GIC gives UBS share sale a miss

(SINGAPORE) The Swiss government has sold its entire 9.3 per cent stake in UBS for a tidy profit, less than a year after it poured six billion Swiss francs (S$8.15 billion) into the country's biggest bank.

The Government of Singapore Investment Corporation (GIC) said it did not buy any of the UBS shares sold by the Swiss government, but added that it remains confident of the long-term prospects of its earlier investment.

The Swiss government sold all 332.2 million UBS shares it controls to institutional investors for 16.50 francs each, or a total of some 5.48 billion francs, yesterday, the Swiss Federal Department of Finance said in a statement in German on its website.

The government will receive another 1.8 billion francs in cash from UBS as payment for waiving its right to future coupon payments on the mandatory convertible notes through which it held its investment in the bank.

Such notes earn interest like debt, but must be exchanged for ordinary shares by a fixed maturity date. The notes held by the Swiss government paid interest of 12.5 per cent a year, and were due to mature in June 2011.

In total, the government will receive 7.2 billion francs, or a profit of 1.2 billion francs on the sale of its six billion franc investment in UBS, it said.

Blackstone's Schwarzman tops U.S. CEO payroll: study | Reuters

BOSTON (Reuters) - Taking his private equity firm public paid off big for Blackstone Group LP's Stephen Schwarzman, who became the top-paid chief executive in the United States last year, a title he is likely to retain for some time, according to an analysis released on Thursday.

The vast bulk of Schwarzman's pay -- $699.8 million of a total $702.4 million -- reflected the vesting of equity grants he received when the company went public in 2007. The vesting will continue over the next four years.

"It is reasonably safe to assume that Mr. Schwarzman will remain at the top of (the) highest paid CEOs list, or close to it, for a few years to come," the report says

Property scene not too frothy: CDL

PROPERTY tycoon Kwek Leng Beng believes the Government may try to cool the property market - if it gets too frothy - by resuming its regular land sales programme as a way to boost supply.

However, the City Developments (CDL) chairman also said yesterday that the current buying momentum can be sustained and should not be seen as over-exuberant."

UBS hires M.Stanley banker to grow convertibles

LONDON, Aug 13 (Reuters) - UBS (UBSN.VX) (UBS.N) has hired Morgan Stanley's (MS.N) Armin Heuberger to head its equity-linked capital markets business for the Europe, Middle East and Africa (EMEA) region.

Morgan Stanley topped Thomson Reuters EMEA convertibles league table, underwriting 13 deals out of 35 issues so far this year, while UBS has handled three deals, including Air France-KLM's (AIRF.PA) $919 million convertible bond in June.

Heuberger will replace James Eves, who will take on a new role advising financial institutions on equity capital markets (ECM) in EMEA, according to an internal UBS e-mail.
Both will report to Peter Guenthardt, head of ECM for the region.

Heuberger was co-head of the same business at Morgan Stanley. He will now also run UBS's ECM business in Germany. (Reporting by Daisy Ku; Editing by David Holmes)"

AFP: Singapore property market booms despite recession

SINGAPORE — Despite Singapore's worst economic slump since independence, the residential property sector is in the midst of a new boom reminiscent of 2007, when the city-state was known as the world's hottest real estate market.

Greed and its twin brother fear are back in play as punters stake out condo launches days before sales open, with some offering blank cheques to pre-book flats, prompting the government to hint it may have to cool things down.

'Some of the practices and habits that you saw in the last property boom are beginning to come back, so I think we'll have to be careful,' said Minister for National Development Mah Bow Tan.

'A little bit of speculation is inevitable in every market, but when it becomes excessive, then it is something that we should try to avoid,' he said."

UBS Hires Bankers From Merrill, Goldman for Debt Unit

Aug. 11 (Bloomberg) -- UBS AG, Switzerland’s largest bank by assets, hired more than 20 senior bankers from competitors including Merrill Lynch & Co. and Goldman Sachs Group Inc. to strengthen its fixed-income division.

The hires include Dimitri Psyllidis, formerly at Merrill, who joined Zurich-based UBS to head foreign exchange and rates trading globally, according to a memo sent to staff yesterday. He will report to Carsten Kengeter and Jeffrey Mayer. Bobby Gerjarusak joined in Hong Kong from Goldman Sachs to run fixed- income, currency and commodities structuring in Asia-Pacific.

