S&P Rating of Temasek

[Porker]

Singapore’s Temasek Holdings Pte has told Standard & Poor’s in 29 pages why it shouldn’t mess with the state-owned investor’s AAA rating.

Temasek, which managed S$223 billion ($165 billion) of assets as of last March, said the rating firm’s proposed new rules for grading investment holding companies lump Singapore with riskier nations such as Greece and Jamaica, according to a Feb. 2 response to the changes. S&P’s new criteria take into account the firms’ lack of direct ownership of assets, the challenges they face when selling in illiquid markets and volatility of assets they hold.

Part of S&P’s proposal groups Singapore, which has had a AAA rating for 20 years, alongside Greece, a nation that may run out of cash this month. While Temasek would probably still enjoy the government’s top-grade overall rating, a weaker risk profile would be unwelcome at the company which has been considering offering bonds to individuals in Singapore.

“A triple-A credit rating is a rare thing in today’s markets, and there is a prestige element to it,” Veljko Fotak, assistant professor of finance and managerial economics at the University at Buffalo, New York, said in a Feb. 5 e-mail. “Any chink in that armor, even if only in the stand-alone, rather than overall, rating, could have image consequences.”

Temasek dollar bonds due in 2019 yielded 39 basis points more than U.S. Treasuries yesterday and its credit-default swaps were at 38.7, compared with 35.5 for Australia.

Four Baskets

S&P published in November proposed new criteria for assessing credit risk at IHCs, defined as firms holding equity stakes across at least three sectors. The ratings company asked for feedback from affected parties by Jan. 30.

The new framework grades IHCs’ asset liquidity by splitting their main countries of operation into four baskets, based on a 30-year history of those nations’ share market swings, according to Temasek. Singapore falls into the third basket with markets including Hong Kong, Saudi Arabia and Cyprus. The measure should instead “be assessed based on the number of days needed to divest assets” on those exchanges, said Temasek.

“With its statement, Temasek is indirectly defending the standing of Singapore as a financial center,” Sven Behrendt, managing director at Geneva-based GeoEconomica, which researches sovereign wealth funds, said in a Feb. 4 phone interview. “It’s understandable to me that Temasek doesn’t want the country to be put in the same category as Greece, Jamaica and Trinidad and Tobago.”

Asia, America

Temasek had 31 percent of its assets in Singapore as of March 31, according to its last annual report published in July. Investments in the rest of Asia stood at 41 percent and those in North America, Europe, Australia and New Zealand at 24 percent. About 70 percent of its assets were listed.

The firm’s biggest holdings include a 52 percent stake in Singapore Telecommunications Ltd., valued at $25 billion, data compiled by Bloomberg show. It owns a 6 percent stake in China Construction Bank Corp., worth $11.6 billion, and 29 percent of DBS Group Holdings Ltd., valued at $10.4 billion.

“S&P regularly requests comments from market participants on proposed changes to its methodologies and assumptions,” Bertrand Jabouley, the Singapore-based S&P analyst who follows Temasek, said in a Feb. 5 e-mail. “The objective of this proposed criteria is to help the market better understand key risk drivers for investment holding companies, enhance global comparability of our ratings and improve transparency.”

Stephen Forshaw, a spokesman for Temasek, declined to comment beyond the company’s statement when contacted by e-mail.

Riskier Basket

Under the criteria, S&P also assumes that firms such as Temasek operate in a “moderately high risk” industry. That puts IHCs in a basket riskier than pharmaceutical and oil and gas companies, said Temasek. S&P has downgraded 18 energy firms this year in North America as lower oil prices curb their cash flows and ability to pay debt, data compiled by Bloomberg show.

The proposed industry classification could see a capping of IHCs’ so-called anchor ratings, which help determine stand-alone scores, at levels that don’t reflect the individual firms’ ability to pay debt, according to Temasek.

“In our view, classifying IHCs as a uniform, homogeneous industry is not meaningful,” Temasek said in the statement. “A company should be assessed objectively, based on its individual credit quality, without being constrained by any cap.”

