If you have bought a life insurance policy (i.e. whole, life, endowment, investment linked, or variation) during the past two years, you can participate in this survey.
Read the survey results.
Saturday, January 31, 2009
Survey: Democracy
Ho Cheow Seng wishes to help me to educate people about values and character. He has written this article about democracy.
Here are the
Give your views on budget 2009
How do you feel about the budget 2009?
Read the survey results.
The average rating from 95 respondents are:
a) The budget is good for business (rating 3.78)
b) The general election will be called in 2009 (rating 2.97)
c) The average rating for the other questions are lower than 2.66.
A rating of 3.0 is neutral. A rating below 3 indicates that more people disagree with the statement, compared to those who agree.
On the whole, the respondents are less confident about the benefit of the budget for the people, in saving jobs, in spurring economic recovery or helping the unemployed. There is also a negative level of confidence in the leaders.
The ratings are similar across age groups. The employed have a slightyly higher level of confidence, compared to business and the unemployed/retired.
From Financial Times
Sometimes dubbed the world’s most socialist country, Japan never went in for the CEO cult. On average, big company executives earn about three times as much as the rank-and-file – comfortably within the four-fold ideal espoused by Plato two and a half millennia ago.
That is also a far more modest gap than the 39 times differential prevailing among FTSE 350 board members and employees, as measured by research house IDS. It is not even in the same universe as the US, where the left-leaning Institute for Policy Studies reckons CEOs take home 344 times more than the average worker.
Sometimes dubbed the world’s most socialist country, Japan never went in for the CEO cult. On average, big company executives earn about three times as much as the rank-and-file – comfortably within the four-fold ideal espoused by Plato two and a half millennia ago.
That is also a far more modest gap than the 39 times differential prevailing among FTSE 350 board members and employees, as measured by research house IDS. It is not even in the same universe as the US, where the left-leaning Institute for Policy Studies reckons CEOs take home 344 times more than the average worker.
Thursday, January 29, 2009
Budget 2009 is not pro-people
Comment by SB on the survey results for Budget 2009
Lim Swee Say as head of the workers movement must robustly champion the workers' interest within the tripartite. In what is supposed to be a rescue package ultimately for the benefit of workers and the people of Singapore, it turns out that companies turn out to be the main direct beneficiary getting the lion's share of the $20.5 billion help package. As sure as the sun rises, companies will still fold, workers will still lose jobs or suffer pay cuts. To these workers, the money which will go to the companies will have no benefit to them.
Not by any measure is he, as supposedly the workers' champion, justified to declare full satisfaction with the direct allocation to workers and to those who will be retrenched. Why didn't he tell the public that he had fought for a bigger direct share for the workers, even if he failed to get his bosses, oops I mean the other members of the tripartite, to change their minds.
Do you notice that with all the distractions of the recession and the help budget, the govt. has opportunistically sneaked in an increase of almost $1000 million to the security (defence and home affairs) budgets, bringing the Defence and Home Affairs Budgets to historical highs of over $11.4 billion and $3 billion respectively. This is one of the real reasons (quietly though) why our past reserves have to be used for this year's budget.
The Defence spendings tower above every other budgetary spendings. This, despite the gloomy outlook for the next 24 months or more. Money should be conserved (and channeled to fund more direct people-help programs, say, for retrenchment benefits). Some military spendings could surely be postponed or paced out until better days come back. It is not as though we are under-invested in defence. After years and decades of heavy military spendings, we have as of now already the most invested and equipped armed forces than the rest of ASEAN combined. That betrays the under-emphasis on real care and focus this govt has on people-related needs vs. growth and power.
The rating of “best” for this Budget is I think mainly based on the huge total amount of help programs. But if you look at the measurable benefits that will land in the hands of Singaporeans, then “best” is somewhat an overstatement. Let me say why:
1. The direct help for individuals & households amount to less than 13% ($2.6 billion) of the total. 66% ($13.5 billion) is given directly to companies. Past reserves are accumulated savings and wealth of the nation and hence of its citizens. If the reserve vault is to be opened, the direct benefits should be skewed for more to go to them instead of to companies. The $2.6 billion allocated represent only a modest increase over similar (such as GST refund, Workfare) 2008’s pre-recession and pre-hyperinflation help-budget. The stated justification for the huge allocation to companies is that individuals will be the beneficiaries of the help programs through jobs saved. The problem is the extent of leakages in this flow-down effect to individuals as huge number of jobs in aggregate is still projected to be lost despite these help programs.
2. Citizens are subject to various forms of means testing for programs such as the hospitalisation subsidies and share of workfare payouts. On the other hand the Job Credit program gives money from our reserves to all employers, regardless of whether they are financially strong or weak, big or small, earning big profits or suffering losses. If we citizens are subject to means testing, why is the govt. so generous without setting criteria to pre-qualify companies to be entitled to this particular. Banks, large property developers, large GLCs, most MNCs and govt ministries do not deserve nor need this financial subsidy to continue to be viable. Public reserves should not be used to enrich private enterprises, particularly the healthy ones. Mind you, these companies have logged in bonaza profits in the past years, and even if they will performance not as well in the near future, they will still make reasonable profits without Job Credit program.
Companies drawing on wage subsidies are not obligated to refrain from cutting jobs, cut pay or put employees on no-pay leave, if down-sizing is needed to ensure survival. So reserve money will drawn down and many workers will still get fired as the recession spreads and intensifies. If there is some form of means testing on companies, money saved can be used instead for another program to help individuals directly, say, for the retrenched whose jobs are not saved or the retired/aged with little income or have fixed income and are weighed down by the increased cost of living from last year’s inflation.
3. Even without the benefit of the Job Credit program for these healthy companies, the other numerous programs, taxes cuts/rebates and training subsidies/allowances, are still available to them and all other companies.
4. The bottom line is that although the help programs are declared to be ultimately to help the citizens by saving jobs, individuals will actually be getting the much shorter end of the $20.5 billion. More could also be done to help ease their cash-flow tightness, for example waiving or reducing GST on essential goods and services at least during these hard times or allow a small portion of a retrenched worker’s CPF savings to be withdrawn to tide him over while he seeks for new employment (by the way CPF is the worker’s own money and not even a subsidy).
That’s why I think this pro-company help-budget falls short of being BEST because it under-performs for the individuals.
Lim Swee Say as head of the workers movement must robustly champion the workers' interest within the tripartite. In what is supposed to be a rescue package ultimately for the benefit of workers and the people of Singapore, it turns out that companies turn out to be the main direct beneficiary getting the lion's share of the $20.5 billion help package. As sure as the sun rises, companies will still fold, workers will still lose jobs or suffer pay cuts. To these workers, the money which will go to the companies will have no benefit to them.
Not by any measure is he, as supposedly the workers' champion, justified to declare full satisfaction with the direct allocation to workers and to those who will be retrenched. Why didn't he tell the public that he had fought for a bigger direct share for the workers, even if he failed to get his bosses, oops I mean the other members of the tripartite, to change their minds.
Do you notice that with all the distractions of the recession and the help budget, the govt. has opportunistically sneaked in an increase of almost $1000 million to the security (defence and home affairs) budgets, bringing the Defence and Home Affairs Budgets to historical highs of over $11.4 billion and $3 billion respectively. This is one of the real reasons (quietly though) why our past reserves have to be used for this year's budget.
The Defence spendings tower above every other budgetary spendings. This, despite the gloomy outlook for the next 24 months or more. Money should be conserved (and channeled to fund more direct people-help programs, say, for retrenchment benefits). Some military spendings could surely be postponed or paced out until better days come back. It is not as though we are under-invested in defence. After years and decades of heavy military spendings, we have as of now already the most invested and equipped armed forces than the rest of ASEAN combined. That betrays the under-emphasis on real care and focus this govt has on people-related needs vs. growth and power.
