SPH deal aims to improve asset values, ease shareholder pressure off media unit

Finally; COVID-19 has pushed GLC companies like SPH, CPL, SCI, Keppel etc to improve shareholder value by cutting rotting parts!

Banks Cut Dividends And Front Loaded Q2 For More Provisions

 

Defensive stance helps GIC post 20-year annualised real rate of return of 2.7%

Read? Defensive stance helps GIC post 20-year annualised real rate of return of 2.7%


DESPITE the turbulence unleashed by the Covid-19 pandemic, GIC's portfolio remains resilient and Singapore's foreign reserves under its charge have been protected by the sovereign wealth fund's defensive stance and focus on its mandate, which is to first preserve and then enhance the value of the assets under its care.

Over a 20-year period spanning April 2000 to March 2020, GIC's portfolio achieved an annualised nominal rate of return of 4.6 per cent. Taking into account global inflation, its annualised real rate of return stood at 2.7 per cent over the same period, compared to 3.4 per cent for the 20-year period spanning April 1999 to March 2019. (see amendment note)

GIC is one of the three reserves management entities in Singapore, alongside the Monetary Authority of Singapore (MAS) and Temasek Holdings. The three supplement the annual Budget through the Net Investment Returns Contribution (NIRC), the single largest revenue source for the Singapore government.

Temasek's first public bond offer more than 8 times subscribed

Read? Temasek's first public bond offer more than 8 times subscribed

SINGAPORE: Temasek Holdings' first public bond offer for retail investors was more than eight times subscribed, said the Singapore state investment firm on Tuesday (Oct 23) after the close of the offer. 

Valid applications of around S$1.68 billion were received for S$200 million worth of bonds offered to the public, said Temasek.


CW : Hmm ... lots of cash not going to the stock market to invest?

So many retail investors/savers prefer Return of Capital than Return on Capital.

Warren Buffett's bet on airlines lost more than $700 million in sector selloff

Airline stocks plunged following the announcement of an aggressive expansion plan by United.
Warren Buffett's Berkshire Hathaway is among the largest shareholders in the four biggest U.S. airlines.

United fell more than 11 percent.

A bet on airline stocks by Warren Buffett's Berkshire Hathaway lost more than $700 million in value in a sector-wide rout, fueled by worries of an upcoming fare war between carriers.

The value of the Berkshire's stakes in United, Delta, Southwest and American was worth more than $11 billion as of Tuesday's close, but fell by about $727 million in Wednesday's sharp selloff, based on Berkshire's latest disclosure of its holdings in November.

Berkshire was not immediately available for comment.

The sharp decline in the airline sector started after United Airlines executives outlined an aggressive expansion plan that outpaced economic growth and that of some competitors. The plan aimed to gain the confidence of investors that the airline could expand its profit margin and increase revenue, but instead stoked fears of low fares and higher costs.

United shares fell more than 11 percent on Wednesday, while American lost 6 percent and Southwest and Delta each shed around 5 percent.

In late 2016, Berkshire revealed a surprise bet on the sector, which Buffett had previously shunned. Years of post-bankruptcy consolidation among carriers and a decline in fuel prices has helped airlines rake in record profits in recent years.

The Berkshire CEO told CNBC in February that airlines "had a bad first century." They're kind of like the Chicago Cubs," he said. "And they got that century out of the way, I hope."

Now airlines are facing more competition from low-cost rivals as well as rising fuel prices, but strong economic growth and strong business travel demand is expected to be a tailwind for the sector.

Investors will next focus on American Airlines and several of its competitors, including JetBlue and Southwest, which are scheduled to report their quarterly profits on Thursday morning.

Hedge fund manager some call the next Warren Buffett owns nearly $1 billion of Puerto Rico's bonds

Seth Klarman, the value investing giant who draws comparisons to Warren Buffett, has a very large position in Puerto Rico's controversial debt.

Klarman's hedge fund, Baupost, owns $911 million of the island's bonds through Decagon Holdings entities, according to a July public court filing.

"The Baupost Group is a holder of COFINA bonds through the Decagon entities. Baupost regularly makes investments through subsidiary holding entities," Baupost spokeswoman Diana DeSocio wrote in an email.