Goldman Sachs's Q2 net surges 65 per cent to $3.44 billion

Wall Street banking major Goldman Sachs on Tuesday reported a 65 per cent surge in profit at $3.44 billion on net revenues of $13.76 billion in the second quarter ended 26 June 2009.

Goldman Sachs, which recently returned federal bailout funds to the tune of $10 billion, had reported a profit of $2.09 billion and revenues worth $9.42 billion in the comparable period of the previous year.

Diluted earnings from shares rose to $4.93 in the second quarter from $4.58 in the first quarter. Annualised average return on equity rose to 23 per cent in the second quarter from 18.3 per cent in the first quarter.

Excluding one-time preferred dividend of $426 million related to the repurchase of the firm's TRAP common stock, diluted earnings per common share were $5,71 and annualised return on equity was 23.8 per cent for the second quarter and 19.2 per cent for the first half of 2009."

Morgan Stanley $100 Million Trading Days Fell to 22 in Quarter

Aug. 7 (Bloomberg) -- Morgan Stanley’s traders made $100 million or more on 22 days during the second quarter, compared with 24 days in the prior three-month period.
The company lost money on four days from April through June, down from 14 days in the previous quarter, the New York- based firm said today in a quarterly filing with the U.S. Securities and Exchange Commission.

Morgan Stanley, the sixth-biggest U.S. bank by assets, lags behind larger rival Goldman Sachs Group Inc. in trading revenue. During the second quarter, Goldman Sachs’s traders reaped $100 million or more on a record 46 of the firm’s 65 trading days, up from 34 days in the first quarter.

Morgan Stanley’s second-quarter fixed-income revenue of $973 million compared with $6.8 billion at Goldman Sachs, while equity trading revenue of $681 million compared with $3.18 billion at Goldman Sachs.

Top Firm's Trading Record Astounds Market

Bloomberg reports that Goldman Sachs, which managed to bag $3.44bn in the second-quarter, has astounded the market by its trading prowess in the period.

The news agency reports that, according to a Securities and Exchange Commission filing, Goldman only lost money on two trading days during April, May and June, and that the firm made at least $50m on 58 of the 65 trading days in the period. Goldman also reaped profits of at least $100m on 46 days, 71% of the time!

Many think that Goldman's trading success is built on some kind of black magic formula, or cooked up by special recipe. Well, it's not. Our Highly-Placed Professional says: 'Many firms increased VAR when it became clear earlier this year that there would be no financial meltdown, but Goldman has the biggest risk appetite, and some of the smartest people who trade perhaps the broadest portfolio of products out there. And, just as importantly, their risk management tools are among the best on the Street'.

Berkshire May Post Blockbuster Result, by CEO’s Gauge

Aug. 6 (Bloomberg) -- Berkshire Hathaway Inc., with a stock portfolio valued at more than $60 billion, may report its best quarter in at least two years using the metric preferred by the firm’s billionaire chairman, Warren Buffett.

About $11 billion in gains in Berkshire’s stocks and a recovery of derivative bets tied to equity markets caused book value, a measure of assets minus liabilities, to reverse after two quarters of declines, according to analysts and investors including Glenn Tongue at T2 Partners LLC. Berkshire is set to report second-quarter results tomorrow.

“It’s going to be a blockbuster,” said Tongue, whose New York-based firm’s largest holding is Berkshire shares. “It may well be the greatest dollar gain in book value in any quarter in the history of the company. Warren Buffett showed extraordinary discipline in the first quarter when all others were losing their heads.”

With RBS deal, ANZ gears up to take on HSBC, Citigroup

Sydney: Australia’s fourth biggest lender, Australia and New Zealand Banking Group Ltd (ANZ), which on Tuesday agreed to buy Asian assets from Royal Bank of Scotland Group Plc. (RBS), is prepared to take on the likes of Citigroup Inc. and HSBC Holdings Plc as it expands in the region.
ANZ is going to be a regional player, chief executive officer Michael Smith said in a Bloomberg television interview. “I don’t want to take on HSBC or a Citigroup in Latin America or in the states (US) or in Europe, but if it’s in our backyard, in this region, then yes, we’ll take them on.”

ANZ Bank will pay $550 million for the RBS businesses in Singapore, Taiwan, Indonesia, Hong Kong, the Philippines and Vietnam, the Melbourne-based bank said in a statement to the stock exchange.

Standard Chartered bank H1 profit up 5.5 percent, provisions for bad loans double

LONDON — Standard Chartered PLC reported Tuesday that first-half profit rose 5.5 percent compared with a year ago even as provisions for bad loans more than doubled to over a billion dollars.