The rating of “best” for this Budget is I think mainly based on the huge total amount of help programs. But if you look at the measurable benefits that will land in the hands of Singaporeans, then “best” is somewhat an overstatement. Let me say why:
1. The direct help for individuals & households amount to less than 13% ($2.6 billion) of the total. 66% ($13.5 billion) is given directly to companies. Past reserves are accumulated savings and wealth of the nation and hence of its citizens. If the reserve vault is to be opened, the direct benefits should be skewed for more to go to them instead of to companies. The $2.6 billion allocated represent only a modest increase over similar (such as GST refund, Workfare) 2008’s pre-recession and pre-hyperinflation help-budget. The stated justification for the huge allocation to companies is that individuals will be the beneficiaries of the help programs through jobs saved. The problem is the extent of leakages in this flow-down effect to individuals as huge number of jobs in aggregate is still projected to be lost despite these help programs.
2. Citizens are subject to various forms of means testing for programs such as the hospitalisation subsidies and share of workfare payouts. On the other hand the Job Credit program gives money from our reserves to all employers, regardless of whether they are financially strong or weak, big or small, earning big profits or suffering losses. If we citizens are subject to means testing, why is the govt. so generous without setting criteria to pre-qualify companies to be entitled to this particular. Banks, large property developers, large GLCs, most MNCs and govt ministries do not deserve nor need this financial subsidy to continue to be viable. Public reserves should not be used to enrich private enterprises, particularly the healthy ones. Mind you, these companies have logged in bonaza profits in the past years, and even if they will performance not as well in the near future, they will still make reasonable profits without Job Credit program.
Companies drawing on wage subsidies are not obligated to refrain from cutting jobs, cut pay or put employees on no-pay leave, if down-sizing is needed to ensure survival. So reserve money will drawn down and many workers will still get fired as the recession spreads and intensifies. If there is some form of means testing on companies, money saved can be used instead for another program to help individuals directly, say, for the retrenched whose jobs are not saved or the retired/aged with little income or have fixed income and are weighed down by the increased cost of living from last year’s inflation.
3. Even without the benefit of the Job Credit program for these healthy companies, the other numerous programs, taxes cuts/rebates and training subsidies/allowances, are still available to them and all other companies.
4. The bottom line is that although the help programs are declared to be ultimately to help the citizens by saving jobs, individuals will actually be getting the much shorter end of the $20.5 billion. More could also be done to help ease their cash-flow tightness, for example waiving or reducing GST on essential goods and services at least during these hard times or allow a small portion of a retrenched worker’s CPF savings to be withdrawn to tide him over while he seeks for new employment (by the way CPF is the worker’s own money and not even a subsidy).
That’s why I think this pro-company help-budget falls short of being BEST because it under-performs for the individuals.
Letter from the grave
Read this letter from an assassinated journalist
People often ask me why I take such risks and tell me it is a matter of time before I am bumped off. Of course I know that: it is inevitable. But if we do not speak out now, there will be no one left to speak for those who cannot, whether they be ethnic minorities, the disadvantaged or the persecuted.
An example that has inspired me throughout my career in journalism has been that of the German theologian, Martin Niemoller. In his youth he was an anti-Semite and an admirer of Hitler. As Nazism took hold in Germany, however, he saw Nazism for what it was: it was not just the Jews Hitler sought to extirpate, it was just about anyone with an alternate point of view.
Niemoller spoke out, and for his trouble was incarcerated in the Sachsenhausen and Dachau concentration camps from 1937 to 1945, and very nearly executed. While incarcerated, Niemoller wrote a poem that, from the first time I read it in my teenage years, stuck hauntingly in my mind:
First they came for the Jews
and I did not speak out because I was not a Jew.
Then they came for the Communists
and I did not speak out because I was not a Communist.
Then they came for the trade unionists
and I did not speak out because I was not a trade unionist.
Then they came for me
and there was no one left to speak out for me.
First they came for the Jews
and I did not speak out because I was not a Jew.
Then they came for the Communists
and I did not speak out because I was not a Communist.
Then they came for the trade unionists
and I did not speak out because I was not a trade unionist.
Then they came for me
and there was no one left to speak out for me.
DBS CEO has cancer
Jan 29, 2009
SINGAPORE'S DBS Group , Southeast Asia's biggest bank, said on Thursday that Chief Executive Richard Stanley, who was hired in May last year, is suffering from leukemia. Koh Boon Hwee, the bank's chairman, will take charge of the bank during Stanley's three to six months' absence for medical treatment, the bank said in a statement.
DBS shares were suspended from trading on Thursday morning before the announcement and resumed trade around 11.30am. By 11.35am, DBS shares were down 0.8 per cent at $5.17, underperforming a decline of 0.3 per cent in the benchmark Straits Times Index .
Mr Stanley, 48, was hired last year from Citigroup with an aim to expand the bank's reach beyond its two core markets, Singapore and Hong Kong.
The bank said Mr Stanley has been diagnosed with 'acute myelogenous leukemia' and has started undergoing medical treatment in Singapore.
A surgeon at a Singapore hospital, who declined to be named because he is not authorised to speak to the media, told Reuters that acute myelogenous leukemia is a fast-spreading cancer of the blood that requires immediate chemotherapy and a bone marrow transplant at a later date.
Analysts said the bank's strategy would not change during Stanley's absence because DBS was in defensive posture amid a global economic downturn.
'If he is out of action, then the critical decisions will be delayed until his situation stabilises or DBS finds an alternative,' said David Lum, an analyst at Daiwa Institute of Research.
The bank said Mr Stanley sought treatment for what appeared to be ordinary flu-like symptoms on Monday after experiencing a cough and high fever during the Lunar New Year weekend.
He was hospitalised the following day and his medical condition was confirmed this morning, the bank said, adding that Mr Stanley's illness is treatable.
DBS reports its fourth-quarter results on Feb 13. -- THOMSON REUTERS
SINGAPORE'S DBS Group , Southeast Asia's biggest bank, said on Thursday that Chief Executive Richard Stanley, who was hired in May last year, is suffering from leukemia. Koh Boon Hwee, the bank's chairman, will take charge of the bank during Stanley's three to six months' absence for medical treatment, the bank said in a statement.
DBS shares were suspended from trading on Thursday morning before the announcement and resumed trade around 11.30am. By 11.35am, DBS shares were down 0.8 per cent at $5.17, underperforming a decline of 0.3 per cent in the benchmark Straits Times Index .
Mr Stanley, 48, was hired last year from Citigroup with an aim to expand the bank's reach beyond its two core markets, Singapore and Hong Kong.
The bank said Mr Stanley has been diagnosed with 'acute myelogenous leukemia' and has started undergoing medical treatment in Singapore.
A surgeon at a Singapore hospital, who declined to be named because he is not authorised to speak to the media, told Reuters that acute myelogenous leukemia is a fast-spreading cancer of the blood that requires immediate chemotherapy and a bone marrow transplant at a later date.
Analysts said the bank's strategy would not change during Stanley's absence because DBS was in defensive posture amid a global economic downturn.
'If he is out of action, then the critical decisions will be delayed until his situation stabilises or DBS finds an alternative,' said David Lum, an analyst at Daiwa Institute of Research.
The bank said Mr Stanley sought treatment for what appeared to be ordinary flu-like symptoms on Monday after experiencing a cough and high fever during the Lunar New Year weekend.
He was hospitalised the following day and his medical condition was confirmed this morning, the bank said, adding that Mr Stanley's illness is treatable.
DBS reports its fourth-quarter results on Feb 13. -- THOMSON REUTERS
A voice from the generation of the 40s/50s
Dear Kin Lian,
I am inspired by your exemplary mission to help redress injustice and rectify wrong public policies that are detrimental to nation building and also oppressive to the poor and average Singaporeans.
I appeal to you to raise awareness of the pride of aged Singaporeans who have toiled thick and thin with the PAP to build Singapore over the last 50 years. Now these senior citizens are left with little welfare from the state which they had sacrificed so much to help build Singapore to a first world economy. Instead they were told to work as long as they can, not because they like to, but because they have to bring in extra income to support a decent "golden" lifestyle. They are so afraid to fall sick because hospitalization and wipe out their hard earned savings and put extra burden on their struggling children.
I am living in Australia and I am a retiree at 62. I observe how seniors are being looked after by the government here. They enjoyed adequate basic welfare and excellent aged care support, especially for those who are disabled and sick.
Citizens who served in the Australian military received special treatment when they retired. They enjoyed pension, medical care and recreational facilities.
