KOPITIAM TALK: TEMASEK HAS NO EXIT STRATEGY FOR ROTTEN INVESTMENTS?

Ah Kow: Wa lau eh. Singapore SWFs damn sia sway. Can anyhow claim make a lot of money but no need to show any proof.

Ahmad: GIC is worse then Temasek because it no need to show even one single investment using our CPF. PAP create law say no need to show how money invested then Singaporeans bodoh bodoh repeat like parrot “law say no need to show investment”. Ha ha.

Ah Kow: Bro, why you laughing? Scholars lose money also our money, OK. You also bodoh or what. But compare the 2, at least Temasek got state all the big investment so when we see the big companies share price drop like stone we know how much they lose. .

Arumugam: Kow is right. Today I want to show you how Temasek has planned to fail because it has failed to plan. Don’t anyhow believe these scholars can manage a fund because they did extremely well in the classroom. Real world and classroom conditions are not the same, OK. (Turning on his laptop) Look at this share and tell me what you think.

Image – FT.com

2010 – invested US$47.8 mil (link)
2011 3Q filing – Temasek held 2.7 million shares/6.2% shareholding (link)
2013 Aug – to invest up to US$60 million in convertible notes (link)
2015 June – Amyris agrees to exchang convertible debt for shares at $2.30 per share (link)
2015 3Q filing – stake increases to 42.2 million shares (link)
2015 Dec 11 – stake increases to 69.59 million shares (link)

Ah Kow: Thamby, this not possible leh. Temasek where got keep rotten investment so long? Sure got plan to cut loss. Basic investment 102 got teach must have cut loss and plan for emergency exit.

Ahmad: Their trading terbalik because scholars think real world and classroom same same. My kaki trade local shares also know something call cut loss. Trading must have exit plan – cinemas and buildings also got emergency exit in case fire. IPO $16, now collapse 90%, how come starting hold 6% but now increase to 36%? Temasek think this is Great Singapore Sale or what. Tomorrow I go ask my kaki.

Arumugam: The problem is Temasek does not have any exit strategy and its long-term view mostly koyak. For example, Standard Chartered they also got no exit plan but just know how to invest like money fall from the sky. They never expect to inject money into bank or share price to collapse. Like PAP, they also want face.

Now with 36% stake in Amyris, must continue to hold forever until company really bust. If not lose US$100 million never mind but lose face cannot.

If it wants to sell a company that has made only losses, there’s no buyer for such a large stake. If got, then they want to buy from Temasek at lagi lelong price. Lose-lose situation can’t do anything except pray. 

Ah Kow: I remember some wise man say never mind can keep for long-term like 20 or 30 years.

Ahmad: Other small players can just cut loss but I think Temasek mati leow. Every time Amyris cry for more and more money, Temasek got no choice but top up like MRT commuters top up MRT card. Die die also must travel by MRT right?

Ah Kow: Singaporeans more stupid than me because I understand government no choice but to donate more taxpayer money to this type of company. Then PAP cut down on social spending or make some noise in pariahment say government cannot anyhow spend on citizens. Die la, like that.

Arumugam: Temasek says its 10-year return is 9% but it has so many lousy investments I really find this hard to believe without disclosing all investments. Most Singaporeans have become blur like sotong after all the nonsense reported in Temasek annual report, such as … the organisation weight profile.

Ahmad: Bro, you sure or not. Which fund manager so goondu report this kind of thing?

Ah Kow: If want to act clever, they might as well report which employee the grandmother born twins at 80 years old. Ha ha.

Arumugam: OK, look at this chart.

temasek20weight20profile2.jpg

(Ahmad and Ah Kow laughed non stop for the next 10 minutes)

Arumugam: OK, we don’t have much time for today but we already know Temasek has many foreign investments deep deep underwater without oxygen. Like our DPM asked, what do you think?

Ahmad: My friend small time local stock market punter tell me if investment sala just close one eye, bite the apa itu, cut loss and try to make money from other investment. Don’t average on lousy position.

Ah Kow: I also hear this before something like golden ruler of trading right, Aru? But how come Temasek still buy when the stock become almost no value? This not ordinary penny stock but super penny stock like pock kai stock already.

Arumugam: You are both right. Temasek has painted itself into a corner. They never planned for such a scenario and cannot cut loss because their stake too big. If they start to cut loss, then stock will collapse. Even the news of their intention to cut loss will trigger smaller investors to exit at the same time.

Ah Kow: Hmm … now I understand why other good fund manager advise not to take very big position in one company. But too late for Temasek right? I mean for Singaporeans

Arumugam: Yes, it’s too late. But worse is Temasek never seems to learn any lesson from past mistakes at all. If it cut now, losses will be more than US$100 million. But if it cut later, even more money will be needed for this loss-making company. Why is Temasek 100% sure and keep injecting more money into Amyris? OK, I know you both must go back to work. We’ll catch up next week.

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