Temasek sold Barclays stake

June 4, 2009

Temasek sold Barclays stake

By Alvin Foo
		Sources told The Straits Times that Temasek sustained a loss of between 500 million pounds and 600 million pounds on the sale, which was said to be have been completed in December and January. -- PHOTO: BT

TEMASEK Holdings sold its stake in British banking giant Barclays in December and January, at an estimated loss of between &pound500 million (S$1.2 billion) and &pound600 million, sources have told The Straits Times.

News of the sale first broke Wednesday with a Reuters report in London saying that the Singapore investment agency had lost up to &pound800 million on the sale of its holding of almost 2 per cent.

RELATED LINKS BARCLAYS SHARE PRICE IN THE PAST YEAR

Temasek and Barclays both declined to comment when contacted by The Straits Times Wednesday. A Temasek spokesman said: 'We don't comment on unsourced reports.'

The sale was apparently done during December and January, a tumultuous period for global markets. Barclays shares ranged from 136 pence to 167.8 pence in December but swung wildly from 47.3 pence to 190.6 pence in January.

In January, the stock hit its lowest since 1985, reflecting the near-panic over bank shares, and Barclays in particular, given rumours it could be nationalised.

The shares have recovered sharply since, partly due to improved market sentiment and partly due to its posting a 15 per cent jump in pre-tax profits to &pound1.37 billion in the first quarter this year. They closed at 273.5 pence on Tuesday and hovered around 260 pence yesterday. Temasek paid &pound975 million to buy the shares at 720 pence apiece in July 2007.

The Reuters report came a day after news that the Abu Dhabi government made a killing in its Barclays investment.

It bought into Barclays last October - just weeks after the collapse of Lehman Brothers - and sold out for a US$2.5 billion profit seven months later.

The Straits Times understands that Temasek was also approached in October to increase its investment, but declined.

This is Temasek's second exit from a high-profile investment in a Western bank recently. It sold its 3 per cent stake in Bank of America (BoA) in the first three months of the year, crystallising estimated losses of between US$2.3 billion (S$3.3 billion) and US$4.6 billion.

Although Temasek has suffered heavy losses on these investments, its long-term record has nonetheless been defended as being comparable to those achieved by top fund managers.

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