Singapore Democrats

Temasek said in July that it was investing a further 3.4 billion US dollars into Merrill Lynch as part of the American investment bank's efforts to raise new capital.

Temasek is expected to receive the formal letter of approval this week, said the source, who declined to be identified.

The firm initially invested 4.9 billion US dollars in Merrill Lynch in December after the Wall Street titan sought fresh capital in the wake of huge losses following the meltdown in subprime, or higher risk, US mortgages.

Temasek has said it held an estimated 9.0 percent stake in Merrill Lynch at the end of March. The additional investment of 3.4 billion US dollars will raise that to between 13.0 percent and 14.0 percent, said the source.

The Singaporean firm is the largest shareholder in Merrill Lynch, which announced in July that it was dumping billions of dollars of mortgage debt at a steep loss and raising 8.5 billion US in new capital.

Temasek's December investment came with a requirement that if Merrill raised more capital within 12 months at a lower share price, Temasek would be compensated for the difference.

That proviso has kicked in, with Temasek putting the 2.5-billion-US-dollar compensation back into the bank along with another 900 million US dollars to make up the latest investment.

Temasek said Tuesday it had made a record profit of 18.2 billion Singapore dollars (12.8 billion US) in the year to March.

Temasek and the Government of Singapore Investment Corp. are the city-state's two main investment vehicles.

Sovereign wealth funds have emerged as big hitters in global finance, bailing out distressed international banks hurt by the recent financial turmoil.

Singapore's Senior Minister of State for Finance, Lim Hwee Hwa, said Wednesday that the city-state's investments had not escaped the impact of the turmoil but had been made on a long-term basis.

"This long-term orientation will keep us from selling in panic in a market downturn," Lim told parliament, adding the downturn also offered attractive investment opportunities.

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Agnes Chia  -  We deserve an unreserved apology    Sun, 31 Aug 2008 3:53 am The subprime situation was already anticipated by a good number of fund managers and fund houses since last November. I wonder what are Temasek's and GSIC's highly qualified highly paid FMs doing. Even lay people understand what "stop loss" is all about. They are over confident and too arrogant. They think they are too good to fumble and to lose so much money. As early as three quarters ago, the US housing market was facing great pressure and there was much dumping and we saw how it affected the interest rates among banks. Though this escalated from the US economy, it is no excuse for the Singapore Govermental investors to say that this is global and there is not much to be done to avoid. Before the collapse of the subprime mortgage market in the US, many Singapore private investors and fund managers have already started to take measures to cut losses and to stop losses. It is a shame that the much self exalted and self hailed PAP government is not able to do as well as their private counterparts with their investments. The latter is a greater mistake as these are not private funds. We deserve at least an unreserved apology from the the government. Quote 3   0

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