S&P assigns an “extremely high likelihood of extraordinary government support” to Temasek, which means the investment firm’s corporate score would reflect Singapore’s AAA rating even if its stand-alone grade dropped.

Surprise Easing

The city’s economy grew an annualized 1.6 percent in the three months to Dec. 31 from the previous quarter, less than analysts estimated, after its manufacturing industry weakened with slowing growth in China. The country unexpectedly eased monetary policy last month, allowing the Singapore dollar to drop 1.7 percent versus the greenback this year.

Temasek said in January 2014 it was looking at ways to offer bonds to individual investors in Singapore. Issuing fixed-income products will provide an “alternative investment opportunity” for investors seeking stable returns with lower risks, the company said in a statement that month.

S&P’s proposed new criteria for IHCs “is part of a bigger focus on how to evaluate liquidity risk as it has been deteriorating across the world,” Jean-Charles Sambor, Singapore-based Asia Pacific director of the Institute of International Finance, said by phone Feb. 4.

“It’s healthy that rating companies and firms such as Temasek are having a public discussion about these issues.”

To contact the reporters on this story: Christopher Langner in Singapore at[email protected]; Klaus Wille in Singapore at [email protected]

[Karoon]

Nobody likes to be lumped together with an entity seemingly headed for disaster, as such I expect loud, strong protests from the Greeks.

[Kezg1]

As the above...and this is only one Spanish oil giant Repsol....already lost 10.83 billion euro

sighhhhhh...

 

 

SINGAPORE (Feb 26): Temasek Holdings has suffered paper losses on its investment in the energy and banking sectors, the Straits Times reported on Friday.

Temasek’s energy and bank holdings, including in Standard Chartered Bank, MEG Energy Corp and Repsol, make up 5% of its portfolio, the report says.

Standard Chartered Bank reported its first ever loss since 1989 on Wednesday. Temasek reported last year it had an 18% stake in the bank whose market value has shrunk by 51% since March 31.

Temasek has a stake of about 5% in Canadian oils sands company MEG Energy whose market capitalisation has shrunk by 79% over the same period.

Spanish oil major Repsol, in which Temasek has about 7%, saw its market capitalization fall to 13 billion euro from 23.83 billion euro on March 31.

The report quoted CIMB Private Bank economist Song Seng Wun as saying that Temasek’s paper losses are hardly surprising given the market conditions.

Even Norway’s sovereign wealth fund suffered its biggest quarterly loss in four years in the third quarter of 2015, he says.

The paper losses “serve more as a reminder of the importance of managing the portfolio well for the longer run”, says Song.

Temasek says it has no further comments to add to the report.

[Vid]

Relac lah.... 10.83bn euro only. That's like you spent $0.50 to buy a packet of tissue paper. One sneeze and the money will get back already.  

[Kusje]

10 bil fall in market cap but Temasick only owns 7% so our loss is only 700m.

 

Easily covered with this year's CPF increase

[Mockngbrd]

Overall still earn can le

[Jman888]

10 bil fall in market cap but Temasick only owns 7% so our loss is only 700m.

 

Easily covered with this year's CPF increase

not enough to give ah jib

[Wt_know]

when oil was USD80-100, made how many billions already?

Edited February 26, 2016 by Wt_know

[Kb27]

No big deal, just increase cpf min sum.

[Showster]

Total paper losses from all three companies are estimated at around 3.6 Billion.

 

But must also report paper gains to be fair.

 

 

 

As the above...and this is only one Spanish oil giant Repsol....already lost 10.83 billion euro

sighhhhhh...

 

 

SINGAPORE (Feb 26): Temasek Holdings has suffered paper losses on its investment in the energy and banking sectors, the Straits Times reported on Friday.

Temasek’s energy and bank holdings, including in Standard Chartered Bank, MEG Energy Corp and Repsol, make up 5% of its portfolio, the report says.

Standard Chartered Bank reported its first ever loss since 1989 on Wednesday. Temasek reported last year it had an 18% stake in the bank whose market value has shrunk by 51% since March 31.