The bank also announced a share placing to raise about 1 billion pounds ($1.7 billion) to support expansion in key markets in Asia, Africa and the Middle East. The placing comes six months after Standard Chartered raised $2.68 billion from a rights issue.

The bank said net profit was $1.88 billion compared with $1.79 billion in the first half of last year.

Standard Chartered said it achieved a record half-year operating profit of $2.8 billion, up 10 percent from a year earlier.

Provisions for losses on bad loans rose to $1.088 billion, up 133 percent from $465 million in the first half of 2008.

Standard Chartered said profit from wholesale banking rose 37 percent, offsetting poor results in some countries: profit in Korea fell 61 percent, partly due to the depreciation of the won; profit in the Middle East and South Asia fell 43 percent.

Nonetheless, Chief Executive Peter Sands said there were opportunities which Standard Chartered could seize with new funding.

“We have learned the power of playing from strength,” Sands said. “More capital will also enable us to take full advantage of the opportunities emerging from the crisis. Asia will emerge faster than the rest of the world.”"

Bank of America to pay $33m to settle Merrill bonuses case

Bank of America has agreed to pay $33m for charges of allegedly misleading investors about billions in bonuses it agreed to pay Merrill Lynch executives when it was on the verge of acquiring Merrill for $50bn in a 2008 merger, reports the New York Law Journal.

The payment settles a civil suit filed in the Southern District of New York by the Securities and Exchange Commission (SEC)."

UBS Posts $1.3 Billion Quarterly Loss

Swiss bank giant, UBS AG (NYSE: UBS), reported Tuesday a second-quarter net loss of 1.4 billion Swiss francs [CHF] ($1.31 billion) compared with 1.97 billion francs ($1.85 billion) in first quarter 2009. According to Switzerland’s biggest bank by assets, the results were driven by lower losses on risk positions from businesses now exited or in the process of being exited by the bank.

UBS said it recorded a credit loss expense of 388 million francs in Q2 compared with 1,135 million francs in Q1.The second quarter earnings included a 1.2 billion-CHF charge related to the company’s own debt, and a total operating income increase of 5,770 million CHF in Q2 from 4,970 million CHF in Q1.

The financial services firm also said its Q2 earnings included 582 million CHF in reorganization costs and a goodwill impairment of 492 million CHF related to the sale of Brazil’s UBS Pactual unit. The bank suffered $37.1 billion of outflows at its wealth and asset management divisions. The outflows were concentrated in the international business, whereas the Swiss domestic business remained stable. According to the firm, the US cross-border issue and its exit from the US cross-border business are having a major influence on the Q2 results.

The U.S. government and UBS struck a deal in principle on Friday to end tax litigation against the Swiss wealth management giant. As part of the deal, UBS will not pay a fine in exchange for handing over 5,000 names of U.S. clients holding secret Swiss accounts — about 10% of the names Washington was after.

“This is a positive development in a matter that has adversely affected our efforts to regain the trust of our clients and to restore momentum to our business,” Chief Executive Oswald Gruebel and Chairman Kaspar Villiger said of the prospective deal. [Reuters]

UBS, which on October of last year accepted a 6-billion-Swiss franc state cash injection after making $54 billion writedowns on toxic assets, said it reduced its balance sheet by a further 261 billion francs during the second quarter and held total assets of 1,600 billion francs on June 30, 2009.

Tracking the Property Market

Some condo I monitor .....

The Waterside

This has the upside of having enbloc potential should the market return again.

Price / Area (Sqft) / Unit Price ($psf) / Date
2,300,000 / 2,174 / 1,058 / Jun-09
2,525,000 / 2,411 / 1,047 / Jun-09
2,500,000 / 2,411 / 1,037 / Jun-09
1,600,000 / 2,142 / 747 / Apr-09
1,560,000 / 2,142 / 728 / Mar-09
1,680,000 / 2,142 / 784 / Mar-09
1,725,000 / 2,174 / 793 / Feb-09
3,068,000 / 2,400 / 1,278 / Sep-08
2,180,000 / 2,142 / 1,018 / Jul-08

Looks like prices has indeed recovered since Q1 2009

Botanical Gardens Area:

Project / Price / Area (Sqft) / Unit Price ($psf) / Date
BOTANIC GARDENS MANSION / 1,790,000 / 1,755 / 1,020 / Jun-09
BOTANIC GARDENS MANSION / 1,550,000 / 1,755 / 883 / Mar-09
BOTANIC GARDENS MANSION / 2,380,000 / 1,755 / 1,356 / Sep-08

Project / Price / Area (Sqft) / Unit Price ($psf) / Date

BOTANIKA / 2,856,000 / 2,034 / 1,404 / Jun-09
BOTANIKA / 2,150,000 / 1,539 / 1,397 / Jun-09
BOTANIKA / 5,579,520 / 2,906 / 1,920 / Sep-08

Project / Price / Area (Sqft) / Unit Price ($psf) / Date
BOTANIC GARDENS VIEW / 2,580,000 / 1,755 / 1,470 / Sep-08

Not too many transactions done but does seem to show signs of increases since Q1 2009

Recent Property Launches

More than 1,000 thronged Wing Tai's Ascentia Sky showflats in Redhill when the 373-unit condo was launched yesterday. It has sold 85 per cent of the 120 units put up, at prices of around $1,300 psf.

Far East Organization, for instance, resumed sales of its Silversea condo in Amber Road and has sold 57 of the 80 units released since July 10. Prices range from $1,200 to $1,700 psf.

It has also sold 80 per cent of the 182 units released at Vista Residences in Thomson, with prices from $1,100 psf.

The current fizz is setting new price benchmarks in suburbia, with the upcoming Centro Residences, next to AMK Hub, tipped to cross the $1,000 psf mark.

Another condo, Optima in Tanah Merah, which will preview at month's end, will be sold at around $900 psf. Its developer, TID, said it has had more than 1,000 inquiries.

UBS not to pay fine in U.S. tax settlement: reports

ZURICH (Reuters) - Switzerland's UBS will not have to pay a fine as part of the settlement of a tax evasion dispute with the United States, two Swiss newspapers reported on Sunday.
The NZZ am Sonntag and SonntagsZeitung both also reported that data of some 5,000 UBS clients would be released to the U.S. authorities. The two papers cited unnamed sources familiar with the case.

Spokesmen for the Swiss justice and the foreign ministry declined to comment on the reports. UBS was not immediately available.

The U.S. government and UBS struck a deal to settle a dispute over tax evasion and Switzerland's bank secrecy on Friday, heading off a showdown that had threatened to sour relations between the U.S. and Switzerland.

The main sticking point was that U.S. authorities wanted UBS to disclose the names of 52,000 wealthy American clients suspected of using the bank to evade taxes -- a demand that tested Switzerland's vaunted tradition of bank secrecy.

The parties still have to work out details, which are expected by Friday, when a new pretrial status conference is scheduled. The court trial against UBS has been reset for Aug 10, but would be called off if a final deal is signed.

Switzerland's top-diplomat Michael Ambuehl told the NZZ am Sonntag, the deal would not violate Swiss law.

"The Swiss legal system is maintained, because the U.S. have promised to act on the basis of the current agreements and to ask for legal assistance again," said Ambuehl, who is state secretary in the foreign ministry.

Swiss justice minister Eveline Widmer-Schlumpf, whose ministry is in charge of the negotiations together with the foreign ministry, said in a newspaper interview the parties had still to agree on important details.

"I am optimistic, that an agreement can be reached," she told Swiss paper Sonntag.
But she warned that worries of a failure were not unfounded.

"There are still details to be cleared, which are of importance to us," she said. "Should we not reach an agreement, which is in line with our Swiss laws, a deal would be put into question."

IN PRINCIPLE
Under the settlement, described as an "agreement in principle" expected to be finalized by next Friday, UBS is likely to reveal far fewer than 52,000 client names, but would include the biggest accounts, a U.S. government source had told Reuters.

UBS Chairman Kaspar Villiger said earlier this month the tax talks were focusing on client names rather than on a potential payment by UBS.

A U.S. government source who has followed the case closely had downplayed talk of a financial penalty."I don't think there's going to be a fine component at all," the source, who spoke on condition of anonymity, had told Reuters on Friday.

UBS, which is struggling to recover from the subprime crisis after posting the biggest annual loss in Swiss corporate history last year, agreed in February to pay $780 million to settle separate but related criminal tax fraud charges.

The bank will publish second quarter results on Tuesday and analysts expect it to report a loss of some 1.1 billion Swiss francs ($1.01 billion).