COFINA stands for the Puerto Rico Sales Tax Financing Corp. that issues bonds.


....

Baupost has $30 billion of assets under management as of March 2017, according to the firm.

Klarman's fund has generated annual returns of 16.4 percent and $22.6 billion in net profit for clients since inception through 2015, according to a Morgan Creek Capital letter. Baupost's main fund posted a 'high single-digit' return last year.

The hedge fund manager has largely avoided controversy over his career and is often compared with Buffett for his disciplined investing philosophy and solid returns. As the political rhetoric heats up around what Wall Street is owed as Puerto Rico tries to recover from this tragedy, a negative spotlight could fall on owners of the controversial debt like Baupost.


That is likely something Klarman would not welcome since he is notoriously reclusive. He rarely appears publicly and used copies of his "Margin of Safety" investment book still sell for more than $700 online

Read? Hedge fund manager some call the next Warren Buffett owns nearly $1 billion of Puerto Rico's bonds

Klarman started with the three key underlying pillars of his investing approach:

1. Analyze the potential for loss before gain: "You want to focus on risk before you focus on returns. … A lot of it is focusing on multiple scenarios, what can go wrong? How much can you lose?"

2. Absolute over relative returns: "The world is oriented to relative performance. Everybody is an asset gatherer. ... By contrast we think wealthy individuals and established institutions because of their risk aversion are interested in absolute returns. If you're focused on absolute returns the idea of losing people's money becomes fairly abhorrent. … Your goal is not to lose less, your goal is to try to make money all the time, protect capital on the downside and still do well enough on the upside."


3. Forget macro investing, instead focus on individual investment ideas: "Most of the investment world has a top down orientation. They think about how is the economy going to do? And how are foreign currencies going to do? How are interest rates going to do?

 … My view is that is incredibly difficult to do. I don't know anybody with a really good long-term demonstrated record of success of macro forecasting."

Are Dividends Good?

Sometime, while reading newspapers article relating to investing stories; we may wonder whether it is just theoretical assumption of investors or in real life there is one such retail investor?

The newspaper mentioned about Keppel investors on their past dividends they have received. They should have little to complain.

Uncle8888 has no complaint!

More needs to be done to provide Singaporeans with investor education: Lawrence Wong

Speaking at the annual Securities Investors Association (Singapore) Investors Choice Awards on Friday evening, the Minister for Culture, Community and Youth said this is so that they better appreciate the risks and potential rewards.

 

SINGAPORE: Much more needs to be done in terms of providing Singaporeans with basic investor education so that they better appreciate the risks and potential rewards, said Minister for Culture, Community and Youth Lawrence Wong.

Mr Wong was speaking at the annual Securities Investors Association (Singapore) Investors Choice Awards on Friday (Oct 31) evening.

He said:

For every Warren Buffett, there are many one-hit wonders in the investment world. 

It is easy to get swayed by promises of quick returns on investment, especially in today's low-yield environment. 

But in the financial markets, there is no such thing as a free lunch."

 

Several companies were awarded for good corporate governance at the event, including DBS Group, Keppel Telecommunications & Transportation and Nera Telecommunications.

Financial journalists and retail brokers were also recognised for their contributions to the investing community.

- CNA/ac

 

Winning bidder for Buffett lunch from Singapore

OMAHA, Neb. (AP) -- A man from Singapore on Friday bid $2,166,766 to win a private lunch with Warren Buffett, well below the record price but on par with other winning bids in recent years. 

It was the 15th annual online auction. The winner gets to spend several hours at lunch with Buffett, who leads Berkshire Hathaway and is known for his investing prowess and philanthropy. 

The auction benefits the Glide Foundation, which provides meals, health care, job training, rehabilitation and housing support to the poor and homeless in San Francisco. 

Glide spokeswoman Denis Lamott announced that Andy Chua from Singapore had the winning bid but said he was not interested in interviews right now. 

Last year's winning bid was a little more than $1 million. Four of the previous five winners each paid more than $2 million, and the 2012 winning bid of $3,456,789 remains the most expensive charity item ever sold on eBay. 