The argument that we are not a welfare state is an excuse. This is NOT about lavish welfare spending to make people laid back. This is about a nation and a society that values GRATITUDE, paying back to the senior citizens and NS personnel who have sacrificed so much to help build the nation so that Ministers can afford to be paid million dollar salaries.
What do NS personnel receive when they grow old after giving their best 20-25 years after enlistment? Struggling to raise a humble family, they have to worry when they grow old and if they are unfortunate to be struck down by illness. Where is the motivation for National Service when the State does not look after them when they become old, sick and frail?
I hope you can devote a little of your time to raise awareness of the political elite to come to term with the type of society we really want to nurture. Where would our younger generation learn the value of GRATITUDE when the government's role model is just meritocracy, survival for the fittest and the ruthless pursuit of economic success. Can we not be 1st in everything and be first in a gracious and caring society?
TS (Teck Suan) Low
NSW
Australia
I am inspired by your exemplary mission to help redress injustice and rectify wrong public policies that are detrimental to nation building and also oppressive to the poor and average Singaporeans.
I appeal to you to raise awareness of the pride of aged Singaporeans who have toiled thick and thin with the PAP to build Singapore over the last 50 years. Now these senior citizens are left with little welfare from the state which they had sacrificed so much to help build Singapore to a first world economy. Instead they were told to work as long as they can, not because they like to, but because they have to bring in extra income to support a decent "golden" lifestyle. They are so afraid to fall sick because hospitalization and wipe out their hard earned savings and put extra burden on their struggling children.
I am living in Australia and I am a retiree at 62. I observe how seniors are being looked after by the government here. They enjoyed adequate basic welfare and excellent aged care support, especially for those who are disabled and sick.
Citizens who served in the Australian military received special treatment when they retired. They enjoyed pension, medical care and recreational facilities.
The argument that we are not a welfare state is an excuse. This is NOT about lavish welfare spending to make people laid back. This is about a nation and a society that values GRATITUDE, paying back to the senior citizens and NS personnel who have sacrificed so much to help build the nation so that Ministers can afford to be paid million dollar salaries.
What do NS personnel receive when they grow old after giving their best 20-25 years after enlistment? Struggling to raise a humble family, they have to worry when they grow old and if they are unfortunate to be struck down by illness. Where is the motivation for National Service when the State does not look after them when they become old, sick and frail?
I hope you can devote a little of your time to raise awareness of the political elite to come to term with the type of society we really want to nurture. Where would our younger generation learn the value of GRATITUDE when the government's role model is just meritocracy, survival for the fittest and the ruthless pursuit of economic success. Can we not be 1st in everything and be first in a gracious and caring society?
TS (Teck Suan) Low
NSW
Australia
Wednesday, January 28, 2009
Spanish bank offers full compensation to its clients
Perhaps our financial institutions should consider this Spanish Bank's gesture to their valued clients?
"Wednesday, 28 January 2009 12:03
Spain's largest bank, Santander, is to offer full compensation worth more than US$1.8 billion (€1.4 billion) to clients who lost money in an investment fraud allegedly run by the US financier Bernard Madoff. The compensation scheme covers only private individual clients.
'The group has taken this decision given the exceptional circumstances surrounding this case and based exclusively on commercial reasons, given the interest it has in maintaining its business relationship with these clients,' the bank said in a statement.' "
A BBC financial commentator said he was not surprised since the bank's reputation and relationship with client should be worth more than the US$1.8 billion. He expected other banks to follow suit or they will lose their valued clients to Santander.
"Wednesday, 28 January 2009 12:03
Spain's largest bank, Santander, is to offer full compensation worth more than US$1.8 billion (€1.4 billion) to clients who lost money in an investment fraud allegedly run by the US financier Bernard Madoff. The compensation scheme covers only private individual clients.
'The group has taken this decision given the exceptional circumstances surrounding this case and based exclusively on commercial reasons, given the interest it has in maintaining its business relationship with these clients,' the bank said in a statement.' "
A BBC financial commentator said he was not surprised since the bank's reputation and relationship with client should be worth more than the US$1.8 billion. He expected other banks to follow suit or they will lose their valued clients to Santander.
Tuesday, January 27, 2009
Intelligence Quiz
Download
The famous scientist, Albert Einstein, was reported to have created a puzzle involving 5 houses in different colours, occupied by five different nationalities, drinking different beverages, keeping different pets and smoking different brands of tobacco.
Easy (4 houses, 9 clues)
Moderate (5 houses, 15 clues)
Difficult (6 houses, 20 clues)
The answers are shown in the last page. You can learn the technique to solve the quiz in my book. It is also available here: http://www.tankinlian.com/quiz/index.html
If you wish to order 5 copies of more of the book at a special price of $5 per book, you can send your order to kinlian@gmail.com. Postage is free for delivery within
I am able to print a customised version of the puzzles for corporations wishing to provide this book of puzzles to their clients. It can feature the products of the corporation.
Tan Kin Lian
Unjustified Jump in Food Prices during Chinese New Year Season
Dear Mr Tan,
I hope you can post the below link on your blog.
I tried surfing CASE website but then it seems quite troublesome for an individual to lodge a complaint.
I perhaps need some guidance or education on the process.
Loh Hon Chun
I hope you can post the below link on your blog.
I tried surfing CASE website but then it seems quite troublesome for an individual to lodge a complaint.
I perhaps need some guidance or education on the process.
Loh Hon Chun
Saturday, January 24, 2009
2009 - the year of the Bull
In 1985, when Singapore was in a recession, I presented a bull sculpture to Mr. Lee Hsien Loong, who was then the Minister of State for Trade & Industry. I said "I hope that the bull will revive the stockmarket and the economy. " It did!
2009 is the year of the Bull. I hope that someone will send another bull sculpture to the Prime Minister.
SCMP:Sun Hung Kai Financial may lose 'caring' award over minibond saga
24 Jan 2009
Ambrose Leung
Sun Hung Kai Financial may be the first of several financial institutions to lose an award that honours their corporate social responsibility as a result of their involvement in the minibonds saga.
The Council of Social Service, which confers the annual Caring Company awards, is reviewing its decision to give the award to Sun Hung Kai, after its subsidiary Sun Hung Kai Investment Services was reprimanded by the Securities and Futures Commission for the way it sold the high-risk derivatives to customers.
Sun Hung Kai and more than a dozen banks accused of misleading vulnerable investors are understood to be among the winners who will be unveiled and honoured next month.
Cliff Choi Kim-wah, business director of the council, said the vetting committee would meet soon.
“Those being awarded know well that we reserve the right to strip them of their titles,” he said. A spokesman for Sun Hung Kai Financial declined to comment.
Christine Fang Meng-sang, chief executive of the council, said it was prepared to withdraw the honours if the banks were officially censured by relevant authorities, or if they were found to have committed criminal offences.
“We have received e-mails from some minibonds victims who were unhappy with the banks getting the award,” she said.
Any wrongdoing by the banks, however, could not wipe out the charitable work that they had done, she noted.
“ We can’t strike them off the award list just because people are protesting outside their branches. But we are prepared to review their awards if any of them is found by the authorities to have done wrong,” Ms Fang said.
The council will give out more than 1,700 awards this year to businesses and public organisations for demonstrating good corporate citizenship and their contributions in community work.
Among the 60-plus banks that were honoured last year, more than a dozen – including the Bank of China, DBS Bank and the Bank of East Asia – now face thousands of angry investors who are seeking compensation for their losses after the collapse of Lehman Brothers, which had issued or guaranteed the minibonds they bought.
Investors, some of them elderly, claimed the banks had lied about the investment risks when persuading them to buy the highly complex products. Many of them have filed complaints with the Monetary Authority, made police reports or resorted to the courts to seek redress.
Since the scheme was launched seven years ago, only one company has had its award withdrawn. No company with a criminal record or which has been officially censured by astatutory body in the previous three years can receive an award.
Lawmakers who are helping the minibond investors seek redress were outraged. Democrat Kam Naiwai said the council should rethink its awards plan.
“ How can these banks be so shameless and still have the guts to brandish the ‘caring company’ tag after conning old people into buying their poisoned minibonds?”
