GIC's paper loss on UBS


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zcf

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Apr 10, 2005
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#1
another loss :sweat:
I wonder what are the rate of bonus or increment of the people who making these decision?

http://www.straitstimes.com/BreakingNews/Singapore/Story/STIStory_489752.html
Feb 12, 2010

GIC's paper loss on UBS

It will convert $14.5b of notes to shares at price that would show loss

By Gabriel Chen


THE Government of Singapore Investment Corp (GIC) will convert its 11 billion Swiss francs (S$14.5 billion) worth of UBS notes at a price that may show a 70 per cent paper loss in its investment in the Swiss bank.
GIC will exchange the mandatory convertible notes that it bought two years ago for 230.7 million ordinary shares in UBS on March 5, according to a regulatory filing with the United States Securities and Exchange Commission.
This would mean the conversion price would be at 47.7 Swiss francs a share.
At Wednesday's closing price of 13.67 Swiss francs for UBS shares, these shares would be worth just 3.15 billion Swiss francs, or around 7.85 billion Swiss francs less than its original investment of 11 billion Swiss francs.
GIC declined to comment yesterday.
Under the original agreement, the minimum conversion price was 51.48 Swiss francs and the maximum 60.23 Swiss francs, but GIC had said there was a reset due to certain anti-dilution clauses.
 

iMac08

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#2
why am i not surprise??? they like to buy high sell higher....and what happen to long term view? now cut loss means long term view is bad? or are they playing the market like the layman would?
 

night86mare

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#4
They can't keep it till the price go up? Or they have to sell after 2 years?

HS
mandatory convertible notes
http://www.answers.com/topic/mandatory-convertible

A type of convertible bond that has a required conversion or redemption feature. Either on or before a contractual conversion date, the holder must convert the mandatory convertible into the underlying common stock.

These securities provide investors with higher yields to compensate holders for the mandatory conversion structure.
 

iMac08

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#5
more to come i believe....is so sad and insulting when we can afford to lose money like this. and only give 50k usd to Haiti for them to buy peanuts to eat
 

zcf

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#6
more to come i believe....is so sad and insulting when we can afford to lose money like this. and only give 50k usd to Haiti for them to buy peanuts to eat
Not surprising, with it's non-transparent system, we still don't know how many loss or bad investments are hidden :sweat:

Todays newspaper said:

just a month after GIC booked losses of as much as US$675 million ($952.4 million) from its exposure to Stuyvesant Town, one of New York’s biggest apartment complexes.
 

bengchiat

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more to come i believe....is so sad and insulting when we can afford to lose money like this. and only give 50k usd to Haiti for them to buy peanuts to eat
last i remember, peanuts cost $600,000.
 

scanner

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#15
GIC is managing funds in excess of US$100 billions.

http://www.gic.com.sg/aboutus.htm

Losing S$7.85 billions is nothing to them.

On the other hand, GIC made money from sale of Citigroup shares.

http://money.cnn.com/2009/09/22/new..._stake.reut/?section=money_news_international

So by earning USD$1.6B and lost S$7.85 B, its a good deal?:think:
One day they said its for long term investment and then they sold it off within 1 year.... I am confused.... :what:

Remember, increasing GST to 7% is to create a safety net for the poor... :bsmilie:
 

idor

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#16
So by earning USD$1.6B and lost S$7.85 B, its a good deal?:think:
One day they said its for long term investment and then they sold it off within 1 year.... I am confused.... :what:

Remember, increasing GST to 7% is to create a safety net for the poor... :bsmilie:
Yo scanner... long time no see... :bsmilie:

I wonder when will GIC stop having paper loss and have real loss instead? :think:
 

Yoh

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Dec 11, 2004
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#17
So by earning USD$1.6B and lost S$7.85 B, its a good deal?:think:
One day they said its for long term investment and then they sold it off within 1 year.... I am confused.... :what:

Remember, increasing GST to 7% is to create a safety net for the poor... :bsmilie:
:bsmilie: I wonder how many actually still remember what was mentioned when GIC made the decision to invest in UBS. Ain't the 1 year investment far off from their "long term investment" duration as per mentioned?

:bsmilie: Ouch, many good years ahead with such decisions.
 

obfuscate

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#18
What's the use of criticising if can only make useless comments on hindsight? :sticktong
 

eyes

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#19
“Criticism may not be agreeable, but it is necessary. It fulfils the same function as pain in the human body. It calls attention to an unhealthy state of things.” - Winston Churchill

:)
 

hongsien

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#20
“Criticism may not be agreeable, but it is necessary. It fulfils the same function as pain in the human body. It calls attention to an unhealthy state of things.” - Winston Churchill

:)
Asians in general don't like to be criticized.........
 

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