Buffett said he doesn't think the auction would have drawn such astronomical prices if it had benefited a lesser charity. The nonprofit relies on the auction for part of its $18 million budget. 

"Nobody spends the money better than Glide," Buffett said.
Glide has a remarkable record over more than five decades of helping people rediscover hope, Buffett said. Since 2000 the investor has raised nearly $16 million for the charity through these auctions. 

Past auction winners have praised Glide but made it clear that Buffett was the main reason they spent the money. 

Guy Spier, an investor who paid $650,100 to dine with Buffett in 2007, has written a book due out this year that explains how that meal refined his approach to investing. 

Nearly 40,000 people attended Berkshire Hathaway's annual meeting in Omaha last month to hear Buffett answer questions.

The winners of the lunch auction usually dine at Smith & Wollensky steakhouse in New York City, which donates at least $10,000 to Glide each year to host the lunch. 

Buffett's company owns more than 80 subsidiaries including insurance, furniture, clothing, jewelry and candy companies, restaurants and natural gas and corporate jet firms, and has major investments in companies including Coca-Cola Co., IBM and Wells Fargo & Co. 

Paulson Fund Losses Prompt Some Investors to Pull Out

Createwealth8888: The truth in investing/trading, even the world's best may also fail badly one day.



Last January, when investors in one of Paulson & Co.'s best-known hedge funds saw the value of their investments had been slashed in half, some wondered how much worse it could get.

Hedge fund manager John Paulson.

Then by Sept. 30, there was an additional drop of 15 percentage points-with three months left to go in the year.

As a result, some Paulson investors-who gave the firm a pass last year when the riskier version of the firm's umbrella fund, Paulson Advantage Plus, saw enormous losses-are now throwing in the towel.

Fed up with lagging returns at the hedge-fund management company, a number of investors large and small are opting to either reduce their capital at risk or yank it entirely by year's end.

It's the latest blow to fund manager John Paulson, who became famous in the investing world after he bet correctly on the collapse of housing prices in 2008.



"We expected, based on the way [Paulson] does things, that we're going to have periods of time where he's out of favor," said Craig Husting, the chief investment officer of the Public School and Education Employee Retirement Systems of Missouri, a pair of pension funds that have trimmed their investments in Paulson's Advantage Plus to a third of the original size over the past year and a half. "But just the beta - the volatility of his bets - is why we pared back."

With just days to go before an Oct. 31 deadline for investors who want to redeem their capital to notify Paulson, Husting may well be joined by a panoply of others.

They range from the private bank of of Citigroup (C), which revealed in August that it would claw back its funds (a process starting in 2013), to the 92nd Street Y, which people familiar with the matter said pulled its capital this year because of concerns about future potential losses and its investment mix.



Other significant players, including the brokerage arm of Morgan Stanley (MS), are considering pulling funds, but haven't yet made a final decision, people familiar with the matter said. (A spokeswoman for the 92nd Street Y didn't return calls for comment, and a Morgan Stanley spokesman declined to comment.)

Paulson, which is known for its aggressive, 25-person investor-relations team, isn't taking the reversals lying down.

"Recent performance in our Advantage Fund is disappointing and we understand investor frustration," said the firm in a written statement.

The firm noted that over the lifetime of the Advantage Funds, which were opened in 2004, Paulson had "far exceeded" both the event-driven hedge fund index and the Standard & Poor's 500-stock index (^GSPC), returning more than 10 percent annually.

It also noted that the vast majority of its current Advantage fund participants - 89 percent - have invested in it using gold as a currency, rather than dollars, an option Paulson offers to all its investors. In gold-share terms, the Advantage fund is flat for the year, the firm added, not down.

During the past year, Paulson has worked to appease worried investors.

Last winter, the company invited unhappy Advantage fund participants to move their capital into other Paulson funds while preserving their high-water marks. That meant that the former Advantage investors had the chance to participate in 100 percent of their new funds' profits, rather than the standard 80 percent, with the remaining 20 percent reverting back to Paulson management.