Audrey Eu Yuet-mee, leader of the Civic Party, said: “It is so ironic that the basics of a caring company, which is to care for the customers, are not reflected in the awards, while it recognises contributions to the environment and donations to charities.”
The Bank of China, Bank of East Asia and DBS all said their awards this year had nothing to do with the minibonds saga.
Ambrose Leung
Sun Hung Kai Financial may be the first of several financial institutions to lose an award that honours their corporate social responsibility as a result of their involvement in the minibonds saga.
The Council of Social Service, which confers the annual Caring Company awards, is reviewing its decision to give the award to Sun Hung Kai, after its subsidiary Sun Hung Kai Investment Services was reprimanded by the Securities and Futures Commission for the way it sold the high-risk derivatives to customers.
Sun Hung Kai and more than a dozen banks accused of misleading vulnerable investors are understood to be among the winners who will be unveiled and honoured next month.
Cliff Choi Kim-wah, business director of the council, said the vetting committee would meet soon.
“Those being awarded know well that we reserve the right to strip them of their titles,” he said. A spokesman for Sun Hung Kai Financial declined to comment.
Christine Fang Meng-sang, chief executive of the council, said it was prepared to withdraw the honours if the banks were officially censured by relevant authorities, or if they were found to have committed criminal offences.
“We have received e-mails from some minibonds victims who were unhappy with the banks getting the award,” she said.
Any wrongdoing by the banks, however, could not wipe out the charitable work that they had done, she noted.
“ We can’t strike them off the award list just because people are protesting outside their branches. But we are prepared to review their awards if any of them is found by the authorities to have done wrong,” Ms Fang said.
The council will give out more than 1,700 awards this year to businesses and public organisations for demonstrating good corporate citizenship and their contributions in community work.
Among the 60-plus banks that were honoured last year, more than a dozen – including the Bank of China, DBS Bank and the Bank of East Asia – now face thousands of angry investors who are seeking compensation for their losses after the collapse of Lehman Brothers, which had issued or guaranteed the minibonds they bought.
Investors, some of them elderly, claimed the banks had lied about the investment risks when persuading them to buy the highly complex products. Many of them have filed complaints with the Monetary Authority, made police reports or resorted to the courts to seek redress.
Since the scheme was launched seven years ago, only one company has had its award withdrawn. No company with a criminal record or which has been officially censured by astatutory body in the previous three years can receive an award.
Lawmakers who are helping the minibond investors seek redress were outraged. Democrat Kam Naiwai said the council should rethink its awards plan.
“ How can these banks be so shameless and still have the guts to brandish the ‘caring company’ tag after conning old people into buying their poisoned minibonds?”
Audrey Eu Yuet-mee, leader of the Civic Party, said: “It is so ironic that the basics of a caring company, which is to care for the customers, are not reflected in the awards, while it recognises contributions to the environment and donations to charities.”
The Bank of China, Bank of East Asia and DBS all said their awards this year had nothing to do with the minibonds saga.
Friday, January 23, 2009
SCMP:Boost investor security without stifling market
24 Jan 2009
It may be premature for most people who face losses on investments in Lehman Brothers minibonds to celebrate a victory for the small handful who have got all their money back. But any breakthrough in the saga over alleged mis-selling of the products as low-risk is welcome news for them. Aggrieved investors could not ask for more than full compensation. The HK$85 million voluntary settlement agreed by Sun Hung Kai
Investment Services for some 300 investors puts pressure on the 21 banks and two other brokerages involved in the sale of the minibonds in Hong Kong. The outcome in this case appears to vindicate the Securities and Futures Commission’s top-down approach of investigating the way institutions sold the minibonds, rather than a protracted case-by-case examination of complaints. Any adverse conclusions about an institution’s conduct can then cover all its affected clients.
Sources said the investment company apparently came forward with the settlement offer, although it has denied any liability or wrongdoing. The company obviously believes it is better to put the matter behind it quickly by settling with its clients than face the prospect of drawn out legal proceedings and the possible loss of its trading licence. In any case, its decision is commendable, as it saves its clients from further anguish and, above all, financial losses. But the real significance of the settlement is to be found in the reasons for a reprimand issued by the SFC over concerns about the way the broker sold the minibonds.
Despite their name, they were not corporate bonds but complex credit-linked instruments. The SFC was concerned about the adequacy of the company’s due diligence, training of sales staff, risk assessment, and record-keeping in relation to the minibonds. The company agreed the concerns were serious.
One question now is whether such shortcomings were prevalent at other institutions that sold the minibonds, mostly banks. It seems unlikely that the SFC’s investigations will find that this is an isolated case.
Another question is whether institutions whose clients make up a higher proportion of the 47,000 investors in HK$15.7 billion of minibonds will be as willing to settle their losses in full.
The SFC does not have the power to impose a settlement. But by publishing the results of its investigations, it does have the power to exercise some moral persuasion. If other institutions find that the concerns in this case have some application to them, they may conclude that the example of Sun Hung Kai is a better way to conclude the affair than dragging it out. It is significant that in announcing the settlement, the SFC dodged the issue of whether claims of mis-selling of the minibonds as low-risk investment products have been substantiated, and Sun Hung Kai admitted no liability or wrongdoing. The terms of the settlement sets a rather appealing precedent for other institutions that are eager to put the matter behind them quickly. Every situation is different, however, so the terms of any settlement could depend on the extent and seriousness of any misconduct. Whatever the terms for each case may be, it is important, and only fair, that even where banks reach settlements with their clients, the SFC will still insist on disclosure of any concerns arising from its investigations.
The financial secretary has called for a review of regulations after receiving reports on the minibond affair from the SFC and the Hong Kong Monetary Authority, which regulates banks. For the sake of confidence in our financial system, the government must move swiftly to enhance investor protection without stifling a free market.
It may be premature for most people who face losses on investments in Lehman Brothers minibonds to celebrate a victory for the small handful who have got all their money back. But any breakthrough in the saga over alleged mis-selling of the products as low-risk is welcome news for them. Aggrieved investors could not ask for more than full compensation. The HK$85 million voluntary settlement agreed by Sun Hung Kai
Investment Services for some 300 investors puts pressure on the 21 banks and two other brokerages involved in the sale of the minibonds in Hong Kong. The outcome in this case appears to vindicate the Securities and Futures Commission’s top-down approach of investigating the way institutions sold the minibonds, rather than a protracted case-by-case examination of complaints. Any adverse conclusions about an institution’s conduct can then cover all its affected clients.
Sources said the investment company apparently came forward with the settlement offer, although it has denied any liability or wrongdoing. The company obviously believes it is better to put the matter behind it quickly by settling with its clients than face the prospect of drawn out legal proceedings and the possible loss of its trading licence. In any case, its decision is commendable, as it saves its clients from further anguish and, above all, financial losses. But the real significance of the settlement is to be found in the reasons for a reprimand issued by the SFC over concerns about the way the broker sold the minibonds.
Despite their name, they were not corporate bonds but complex credit-linked instruments. The SFC was concerned about the adequacy of the company’s due diligence, training of sales staff, risk assessment, and record-keeping in relation to the minibonds. The company agreed the concerns were serious.
One question now is whether such shortcomings were prevalent at other institutions that sold the minibonds, mostly banks. It seems unlikely that the SFC’s investigations will find that this is an isolated case.
Another question is whether institutions whose clients make up a higher proportion of the 47,000 investors in HK$15.7 billion of minibonds will be as willing to settle their losses in full.
The SFC does not have the power to impose a settlement. But by publishing the results of its investigations, it does have the power to exercise some moral persuasion. If other institutions find that the concerns in this case have some application to them, they may conclude that the example of Sun Hung Kai is a better way to conclude the affair than dragging it out. It is significant that in announcing the settlement, the SFC dodged the issue of whether claims of mis-selling of the minibonds as low-risk investment products have been substantiated, and Sun Hung Kai admitted no liability or wrongdoing. The terms of the settlement sets a rather appealing precedent for other institutions that are eager to put the matter behind them quickly. Every situation is different, however, so the terms of any settlement could depend on the extent and seriousness of any misconduct. Whatever the terms for each case may be, it is important, and only fair, that even where banks reach settlements with their clients, the SFC will still insist on disclosure of any concerns arising from its investigations.
