The Great Singapore Sale is coming early this year as Singapore’s Temasek is expected to sell, sell, and sell in the coming days. That’s what you get when you make bad investments in the tune of around $1.2 billion. Bye, bye $1.2 billion of our money.
Temasek’s investments in the ailing Merrill Lynch is making life hard for the fund as the investment has caused Temasek to suffer part of the $1.2 billion loss. Already, it had to sell off an Indonesian bank to offset its exposure and more sales are expected. Merrill shares have fallen 11 percent since Temasek invested $4.4 billion in the firm and chances are its’ shares will continue to fall. A good way to see this is Temasek’s decision NOT to exercise its option to buy another $600 million worth of Merrill shares last month after the Wall Street bank's shares fell below the option price of $48. This clearly means that Temasek believe the price will come down some more.
Reports now say that Temasek will have to sell one of their banks in China to offset any potential problems they may face in the future as the sub-prime problems in America are still ongoing. Add this to GIC (Government of Singapore Investment Corp) bad investment (of $10 billion) in Swiss bank UBS; this look like a bad, bad year for Singapore.
I’m afraid its’ a little too late to ask questions on why we were so eager to invest in the West when the US are on the verge of a recession, and it’s a little useless to ask as well. After all, it’s not as if anyone is going to bother answering question from ordinary Singaporeans why they are wasting our public money.
Bye, bye $1.2 billion. You could have done so much good. Get ready guys to part with our CPF money to pay for Temasek's and GIC's mistakes.