Top Stock Market Highlights of the Week: GIC and Temasek, Manulife US REIT and Credit Suisse

Welcome to this week’s edition of top stock market highlights.

GIC and Temasek

It’s helpful to observe the types of companies and businesses that long-term investors invest their money in.

Of note, investment firm Temasek Holdings has long touted its long investment time horizon.

Temasek’s portfolio stood at S$403 billion as of 31 March 2022 and it has 12 offices across eight countries.

Similarly, the Government Investment Corporation, or GIC, which manages the Singapore government’s reserves, also espouses a long-term philosophy.

Both Temasek and GIC are among a crop of new investors that injected money into Stripe, an Irish-American software-as-a-service (SaaS) company offering financial services.

Stripe had recently raised more than US$6.5 billion in a fundraising exercise that valued the firm at US$50 billion.

The payments company was founded back in 2009 by two Irish brothers, John and Patrick Collision.

Just two years later, Stripe received an investment of US$2 million from a group of investors that included PayPal’s (NASDAQ: PYPL) founder Peter Thiel and Tesla’s (NASDAQ: TSLA) CEO Elon Musk.

Stripe is seeing healthy traction in garnering customers as more businesses shift online, and counts the likes of Amazon (NASDAQ: AMZN), Salesforce (NYSE: CRM), and Ford Motor (NYSE: F) as its customers.

In particular, the payments specialist is seeing healthy momentum from start-ups.

An impressive statistic is that Stripe handles more than US$1 billion moving through its platform from 100 businesses.

Three-quarters of this group use Stripe for more than just payments while seven out of 10 use the SaaS company’s platform to manage operations across multiple countries.

Manulife US REIT (SGX: BTOU)

Manulife US REIT, or MUST, has not had an easy time in the last few months.

The US commercial REIT recently reported that its portfolio’s valuation had declined by 10.9% year on year to US$1.95 billion as of 31 December 2022.

As a result of this fall, its aggregate leverage has jumped from 42.8% in 2021 to 48.8% in 2022, putting it dangerously close to the Monetary Authority of Singapore’s 50% gearing threshold for REITs.

The unit price of MUST has been on a steady decline, plunging by 58.6% in one year to close at US$0.265.

On 15 March, the manager of MUST announced that it was in discussions with Mirae Asset Global Investments (MAGI) to explore a potential transaction.

The transaction may involve the acquisition of shares in the manager or the subscription of new units in MUST.

MAGI is the asset management arm of Mirae Financial Asset Group, a leading financial services company that invests over U$198 billion of assets on behalf of its clients across 13 different markets.

A Business Times article has stated that the value of the transaction is KRW 200 billion, but the manager has stepped in to clarify that the proposal from MAGI does not contain such a figure.

This proposal is also non-binding and ongoing due diligence is still being conducted by MUST’s manager.

Furthermore, MAGI’s proposal involves the subscription of new units in MUST and the asset manager will not acquire any existing units, implying that existing unitholders may get severely diluted.

Credit Suisse (NYSE: CS)

Credit Suisse is also going through a crisis of its own.

Switzerland’s second-largest bank was engaged in a major restructuring program since October 2022 following a series of scandals that sullied its reputation.

Just this Wednesday, the bank saw its share price plunge 31% after major shareholder Saudi National Bank said it will “absolutely not” raise its stake in Credit Suisse due to regulatory constraints.

The Swiss National Bank (SNB) then stepped in and said that liquidity will be available if Credit Suisse needed to tap into it.

The embattled bank then announced that it will borrow up to US$54 billion to shore up its balance sheet.

The news caused shares of Credit Suisse to regain some lost ground, closing up nearly 20% to 2.02 Swiss Francs after touching an all-time low of 1.55 Swiss Francs.

It remains to be seen if the crisis has passed for the bank as it continues to struggle with a lack of confidence amid panic in the banking sector after the collapse of Silicon Valley Bank.

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Disclosure: Royston Yang owns shares of PayPal.

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