UBS chief to seek confidence vote after rogue trade
Posted: 20 September 2011 1907 hrs

ZURICH: Banking giant UBS is to hold a board meeting in Singapore on Wednesday when it will decide whether to maintain support for chief executive Oswald Gruebel after a rogue trading case, a Swiss press report said on Tuesday.

According to Swiss newspaper Tages Anzeiger, the board will make two key decisions: "first the strategy of the company, and secondly the person himself Gruebel."

Gruebel is seeking a confidence vote from the board to decide if he should stay on until early 2013 to lead the restructuring of the bank, said the newspaper.

When contacted, a UBS spokesman confirmed the meeting in Singapore, but said it had been planned long in advance. The spokesman would not comment on the other information in the report.

UBS alleged on September 15 that a rogue trader had lost the bank $2.0 billion (1.5 billion euros) in unauthorised trades, sparking questions about the adequacy of the firms internal controls as well as its strategy to maintain the investment bank.

That loss estimate was later revised upwards to $2.3 billion.

Pressure has mounted on Gruebel over the incident, with politicians in Switzerland calling for his resignation.

Gruebel has however told a Sunday newspaper that he was not planning to resign over the fraud, although he acknowledged that any executive changes were a decision of the board.

Tages Anzeiger noted that as the meeting is held in Singapore, the firm would be able to consult one of its biggest shareholders -- sovereign wealth fund Government Investment Corp.

GIC said in a statement that it had discussed the rogue trading case with UBS management.

"GIC expressed disappointment and concern at the lapses and urged UBS to take firm action to restore confidence in the bank," it said.

It affirmed however its confidence in the bank.

"GIC's view of UBS' fundamental strength as a well-capitalised bank with a strong private wealth management franchise remains unchanged," it said.

Meanwhile, Tages Anzeiger said that proposed plans for the bank's restructuring include cutting a third of risky assets, which currently stand at about 130 billion francs.

Swiss media are speculating that a possible successor for Gruebel could be Sergio Ermotti, who left Unicredit in April to join UBS as the head of its European business.

- AFP/cc

land118
21-09-11, 17:27
GIC holds 6.44% as No. 1 shareholder of UBS, ahead of Blackrock Inc @3.2%

no words from "steady hand" yet on this

evergreen
21-09-11, 19:36
After all the money spent on grooming top talent and buying foreign talent, GIC managed to lose SG's money yet again. :hell-hath-no-fury:
Money is better spent on welfare for health care subsidies for elderly Singaporeans who are the people who build up our economy and reserves.

maisonjai
21-09-11, 20:22
“How could I remain a spectator?”

Sounds familiar? Steady hand now holding key to National Treasure.:o

hyenergix
21-09-11, 21:22
Time to say goodbye to ur CPF if u r not using it to buy house. Understand CPF contribution amt has been increased. Keep until retirement or use to buy house, u still lose bcoz e money will eventually end up in govt's coffer. Mega mistakes after mega mistakes. Time to change e management.