Street WISE :What is it that Temasek wants?
Last week the share prices of Shin Corp and its subsidiaries rose sharply after a report that Singapore's investment arm Tema-sek Holdings might reduce its stake in Shin to a minority shareholding.
If anything, the rebound shows that investors do believe that if Temasek agrees to do this the government will get off its back and let Shin and its subsidiaries get on with their business, resulting in the Shin empire regaining its shining position. Seen matter-of-factly, once Temasek is a minority shareholder of Shin, its indirect ownership of Shin Satellite (ShinSat) and iTV will be insignificant, reducing the political pressure. This perception reminded me of an article in the New York Times. It started: "Among the many measures of a successful foreign investment, helping to trigger a coup d'état is definitely not one of them. In hindsight, then, the US$1.9-billion [Bt71-billion] purchase of a controlling stake in Thailand's dominant telecommunications conglomerate early this year by a group of inves-tors led by the Singapore government's investment arm, Temasek Holdings, has been less than ideal, say analysts and people close to the deal." Indeed it amazes me why Temasek does not just have Shin dispose of its shares in ShinSat and iTV, if these two companies are of such immense interest to Thais who say that no foreigners should have a say in the two companies' concessions as these are national assets. It would be easier that way. In fact Temasek apparently does not want to own ShinSat and iTV, as is affirmed by a message from its chairman, S Dhanabalan, in a company document, where he says: "The telecommunications sector is a proxy for the rising middle class in Asia. The long-term economic prospects of Thailand and her dynamic telecommunications sector led us to join a consortium of Thai investors to invest in Shin Corp. This gives us exposure to Thailand's growing middle class via Advanced Info Service [AIS], the leading mobile-telecommunications associate of the group with more than 16 million subscribers." He does not mention ShinSat, iTV or any other companies that Shin has owned, including Capital OK or Thai AirAsia, which confirms my assumption that Temasek has never wanted anything to do with the rest of the empire and its focus is solely on AIS. If this is true, it is interesting why Temasek had to buy Shin Corp as a job lot, not just AIS. Was it tricked by anyone?
achara_d@nationgroup.com
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