At the same time, Paulson set up a new risk-management structure that gathered for biweekly meetings and set new trading and leverage limits.

Ironically, though, it was some of the resultant hedges against a further credit crisis in Europe, as well as battered performances in Paulson's gold-miner portfolio, that have given the firm's Advantage funds trouble since.

Through Sept. 30, people familiar with the matter said, the Advantage Plus fund has fallen 15 percent, meaning that a dollar invested in it on Jan. 1, 2011, would be worth about 41 cents today. In the Advantage fund, the drop was roughly 10 percent, meaning that that dollar would be worth 57 cents today.

That fall has been equally pronounced in the firm's total assets under management.

Once $38 billion, the figure has fallen to nearly half that since early 2011, and now sits at nearly $20 billion, people familiar with the matter said.

Of that, about $12 billion belongs to John Paulson and his employees, creating what the firm described in its statement as "a very sticky capital base."

The firm also points out that on a capital-weighted basis, its funds are up an average of 2 percent this year.

Heartened by Paulson's tremendous wins during the recession and hoping 2011 was a one-off, many investors hung tight over the past year.

But an August announcement that Citigroup would remove Paulson from its internal hedge-fund platform, which initiated a $410 million redemption process, crystallized the doubts among some of the fund company's more patient investors.

"In my 20-plus years, I have never seen someone go from so high to so low in such a time period," said Brad Alford, who runs the Atlanta investment firm Alpha Capital Management and had originally invested about $10 million of his high net worth clients' money in Paulson. That figure, Alford estimated, is now closer to $3 million.

His frustration with Paulson is such that he's pulling out of a broader fund-of-funds platform entirely just to remove his capital from Paulson - even though the platform contains other funds he likes, such as DE Shaw's Oculus Fund, which is up by double digits so far this year.

"You just get so frustrated that you are done with the name, you are done with the manager, he's done something you can never go back from," Alford added. He's had better luck with mutual funds that employ hedge fund-type strategies with much more liquidity and a fraction of the fees, he said.

Paulson & Co. Facing Some Frustrated Investors

Many of Paulson & Co.'s investors hung with it last year despite an annus horribilis in which the company's flagship hedge fund lost 35 percent. But with returns continuing to sag amid a rising equities market, some of those investors are now jumping ship.



John Paulson


Citigroup (C) announced last week that it was pulling Paulson off its hedge-fund investment platform and planned to take back $410 million in assets.

Morgan Stanley's (MS) brokerage firm has reportedly had the fund company on watch for possible removal from its hedge-fund platform for months now. And other investors big and small are considering redeeming their capital soon as well, say bank officials and fund of funds managers.

During a phone call with clients and employees of Bank of America late Tuesday, Paulson & Co. founder John Paulson said he was “disappointed” about the loss of Citigroup as an investor, according to someone briefed on the call, but noted that the bank’s platform accounted for less than 2 percent of his company’s overall investments. Paulson also said that he wanted to “reaffirm” his commitment to the flagship fund and the “entire business,” this person added.

Still, the investor scrutiny comes at a sensitive time for the money manager.
These developments come at a difficult time for John Paulson, the former Bear Stearns banker who opened his eponymous hedge fund eighteen years ago. (Read More: After Slow Summer, Market Will Heat Up in September)

Paulson has gone from managing more than $38 billion in assets at his company's peak to $19.5 billion today. And while a number of his funds are up this year - including the merger fund, which is up 3.6 percent, and the recovery fund, which is up 3.9 percent - his flagship funds, which consist of holdings that represent an array of different strategies, continue to suffer.

Even worse has been Paulson’s gold fund, which he acknowledged during the BofA call as the worst-faring in his portfolio so far this year. But given the tumult in Europe, which the fund-company founder thinks could benefit the yellow metal, Paulson remains bullish on gold over the next five years, according to the person briefed on the call. (Indeed, the Bank of America executive who led the call described Paulson’s funds as a great way to play the “gold miner thesis,” this person added.)

