Temasek sells Barclays stake at $1 bln loss

June 4, 2009
Singapore Democrats

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AFP

Singapore investment firm Temasek Holdings has sold its stake in Barclays bank at a loss of 500-600 million pounds (815.38-978.45 million US), a report said Thursday.

Unnamed officials were quoted by the Straits Times as saying that Temasek had disposed of the shares, estimated at two percent, between December and January. However, the state-linked firm declined to comment.

“It is inappropriate for us to comment on unsourced reports,” a Temasek spokesman said in a statement to AFP.

The reported sale followed a statement Tuesday by an Abu Dhabi state-owned firm that it sold a chunk of its holding in the British lender for a sizeable profit.

International Petroleum Investment Company (IPIC) sold its shares for a total of 3.5 billion pounds, according to Credit Suisse Securities, handing it a gain of 1.5 billion pounds in just seven months.

IPIC had in a statement said it was selling 1.3 billion shares or 13.5 percent of Barclays. The sale leaves IPIC with 5.0 percent of the bank’s stock.

Temasek sold its stake in the bank at a time many thought it would be brought under British government control as the credit crisis bit and its share price fell. However, Barclays has since recovered.

Temasek and the Government of Singapore Investment Corp, the city-state’s other state investment vehicle, poured billions into Western banks but have seen their holdings’ value dive as they were hit by the global economic crisis.

Last month, Temasek announced it had sold its stake in Bank of America without giving any details, although industry analysts calculated it lost about 4.6 billion US dollars in the transaction.

Temasek’s chief executive Ho Ching said last month that it would reduce its exposure to Western nations and increase its focus in Asia and other emerging markets such as Latin America and Russia.

“As Asia continues to develop, it continues to de-risk. We are increasingly more confident on Asia’s future,” Ho said.

Finance minister Tharman Shanmugaratnam defended Temasek’s track record, saying it made a net gain of 39 billion US dollars over five years from 2003.

He also said Temasek as an investor should not be based on any individual transaction but on how it performed over the years.

“Temasek is a long-term investor… but being a long-term investor does not mean being locked into every individual investment, regardless of major changes in the environment or a new investment proposition,” he told parliament recently.

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