"There's a Chinese proverb along the lines of “a fall into a ditch makes you wiser”. Ho Ching, chief executive at Singapore's giant sovereign wealth fund Temasek will know it well. But has she acted on it?
Temasek fell into a veritable quarry at the end of last year when it invested $4.4 billion in Merrill Lynch under the illusion things could only get better for the Wall Street bank under new chief executive John Thain. Since then, Merrill has unveiled a further two quarters of successive losses and last month sought an extra $8.5 billion in capital, only days after Thain told investors the bank was adequately capitalised.
Yet this week, Temasek applied with the Wall Street authorities to raise its stake in Merrill from 9.45% to as much as 14%. This despite its hundreds of millions of dollars of losses."
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"In the UK, Barclays has been among the beneficiaries, with Temasek taking a 1.77% stake last July when the shares were 720p. You can bet there have been interesting conversations about that between Ho Ching and her husband, Singapore's Prime Minister. Today, Barclays changes hands at 328p — a loss to Temasek of well over $1 billion."
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