So far this year, Paulson's main flagship fund, known as Paulson Advantage, is down about 13 percent, according to people familiar with the matter, and its levered sibling, Paulson Advantage Plus, is down 18 percent. And while the so-called redemption window - the moment at which investors can pull back, or redeem, their capital from a hedge fund - varies for Paulson investors according to which fund they are in and when they invested, the protracted slump in the flagship funds is prompting hard looks at investor portfolios. 

"Given the success he had, [Paulson] is going to have a longer leash than other managers. But at some point, every investor has to decide to lock away if they don't see it coming again," said Nick Bollen, a professor of finance who studies hedge funds at Vanderbilt University's Owen Graduate School of Management. (Read More: John Paulson Buys Saudi Prince's $90 Million Aspen Palace.)

Even though Paulson performed phenomenally well during the credit crisis, Bollen added, "there's no assurance that he'd be able to make similar timely calls in the future."

One fund of funds manager who redeemed investor money from the Advantage fund during its downturn last summer said he thought that Citigroup was simply late to recognize a plummeting investment, and that the bank should have fired Paulson months ago.


Still, other investors said it made little sense to redeem their money even after the losses of 2011, given that Paulson is now so far below his high-water mark - the asset level at which he must stay in order to charge fees to his investors - that he is now essentially managing their money for free.

In addition, added a second fund of funds manager, pulling Paulson off a platform like Citigroup's is problematic because it runs the risk of locking in losses, rather than letting clients who still like Paulson's funds to remain involved and potentially enjoy future upside returns.

"Clearly, [Paulson] has not performed well," said the money manager.

"We'll certainly discuss the pros and cons with our clients prior to the [next] redemption date," he added, which, in his case, would be the end of this year.

Paulson investor redemption windows vary according to individual fund and the timeframe of the original capital inflows. Some Advantage investors, for instance, are on quarterly redemption time frames, while others are on semiannual or even annual ones. In all cases, investors must provide 60 days' notice if they want to pull out their money.

While Citigroup has already closed Paulson funds off to new investors, its redemptions will play out over a yearlong period that begins in March 2013, said someone familiar with the matter.

More young professional investing

SINGAPORE: More young Singaporeans -- mainly professionals under the age of 40 -- are having a hand into trading shares on the stock exchange.

A recent research said the advent of online or Internet trading is the main driver behind the increasing number of young investors.

Some 58 per cent of Singaporeans are described as current or occasional investors.

Fifty per cent of potential investors are under the age of 40, with 65 per cent of them earning a monthly income between S$4,000 and S$6,000.

This is according to a study by Standard Chartered Bank which said on average, an individual owns at least 2.3 investments.

Stocks and unit trusts are the most popular forms of investments, accounting for 45 per cent of trade volume.

The survey polled some 500 professionals, managers, executives and technicians (PMETs) in Singapore.

It added online trading has increased investors' access to overseas markets.

Standard Chartered Bank Singapore and Southeast Asia regional head of wealth management Andrew Chia said: "Their favourite market is still SGX, followed by the US markets.

"... The younger and even some affluent customers... (have) started to do it on a DIY basis - they will buy and sell shares, ETFs (exchange traded fund) online, on their own".

But remisiers here said they are unperturbed by the rising competition from online trading.

Many said they believe it is unlikely their roles will be replaced by online trading and believe that both are complementary.

There are still numerous post-trading functions that remisiers perform, including payment and settlement matters.

The Society of Remisiers president Albert Fong said: "With the internet, while you're busy serving the customers who need more help, there are those who are very comfortable to trade on (their) own, and with our support, they are likely to trade more".

Remisiers said they also assist their clients with interpreting market information and understanding corporate entitlements such as bonus issues.

Meanwhile, the study has spurred Standard Chartered to launch its new online trading platform.

The bank said it believes there is potential for the online trading business, and also sees it as an added service for its customers who already conduct banking transactions online.

"We offer access to 10 different countries, 14 exchanges - very competitive charges," Standard Chartered Bank's Mr Chia said.

"And most importantly... we are the first to offer no minimum commission."

The bank charges no minimum commission, and fees of 0.2 per cent for trading of Singapore-listed shares and 0.25 per cent for trading in all other markets.

-CNA/wk