UBS Tax-Probe Settlement Nears as U.S., Swiss Reach Agreement

Aug. 1 (Bloomberg) -- UBS AG, the Swiss bank that’s set to report a third consecutive quarterly loss, may be close to resolving a U.S. tax probe that spurred defections by wealthy customers.
The U.S. and Switzerland “have reached an agreement in principle on the major issues,” U.S. Justice Department attorney Stuart Gibson said in a telephone conference call with U.S. District Judge Alan Gold yesterday. The remaining points will probably be settled in the next week, he said.

“Now they’ll be able to start rebuilding the brand,” said Teresa Nielsen, a Zurich-based analyst at Bank Vontobel who has a “hold” rating on UBS. “Once this issue is off the table, there are still others to solve.”

The U.S. sued UBS on Feb. 19, seeking names of 52,000 clients, a day after the largest Swiss bank by assets agreed to pay $780 million to defer prosecution for helping wealthy Americans evade taxes. Zurich-based UBS agreed then to an unprecedented breach of Swiss secrecy laws by giving the U.S. data on more than 250 accounts.

Judge Gold rescheduled an evidentiary hearing to Aug. 10, in case a deal isn’t reached. The IRS seeks the data because it suspects American account holders of evading taxes. Switzerland called the case a threat to its sovereignty and said it would force UBS to violate criminal laws protecting bank secrecy.

The parties declined to provide any additional information on the agreement, citing confidentiality.

Loss Estimate
UBS said on June 25 it expected a second-quarter loss. That follows $53.1 billion of writedowns since the financial crisis started in 2007, according to data compiled by Bloomberg. Analysts surveyed by Bloomberg estimate the second-quarter deficit will amount to 1.5 billion Swiss francs ($1.38 billion), compared with a 395 million-franc loss a year before.

UBS may book about 650 million francs in reorganization costs and 1.2 billion francs in own-debt charges when it publishes results on Aug. 4, the analysts estimate.

Chief Executive Officer Oswald Gruebel, who joined in February, said in a memo to employees last month that he saw “encouraging signs” in the quarter as operating earnings improved and writedowns decreased. An agreement to settle the U.S. lawsuit may bring UBS a step closer to Gruebel’s goal of halting outflows at the wealth-management unit, analysts said.

UBS rose 3.9 percent in Swiss trading yesterday after the agreement was announced. The stock is up 5.2 percent this year, compared with a 77 percent increase in Swiss competitor Credit Suisse Group AG and a 32 percent gain in the 63-company Bloomberg Europe Banks and Financial Services Index.

Possible Fine
The details of any settlement will determine its implications for UBS, analysts said. The bank may have to pay a fine of 1 billion francs, Huw van Steenis, a London-based analyst at Morgan Stanley, estimated last month.

“Paying 1 or 2 billion francs today after having written down more than $50 billion doesn’t make a big difference,” said Javier Lodeiro, a Zurich-based analyst at Bank Sal. Oppenheim with a “buy” rating on UBS. “If they have to disclose client names that probably wouldn’t be that good.”
UBS’s wealth-management units suffered 134 billion francs of net outflows since the second quarter of 2008, when it was made public that the U.S. Justice Department was investigating whether the bank helped American clients evade taxes.

Gruebel told employees in the July 14 memo that they “must do everything” to stop outflows from the money-managing units, which continued in the second quarter. He said he will outline plans to reorganize units on Aug. 4.

Weaker than Peers
“We are working on concrete strategic and operational plans group-wide as well as in the individual business areas,” Gruebel said.

Since joining UBS out of retirement, Gruebel cut 7,500 jobs, replaced three members of the executive board, sold the Brazilian Pactual unit and raised 3.8 billion francs in capital. He said the bank should focus on rebuilding and protecting its reputation, integrating its businesses more closely and increasing the quality and efficiency of servicing clients.

Underlying earnings are “still weak,” Matt Spick, an analyst at Deutsche Bank AG, said in a note. “This is at least in part because we expect continued weaker-than-peer performance in the investment bank, and because we do not expect the benefits of cost cutting to be visible until the third quarter.”

UBS’s securities unit may report a pretax loss of 1.66 billion francs for the second quarter, compared with a loss of 5.24 billion francs a year earlier, according to analysts’ estimates. The main wealth-management division may say earnings fell by half to 990 million francs as assets slumped.

The unit probably saw net withdrawals of 13 billion francs in the quarter, in addition to 5 billion francs of outflows from the wealth management Americas and asset management businesses, according to analysts.