The financial secretary has called for a review of regulations after receiving reports on the minibond affair from the SFC and the Hong Kong Monetary Authority, which regulates banks. For the sake of confidence in our financial system, the government must move swiftly to enhance investor protection without stifling a free market.
SCMP:Minibond deal raises pressure for more refunds
24 Jan 2009
Joyce Man Additional reporting by Maria Chan, Enoch Yiu and Albert Wong. Source.
More institutions and banks were likely to consider compensating minibond investors after Sun Hung Kai Financial announced it would offer full refunds, a knowledgeable source said yesterday. But the source said they would each propose a deal on their own terms.
“ I think they will see what has happened with Sun Hung Kai and realise it’s a quick, better way to put this behind them,” said the source, who did not want to be named.
Sun Hung Kai Financial, parent company of Sun Hung Kai Investment Services – which sold minibonds linked to Lehman Brothers, the US investment bank that collapsed in September – announced on Thursday it would buy back minibonds from 310 customers for about HK$85 million.
At the same time, the Securities and Futures Commission raised concerns about Sun Hung Kai Investment Services’ due diligence, salesstaff training, risk assessment and record-keeping on minibonds. Minibonds are not corporate bonds but consist of high-risk credit-linked derivatives, marketed as a proxy investment in well-known firms.
Asked whether other banks might respond with compensation of 70, 80 or 90 per cent of original investments, the source said that would “depend on how serious [the commission’s] concerns are about the conduct”.
But the commission had no authority to force this on them, the source said. A spokeswoman for the Monetary Authority, which regulates banks, also said it could not do so.
The source said the deal on Thursday proved the efficacy of a top-down approach, under which the commission investigated whole institutions, not individual complaints.
Secretary for Financial Services and the Treasury Chan Ka-keung said Sung Hung Kai Financial’s repurchase offer proved the commission’s investigation was effective in protecting investors’ interests. He would not say if he thought other banks would be pressured into following suit, only that he believed the commission and the Monetary Authority would be fair in their investigations.
A banker who asked not to be named said the settlement would put pressure on banks as investors would have high expectations. However, the banker said the top-down approach the SFC used had its drawback as banks would have to compensate all customers if the SFC found they had systematic problems in selling investment products.
“It’s unfair if we have to pay for all customers unless the systematic problem is very big,” the banker said, adding that it was hard to judge how big the problem would need to be to warrant compensating all customers.
Another banker expected there would be more pressure for banks to reach a similar agreement with the SFC. But he believed few would strike deals.
“It is not because the amounts of minibonds sold by banks are bigger; the major reason is that it’s unreasonable. We only compensate customers if we are wrong.”
Investors poured HK$15.7 billion into Lehman Brothers derivatives.
However, Kenny Lee Yiu-sun, chairman of the Hong Kong Stockbrokers Association, said the buyback offer had set a very good example. “Banks should also refund investors in full if they are found to have made similar mistakes.”
Peter Chan Kwong-yue, chairman of the Allied Victims of Lehman Products, said the number of clients who bought minibonds from Sun Hung Kai Investment Services and the sum they invested were relatively small, so the repurchase deal was not totally suitable for larger banks.
Democratic Party lawmaker Kam Nai-wai said the refund would set a good precedent. “ I can’t see how other banks and institutions … with similar structural deficiencies will be able to evade responsibility.”
Those eligible for the repurchase deal will receive details in the post in the first week of February.
KPMG, provisional liquidators of eight Lehman Brothers firms in Hong Kong, will begin meeting creditors on February 11.
Financials fall after buy-back offer.
Joyce Man Additional reporting by Maria Chan, Enoch Yiu and Albert Wong. Source.
More institutions and banks were likely to consider compensating minibond investors after Sun Hung Kai Financial announced it would offer full refunds, a knowledgeable source said yesterday. But the source said they would each propose a deal on their own terms.
“ I think they will see what has happened with Sun Hung Kai and realise it’s a quick, better way to put this behind them,” said the source, who did not want to be named.
Sun Hung Kai Financial, parent company of Sun Hung Kai Investment Services – which sold minibonds linked to Lehman Brothers, the US investment bank that collapsed in September – announced on Thursday it would buy back minibonds from 310 customers for about HK$85 million.
At the same time, the Securities and Futures Commission raised concerns about Sun Hung Kai Investment Services’ due diligence, salesstaff training, risk assessment and record-keeping on minibonds. Minibonds are not corporate bonds but consist of high-risk credit-linked derivatives, marketed as a proxy investment in well-known firms.
Asked whether other banks might respond with compensation of 70, 80 or 90 per cent of original investments, the source said that would “depend on how serious [the commission’s] concerns are about the conduct”.
But the commission had no authority to force this on them, the source said. A spokeswoman for the Monetary Authority, which regulates banks, also said it could not do so.
The source said the deal on Thursday proved the efficacy of a top-down approach, under which the commission investigated whole institutions, not individual complaints.
Secretary for Financial Services and the Treasury Chan Ka-keung said Sung Hung Kai Financial’s repurchase offer proved the commission’s investigation was effective in protecting investors’ interests. He would not say if he thought other banks would be pressured into following suit, only that he believed the commission and the Monetary Authority would be fair in their investigations.
A banker who asked not to be named said the settlement would put pressure on banks as investors would have high expectations. However, the banker said the top-down approach the SFC used had its drawback as banks would have to compensate all customers if the SFC found they had systematic problems in selling investment products.
“It’s unfair if we have to pay for all customers unless the systematic problem is very big,” the banker said, adding that it was hard to judge how big the problem would need to be to warrant compensating all customers.
Another banker expected there would be more pressure for banks to reach a similar agreement with the SFC. But he believed few would strike deals.
“It is not because the amounts of minibonds sold by banks are bigger; the major reason is that it’s unreasonable. We only compensate customers if we are wrong.”
Investors poured HK$15.7 billion into Lehman Brothers derivatives.
However, Kenny Lee Yiu-sun, chairman of the Hong Kong Stockbrokers Association, said the buyback offer had set a very good example. “Banks should also refund investors in full if they are found to have made similar mistakes.”
Peter Chan Kwong-yue, chairman of the Allied Victims of Lehman Products, said the number of clients who bought minibonds from Sun Hung Kai Investment Services and the sum they invested were relatively small, so the repurchase deal was not totally suitable for larger banks.
Democratic Party lawmaker Kam Nai-wai said the refund would set a good precedent. “ I can’t see how other banks and institutions … with similar structural deficiencies will be able to evade responsibility.”
Those eligible for the repurchase deal will receive details in the post in the first week of February.
KPMG, provisional liquidators of eight Lehman Brothers firms in Hong Kong, will begin meeting creditors on February 11.
Financials fall after buy-back offer.
HK brokerage agrees to refund minibond buyers
By Tom Mitchell in Hong Kong
Published: January 23 2009 04:22 | Last updated: January 23 2009 04:22
A Hong Kong brokerage has agreed to refund retail investors in full for their losses on so-called “Lehman Brothers Minibonds”, in a settlement that will set a worrying precedent for other financial institutions in the territory that have sold about $2bn worth of the controversial investment products.
In a deal reached with Hong Kong’s market regulator, the Securities and Futures Commission, Sun Hung Kai Investment Services agreed to refund $11m to more than 300 buyers of the minibonds, which are in fact complex derivative instruments linked to the now defunct US investment bank.
The agreement goes beyond calls by the Hong Kong government last year for banks to repurchase the instruments at their “market value”. Instead, Sun Hung Kai will repay investors their entire principal. Twenty-four banks and brokerages, led by Bank of China’s Hong Kong branch, sold Lehman Brothers minibonds with an estimated face value of $2bn to more than 40,000 investors.
“We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors,” Martin Wheatley, SFC chief executive, said in a statement.
The controversy surrounding the mini-bonds has sparked a political firestorm in Hong Kong, with burned investors descending regularly on bank offices, SFC headquarters and the territory’s legislature. Many have lost their life savings and claim that the risky minibonds were mis-sold by bank and brokerage staff.
While Sun Hung Kai did not admit to any wrongdoing in its settlement with the SFC, the brokerage acknowledged concerns raised by the regulator including inadequate due diligence, training of sales staff and record keeping.
