Singapore state-owned investment arm and sovereign wealth fund Temasek Holdings incurred a loss of approximately £800 million, in an ill-timed decision to offload its holdings in Barclays in the December 2008- January 2009, when the UK bank's stock value close to its lowest.

Temasek, which had started acquiring the Barclays stock since 2007, had invested over $1.7 billion for a 2-per cent stake in, but made a wrong sell bet by offloading the entire stake in the December- January last, at a time when the bank's stock value had plunged due to the global banking crisis.

The Singapore sovereign wealth fund had bought Barclays shares at 720 pence each and had agreed to buy more stock by investing another £200 million last July at 282 pence each, but as usual, it did not disclose how many shares it bought.

According to media reports, Temasek would have invested around £90 million, thereby giving it a total of 167 million shares or 2 per cent holding in Barclay's, but, in an ill-timed decision sold-off its entire 2 per cent stake in the December- January period of 2008-2009, incurring a loss of around £800 million.

In contrast Abu Dhabi-based International Petroleum Investment Company managed by Sheikh Mansour bin Zayed al-Nahyan, a member of the Abu Dhabi ruling family, made a huge profit of 70 per cent or over £3.5 billion on an investment of £2 billion in Barclay's in just seven months. (See: Abu Dhabi investor to sell Barclay's stake with windfall profits)

Sheikh Mansour had invested more than £3.5 billion in October last year in the Canary Wharf, London-based Barclay's bank, which had opted for thye Middle East investment over the UK government's condition-laden bailout offer to help crisis-affected british banks to recapitalise, after regulators demanded that it raise its capital reserves to more than £10 billion by issuing equity. (See: Barclays shuns UK bailout loan in favour of Middle East money)

Barclays, the UK's third-largest bank by market value after HSBC and RBS, which had a significant exposure to investment banking through Barclays Capital, saw its stock value plunge due to the global banking crisis.

Its share price, which was at an average of 145 pence in December, fluctuated widely between around 50 pence and 190 pence in January.

But surprisingly, since February, the stock price of Barclays had staged a remarkable recovery and soared on the back of heightened activity in the capital markets and was quoted at an average of 270 pence last week.

Temasek had invested nearly £1 billion in Barclay's in July 2007 by buying shares at 720 pence each.

Last year, Temasek made a loss of $4.5 billion in Bank of America when it sold its 3.8 per cent stake in  the US bank. (See: Temasek sells BoA stake at a loss)

The $4.5-billion loss is the largest loss in a single investment by any global sovereign wealth fund anywhere in the world.

Last week, Singapore's finance minister Thurman Shanmugaratnam faced angry MPs, who grilled him at Temasek's loss of around $39.91 billion in the value of its investments between March 2008 and November 2008 during the global economic meltdown. (See: Temasek loses $39.91 billion to the onslaught of global recession)

The Singapore sovereign wealth fund that manages a portfolio of over $134 billion as on 31 March 2008, lost about half of its portfolio gains made in the previous five years.
Temasek had made a wide array of investments last year and has been steadily increasing its stake in Standard Chartered over the past two years, and is now said to own 19.03 per cent valued $8.4 billion.

It has also invested in two large state-owned Chinese banks, China Construction Bank and Bank of China and the privately owned Mingsheng Bank.

Temasek also has investments in Thailand, Indonesia and India. The company has set up the $100-million Merlion India Fund to investment in mid-to late stage Indian companies and it had invested in ICICI Bank and Tata Consultancy Services apart from buying equity in Tata Teleservices, Bharti Infratel and Punj Lloyd.