Temasek has a stake of about 5% in Canadian oils sands company MEG Energy whose market capitalisation has shrunk by 79% over the same period.

Spanish oil major Repsol, in which Temasek has about 7%, saw its market capitalization fall to 13 billion euro from 23.83 billion euro on March 31.

The report quoted CIMB Private Bank economist Song Seng Wun as saying that Temasek’s paper losses are hardly surprising given the market conditions.

Even Norway’s sovereign wealth fund suffered its biggest quarterly loss in four years in the third quarter of 2015, he says.

The paper losses “serve more as a reminder of the importance of managing the portfolio well for the longer run”, says Song.

Temasek says it has no further comments to add to the report.

 

 

[Wyfitms]

these are just paper losses

 

which will be "covered" once gps erp is implemented

 

[Galantspeedz]

the ang mos are always attacking us

 

what was their rating on lehmans before they went bust.. from wiki

 

With the US downgrade some have accused S&P of causing further damage for its own agenda. S&P acknowledged making a US$2 trillion error in its justification for downgrading the US credit rating,^[27] but stated that it "had no impact on the rating decision".^[28] "A judgment flawed by a $2 trillion error speaks for itself,"^[29] said a spokesman for the United States Department of the Treasury. Jonathan Portes, director of NIESR, Britain's longest established independent economic research institute, has observed that "S&P's record . . . is remarkable. The agency downgraded Japan's credit rating in 2002, since when it has had the lowest long-term interest rates in recorded economic history. That did not, however, stop S&P rating numerous sub-prime mortgage-backed securities as AAA, or maintaining its rating on Lehman Brothers until the bitter end."^[30]

Edited February 26, 2016 by Galantspeedz

[Ktglfc]

 

As the above...and this is only one Spanish oil giant Repsol....already lost 10.83 billion euro

sighhhhhh...

 

 

SINGAPORE (Feb 26): Temasek Holdings has suffered paper losses on its investment in the energy and banking sectors, the Straits Times reported on Friday.

Temasek’s energy and bank holdings, including in Standard Chartered Bank, MEG Energy Corp and Repsol, make up 5% of its portfolio, the report says.

Standard Chartered Bank reported its first ever loss since 1989 on Wednesday. Temasek reported last year it had an 18% stake in the bank whose market value has shrunk by 51% since March 31.

Temasek has a stake of about 5% in Canadian oils sands company MEG Energy whose market capitalisation has shrunk by 79% over the same period.

Spanish oil major Repsol, in which Temasek has about 7%, saw its market capitalization fall to 13 billion euro from 23.83 billion euro on March 31.

The report quoted CIMB Private Bank economist Song Seng Wun as saying that Temasek’s paper losses are hardly surprising given the market conditions.

Even Norway’s sovereign wealth fund suffered its biggest quarterly loss in four years in the third quarter of 2015, he says.

The paper losses “serve more as a reminder of the importance of managing the portfolio well for the longer run”, says Song.

Temasek says it has no further comments to add to the report.

 

 

As long as don't touch our CPFs monies, I am still ok ...

But hor, they will probably recoup back thru other means lah ....

[Wyfitms]

As long as don't touch our CPFs monies, I am still ok ...

But hor, they will probably recoup back thru other means lah ....

 

how would you know if they have not molested your CPF money

 

after all it is just a figure on your statement 

[Porker]

how would you know if they have not molested your CPF money

 

after all it is just a figure on your statement

Horny fella

 

 

[Kezg1]

As long as don't touch our CPFs monies, I am still ok ...

But hor, they will probably recoup back thru other means lah ....

 

...I not too sure about it....but why keep upping the withdrawal date....sighhhh..

[Wyfitms]

...I not too sure about it....but why keep upping the withdrawal date....sighhhh..

Don't argue too much

Or think too much

It is for your own good

Thankfully the govt can plan for us

To have $600 each mth and live comfortably in retirement

[Donut]

Don't worship S&P and their BS ratings too much