“We achieved an outcome which we believe represents the best possible solution for our minibond customers,” Lee Seng-huang, Sun Hung Kai executive chairman, said. “We understand it has not been an easy time for all concerned, but we believe that this voluntary initiative will bring closure to our affected customers, particularly in light of this challenging economic environment.”
The Hong Kong Monetary Authority, the territory’s bank regulator, has received about 20,000 complaints related to the sale of minibonds. As of January 15 the authority had formally opened more than 4,500 investigations and referred 251 cases to the SFC for possible enforcement action.
Hong Kong’s politicians have also leapt into the fray, working with the protesters and forming a special legislative subcommittee to look into the controversy.
Published: January 23 2009 04:22 | Last updated: January 23 2009 04:22
A Hong Kong brokerage has agreed to refund retail investors in full for their losses on so-called “Lehman Brothers Minibonds”, in a settlement that will set a worrying precedent for other financial institutions in the territory that have sold about $2bn worth of the controversial investment products.
In a deal reached with Hong Kong’s market regulator, the Securities and Futures Commission, Sun Hung Kai Investment Services agreed to refund $11m to more than 300 buyers of the minibonds, which are in fact complex derivative instruments linked to the now defunct US investment bank.
The agreement goes beyond calls by the Hong Kong government last year for banks to repurchase the instruments at their “market value”. Instead, Sun Hung Kai will repay investors their entire principal. Twenty-four banks and brokerages, led by Bank of China’s Hong Kong branch, sold Lehman Brothers minibonds with an estimated face value of $2bn to more than 40,000 investors.
“We are very pleased with the outcome that has been achieved and we believe the approach adopted has produced a result which is in the best interests of the investors,” Martin Wheatley, SFC chief executive, said in a statement.
The controversy surrounding the mini-bonds has sparked a political firestorm in Hong Kong, with burned investors descending regularly on bank offices, SFC headquarters and the territory’s legislature. Many have lost their life savings and claim that the risky minibonds were mis-sold by bank and brokerage staff.
While Sun Hung Kai did not admit to any wrongdoing in its settlement with the SFC, the brokerage acknowledged concerns raised by the regulator including inadequate due diligence, training of sales staff and record keeping.
“We achieved an outcome which we believe represents the best possible solution for our minibond customers,” Lee Seng-huang, Sun Hung Kai executive chairman, said. “We understand it has not been an easy time for all concerned, but we believe that this voluntary initiative will bring closure to our affected customers, particularly in light of this challenging economic environment.”
The Hong Kong Monetary Authority, the territory’s bank regulator, has received about 20,000 complaints related to the sale of minibonds. As of January 15 the authority had formally opened more than 4,500 investigations and referred 251 cases to the SFC for possible enforcement action.
Hong Kong’s politicians have also leapt into the fray, working with the protesters and forming a special legislative subcommittee to look into the controversy.
Thursday, January 22, 2009
Comparing US Departments with Singapore Ministries
Here is a comparison of the US departments with the Singapore ministries.
The US has a Department of Justice which is similar to our Ministry of Law. Perhaps, there is a difference in emphasis?
Obama Whistle Stop Tour
Watch this short video.
It is truly inspirational ... what a Government should be.
Wednesday, January 21, 2009
Make a donation from your 100% compensation
In America, some lawyers are willing to take a case on a contingency fee. If they win the case, they receive 10% to 30% of the amount recovered. If they lose the case, the client only pay the expenses.
Some noteholders are interested to engage lawyers on a contingency fee to recover their money. But contingency fee is not allowed in Singapore.
Think again. Many volunteers have spent several hundred hours of time and their expertise to help the noteholders to recover their money, without any promise of payment. As a result of their work, 1,280 of the noteholders will be getting back 100% compensation.
I like to ask these noteholders to consider giving a donation, if you have directly benefit from the work of any specific volunteer. This is just a small donation (far smaller than the contingency fee expected by the lawyer). It is for the volunteer to decide if they wish to accept it. Some of the volunteers are able to spend the time because they are not working. They do need an income.
If you wish to make a general donation of say 5%, I will put the money in the legal fund to engage a senior counsel or queens counsel to give a legal opinion to help the other noteholders. If there is any balance in the legal fund, I will contribute it to the financial services consumer association (FISCA) that will be establised to provide financial education to the public.
If you wish to make a contribution to the legal fund or any volunteer, you can contact me at kinlian@gmail.com. I will appoint someone to manage the accounts. Be generous. Remember - you could be one of the noteholders who has been rejected or have been offered inadequate compensation.
Honesty and fair play
My friend told me this story. A businessmen and a Government official were very happy. They have found a way to make a few million dollars for the businessman to import of rice into the country through a licence given by the official and to share the illegal profit in an overseas bank account.
My friend said that the illegal profit will have to be borne by the poor people who have to pay a higher price for the rice. He is sad that people can be so happy to make profit from the suffering of the poor people.
My friend said that the illegal profit will have to be borne by the poor people who have to pay a higher price for the rice. He is sad that people can be so happy to make profit from the suffering of the poor people.
This does not refer to Singapore.
Obama: the price and promise of citizenship
For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.
Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.
This is the price and the promise of citizenship.
Focus on the complaint case
Dear Mr. Tan,
There is something that disturbs me tremendously. I read your blog post that talked about some of the factors that affect the final decision of the FIs on the investors complaints. I empathize with many of the investors whom I believe have been most sadly given inadequate and inaccurate information and advice by the relevant FIs and their staff, which led to them buying the structured products, in particular Minibond and Pinnacle Notes and suffering loss and distress in the process.
I have received news that there are endless delays and repeated changes in the timeline given to clients who have lodged complaints with the FIs. All too often, investors have received a letter in the mail, hoping that it communicates the FIs compensation decision, only to be notified that the FI is still reviewing their case and will reply soon. 'Soon' can mean a couple of months.
In the questionnaires that the FIs are asking investors during the complaint interview, many investors have been quizzed on their education level, past investment experience, source of funds and the amount of savings they have. Many of such questions have no actual connection to their complaint on mis-selling and make no sense at all.
In the questionnaires that the FIs are asking investors during the complaint interview, many investors have been quizzed on their education level, past investment experience, source of funds and the amount of savings they have. Many of such questions have no actual connection to their complaint on mis-selling and make no sense at all.
I have also heard news that some FIs are investigating into the wealth and property held by the investors, which once again is totally senseless and only serves to terribly delay the reviewing process.
I hope that the FIs can focus on the facts of the investors' complaint case and offer a swift and fair reply to investors, cutting short their torment over their failed investment products, rather than dig into the investors private information on their finances and assets.
Anonymous
I hope that the FIs can focus on the facts of the investors' complaint case and offer a swift and fair reply to investors, cutting short their torment over their failed investment products, rather than dig into the investors private information on their finances and assets.
Anonymous
SCMP:Watchdog to select minibonds case soon
Article
21 Jan 2009
Joyce Man
The Consumer Council will soon choose a representative complainant to support in legal action over banks’ sale of financial derivatives issued or guaranteed by Lehman Brothers.
The products lost much or all of their value with the US bank’s collapse in September.
Democratic Party legislator Kam Nai-wai held talks with council chief executive Connie Lau Yin-hing yesterday on when the watchdog would select a case, and its progress on dealing with the 7,000 complaints the party had referred to it about the sale of Lehman Brothers derivatives.
Some 43,700 Hong Kong investors bought Lehman Brothers derivatives, mostly minibonds, worth HK$15.7 billion. Despite their name, minibonds are not corporate bonds but complex, credit-linked derivatives.
Investors claim the products were mis-sold as low-risk.
The council has been sorting through complaints to single out cases suitable for help from its legal action fund, and has identified 45.
Mr Kam urged the council to consider not only cases that involved elderly or novice investors, but also less winnable cases. Banks were more willing to settle out of court with elderly and less experienced complainants, who had a higher chance of winning in court, he said. The council should choose some younger and well-educated complainants to send to court.
The Democratic Party said Ms Lau told it that taking a representative case to court would not have any impact on a class-action lawsuit investors may bring in a US court.
21 Jan 2009
Joyce Man
The Consumer Council will soon choose a representative complainant to support in legal action over banks’ sale of financial derivatives issued or guaranteed by Lehman Brothers.
The products lost much or all of their value with the US bank’s collapse in September.
Democratic Party legislator Kam Nai-wai held talks with council chief executive Connie Lau Yin-hing yesterday on when the watchdog would select a case, and its progress on dealing with the 7,000 complaints the party had referred to it about the sale of Lehman Brothers derivatives.
Some 43,700 Hong Kong investors bought Lehman Brothers derivatives, mostly minibonds, worth HK$15.7 billion. Despite their name, minibonds are not corporate bonds but complex, credit-linked derivatives.
Investors claim the products were mis-sold as low-risk.
The council has been sorting through complaints to single out cases suitable for help from its legal action fund, and has identified 45.
Mr Kam urged the council to consider not only cases that involved elderly or novice investors, but also less winnable cases. Banks were more willing to settle out of court with elderly and less experienced complainants, who had a higher chance of winning in court, he said. The council should choose some younger and well-educated complainants to send to court.
The Democratic Party said Ms Lau told it that taking a representative case to court would not have any impact on a class-action lawsuit investors may bring in a US court.
What will Obama do?
Barack’s plans and approach: http://www.barackobama.com/index.php
Transition team’s website: http://www.change.gov
Portal to the citizenry: http://www.whitehouse.gov
Tuesday, January 20, 2009
Great value in voluntary help
I was shocked to learn that a senior lawyer charges $2,000 an hour to look into the credit linked notes.
Adrian Tan, who help me in the credit linked notes, must have spent 100 or 200 hours in helping many noteholders. He earns nothing. Adrian was a lawyer and also a financial expert. The value of his advice and help must be worth more than the senior lawyer.
Adrian was able to spend so much time, as he is not working at this time. He spends his time managing his investments. But, if given the opportunity, he would be happy to be earn an income.
I hope that the noteholders who managed to receive 100% compensation should reflect on what Adrian Tan, and other volunteers, have done for them. I am not suggesting that they should pay the volunteers, but I want the noteholders to know that if they have used a lawyer for the same help, they would have to fork out $10,000 or more, just to get the same result.
Monday, January 19, 2009
Complaining to sellers of credit linked notes
Message from Adrian Tan
Mr Tan Kin Lian has urged that the many people who have yet to lodge a complaint to do so.
If you are one of them, you should because the results of the MAS/FIs Complaints Resolution process are more favourable than many have expected. Read this.
Mr Tan Kin Lian has urged that the many people who have yet to lodge a complaint to do so.
If you are one of them, you should because the results of the MAS/FIs Complaints Resolution process are more favourable than many have expected. Read this.
In particular, minibond investors who have not complained, should do so because "For the Lehman Minibond Programme Notes which were sold by banks and one finance company, 34% will receive offers of full settlement and 41% will receive offers of partial settlement; for those sold by stockbroking firms, 1% will receive offers of full settlement and 12% % will receive offers of partial settlement."
The following form, was drafted for the use of the layperson complainant. It is self-explanatory. Many investors have used the format.
(Note to users -- You can just type the questions down in an email message, and answer them according. You need not, print out a hard copy and answer on it. Just use the format in an email message.) After completion, you can send the form here.
As said earlier, the form is self-explanatory, and anyone who has a secondary school education in English should have no problem filling it in for himself, a relative or friend. But for anyone who doesn't want to fill it in person, and is willing to pay me S$120, I will prepare a draft based on the information provided. I can be contacted at atans1@hotmail.com.
No point asking me to do it for free. If you can send me an email in English, you can fill it in yourself at no monetary cost to yourself or to complainant.
A Tan
Talk to Singapore Government
Give your votes on 18 suggestions for the Singapore Government. You can add your own suggestions for other people to vote. President-elect Obama has a similar website that attracted many vistiors. The most popular suggestion collected over 40,000 votes of support.
Thought for the day - Power
"In order to get power and retain it, it is necessary to love power; but love of power is not connected with goodness but with qualities that are the opposite of goodness, such as pride, cunning and cruelty.": Leo Nikolaevich Tolstoi - (1828-1910) Russian writer
Contributed by Ho Cheow Seng
Factors affecting the quantum of compensation
An investor who helped an elderly relative to get 100% refund of a large investment in mini-bond wishes to share the following information:
Factors affecting the quantum of compensation:
1. Vulnerable
It seems like the definition of vulnerable is a combinition of following:
- age > 62 yrs old
- uneducated
- non-english speaking
2. Tranche of your minibond.
Factors affecting the quantum of compensation:
1. Vulnerable
It seems like the definition of vulnerable is a combinition of following:
- age > 62 yrs old
- uneducated
- non-english speaking
2. Tranche of your minibond.
Different minibond series are invested in different combination of assets. Some tranches invest more in corporate bonds such as those issed by GE Capital, hence their underlying value are worth more and likely to worth more if held longer, when conditions of the captial market improves. In return for compensation, you need to transfer your rights of the minibond to the FIs, hence FIs are more willing to compensate more for those series with higher underlying value, especially the ealier tranches of minibond, as they will be able to benefit in future, if any.
3. Written Evidence.
As minibond is considered to have high risk profile, if you have written evidence that your risk profile is on the contrary (most if not all FIs need to do some form of needs analysis for you and there is a section on risk profile), then the chances of mis-selling is very high. On this basis alone, you have a high chance of winning under Common Law (i.e. sue the FI in court).
4. Customer-centric
Some FIs with progressive leadership team are more customer-centric and more willing to compensate on the basis of good will.
IN SUMMARY
Whether you get compensation and how much depends mainly on the interplay of the above four factors (although some other factors may also be relevant).
Sunday, January 18, 2009
Happy noteholders who received 100% compensation
I wish to pass this message to the 1,200 happy noteholders who received 100% compensation.
You have spent a few months of agony and worry. You were uncertain about whether your money would be gone forever.
You were deilighted to receive the recent letter or telephone call that you would be getting 100% compensation. Some of you wrote an e-mail to thank me for helping to achieve this happy outcome.
I wish to ask you to consider this possible situation. Suppose you had received a offer of partial compensation (which you consider to be insufficient) or a rejection. How would you have felt? There are 10,000 noteholders who are in this unhappy situation.
What can you do to help the other noteholders? I ask you to consider to express your support and solidarity for them.
Perhaps, if you are generous, you can consider donating 5% of the amount that you received towards a fund to help them to get legal opinion and assistance? This is just a thought. If there are sufficient people interested to make this donation, I will get someone to organise it.
Role of private capital
Private capital thrives well in a booming economy. They make easy money. They even contribute towards creating bubbles in asset prices. As the prices keep going up, they make more money.
When the bubble burst, private capital is unwilling to take risk. This caused the collapse of the credit market.
Read this article.
The Governments have to step in to provide funds to re-capitalise the banks, to guarantee bank deposits, to guarantee the credits of borrowers (i.e. homeowners, small businesses). In this case, what is the purpose of private capital?
This has happened in USA, UK, Singapore and many other countries.
What is the solution in the future? I believe that the capital has to be provided by the state (it is already happened) or by state-sponsored mutual funds. Ir should not be provided by private capital that are driven by short term gains.
Sue the relationship manager
A noteholder wanted to sue the relationship manager for giving bad advice. Other people said that there is no point to sue the relationship manager, as he will not be able to compensate the noteholder for the financial loss.
Someone told me that this is a good strategy. The relationship manager is likely to confess and tell the truth. In that case, the wrong-doings of the financial institutin will be brought to light. They might be more willing to give a fair settlement.
Google documents
I am now using Google documents to publish my survey findings. I wish to thank the reader that give me this wonderful tip.
Tips - what to avoid
1. Never invest with borrowed money
2. Never invest from a marketing company (e.g. time share, land banking, etc)
3. Never invest to get a free gift (it comes from your own money)
4, Nver invest in something that is too good to be true (it is!)
Read this article about Storm Financial.
Current market values of the credit linked notes
I wish to ask visitors to share what you know to be the current market values of the various series of credit linked notes (i.e. minibonds, high notes, pinnacle notes, jubilee notes, etc).
Please post the current values here, with the dates. Also, indicate the source of the information, e.g. website.
The note-holders will be receiving the offer of compensation from the financial institution soon. They will need to compare the offer with the market values, to make sure that the offer is at least higher.
If I have sufficient information, I shall organise them in an easy to read format. Please share your information for the benefit of all.
Contact persons (distributor, products)
Click here for the email address of the contact persons based on the distributor and type of credit linked notes:
My view: decision on 5,000 complaints
Here are my views about the decisions made by the banks on the complaints of mis-selling of the credit linked notes.
1. About 1,280 (25%) noteholders will receive full compensation. This is good news and is higher than I had expected. I like to know the amount of compensation to see if the full compensation is given mainly to the small investors or is well distributed among the small and large investors.
2. About 1,670 noteholders (33%) will be offered partial compensation. To help them decide on whether to accept the compensation, they should be informed the current value of their notes, so that they can make an informed decision.
3. Another 6,000 noteholders have not lodged their complaints yet. They should step forward to lodge their complaint now, if they have been mis-sold.
Rating of political leaders
How do Singaporeans rate our political leaders?
Here are the survey results.
Saturday, January 17, 2009
Survey: Looking for a job in 2009?
Are you likely to look for a job in 2009? In view of the recession, are you prepared to consider non-standard job options? Do you need help?
Take part in this survey.
Here are the survey results.
Book a taxi by SMS
Are you willing to pay $1 for a taxi to pick you from your home, office or outside?
Visit this website:
http://projects.easyapps.sg/tabs/about.aspx
http://projects.easyapps.sg/tabs/about.aspx
Here are the results:
Current prices of Credit Linked Notes
Click here to check the latest prices of the following:
I do not have the source for Minibonds. Anyone knows where to find the prices?
A generous financial institution
I observe that many of the 100% refund came from a certain financial institution. I am not able to name this institution now, due to insufficient evidence. But I wish to congratulate this institution for its generous approach.
I am sure that their customers will appreciate their gesture and will tell other people about it. I hope that this financial institution will prosper in the future, with the renewed trust of its customers and new customers.
SCMP:Singapore ruling on minibonds bring HK hope
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=6JL18RPAA6Z4&linkid=14290ab4-c54b-4fb9-9f70-3acd10b0c6b0&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
Fox Yi Hu
Holders of Lehman Brothers minibonds in Hong Kong have been cheered by news that one in four Singaporean complainants will receive a full refund from banks which fraudulently sold them the products.
They hope the Hong Kong government will be pressured to speed up the handling of their complaints about sales of similar investment products backed by bankrupt US bank Lehman Brothers.
The Monetary Authority of Singapore yesterday said financial institutions would make full or partial settlement to 58 per cent of complainants. It said in a statement that 25 per cent of complainants would get all their money back and 33 per cent some of their money.
“Almost all elderly investors with little income, little formal education and little investment experience have been offered full or partial settlement,” the statement said.
By Wednesday, 10 financial institutions that sold DBS High Notes 5, Lehman Minibond programme notes and Merrill Lynch Jubilee Series 3 LinkEarner notes had received 5,381 complaints, according to the Singaporean central bank.
It said Lehman minibond programme notes worth S$508 million (HK$2.63 billion) had been issued. Of the total issue, S$375 million was sold to about 8,000 retail investors through nine distributors.
Hong Kong resident Chan Hongyuk, 63, who spent about HK$1.2 million buying minibonds through Bank of China (Hong Kong), said he hoped the local government would follow suit. “It seems the Singaporean government is willing to help the victims but our government ignored us,” Mr Chan said. “ Now I feel a bit more encouraged. I thought I might lose all the investment.”
Housewife Ms Yan, who bought minibonds through Citic Ka Wah Bank, said she hoped the Hong Kong government would act more decisively after Singapore had set an example.
“We took to the streets a few times but the government seemed to be dragging its feet,” said Ms Yan, who is in her 40s. “ If the Singaporean government has assumed its responsibility and looked into problematic sales, the Hong Kong government should do something.”
Ng Siu-shin, who bought minibonds through four banks, said Singapore’s quicker pace had set Hong Kong an example. “ It shows Hong Kong how another government is working,” he said.
Minibonds are not corporate bonds, but consist of high-risk creditlinked derivatives. They are marketed as a proxy investment in well-known companies.
Fox Yi Hu
Holders of Lehman Brothers minibonds in Hong Kong have been cheered by news that one in four Singaporean complainants will receive a full refund from banks which fraudulently sold them the products.
They hope the Hong Kong government will be pressured to speed up the handling of their complaints about sales of similar investment products backed by bankrupt US bank Lehman Brothers.
The Monetary Authority of Singapore yesterday said financial institutions would make full or partial settlement to 58 per cent of complainants. It said in a statement that 25 per cent of complainants would get all their money back and 33 per cent some of their money.
“Almost all elderly investors with little income, little formal education and little investment experience have been offered full or partial settlement,” the statement said.
By Wednesday, 10 financial institutions that sold DBS High Notes 5, Lehman Minibond programme notes and Merrill Lynch Jubilee Series 3 LinkEarner notes had received 5,381 complaints, according to the Singaporean central bank.
It said Lehman minibond programme notes worth S$508 million (HK$2.63 billion) had been issued. Of the total issue, S$375 million was sold to about 8,000 retail investors through nine distributors.
Hong Kong resident Chan Hongyuk, 63, who spent about HK$1.2 million buying minibonds through Bank of China (Hong Kong), said he hoped the local government would follow suit. “It seems the Singaporean government is willing to help the victims but our government ignored us,” Mr Chan said. “ Now I feel a bit more encouraged. I thought I might lose all the investment.”
Housewife Ms Yan, who bought minibonds through Citic Ka Wah Bank, said she hoped the Hong Kong government would act more decisively after Singapore had set an example.
“We took to the streets a few times but the government seemed to be dragging its feet,” said Ms Yan, who is in her 40s. “ If the Singaporean government has assumed its responsibility and looked into problematic sales, the Hong Kong government should do something.”
Ng Siu-shin, who bought minibonds through four banks, said Singapore’s quicker pace had set Hong Kong an example. “ It shows Hong Kong how another government is working,” he said.
Minibonds are not corporate bonds, but consist of high-risk creditlinked derivatives. They are marketed as a proxy investment in well-known companies.
Difficulties faced by migrant workers
The Online Citizen has many stories of migrant workers who faced a difficult time in Singapore. There is a racket where the migrant workers were misled into paying a lot of money to come to work in Singapore for jobs that did not exist.
While Singaporeans complain about losing jobs to migrant workers, we should also spare a thought for these workers who borrowed a lot of money to come to work in Singapore. In some cases, they were cheated by people who made money from them through scams.
I hope that the Government will put a stop to the exploitation of the migrant workers.
Cast your vote here:
Blog will hit 1 million visitors by 23 Feb 2009
Earlier, this blog was expected to hit 500,000 visitors by 11 Nov 2008. This was hit much earlier, due to the minibond crisis.
Based on the current trends, this blog is expected to hit 1 million visitors by 23 Feb 2009 (i.e 3 months after the earlier target date).
Friday, January 16, 2009
Complaint on mis-selling of CLN
MAS has announced the decision made by the financial institutions on the 5,000 complaints received from the holders of the credit-linked notes (i.e. minibond, high note, jubilee note).
The other holders who have not lodged their complaints can still lodge them now. If you do not know how to lodge this complaint, I suggest that you see a lawyer to prepare a statutory declaration containing the truthful answers to the following questions:
1. Your name, NRIC, address, telephone
2. How did you get involved in the investment?
3. Which financial institution, branch, amount invested, date
4. What happened when you purchased the investment?
5. Were you alone or accompanied by another person? Who?
6. What did the representative (who sold the investment to you) tell you about investment?
7. Did the representative tell you about any guarantee on your investment?
8. Did they make you sign any form regarding the investment? Did you understand the content of the form? Was it given to you before or after you agreed to make the investment? Did you read the form? Did you understand the content?
9. Did you rely on the advice of the representative in making the investment? Which were the important aspects of the advice?
10. Do you have any other statements to make regarding this matter?
This declaration can be used to support your complaint to the financial institution that sold the credit linked note to you. It can also be used for your complaint to the Financial Industry Dispute Resolution Center (if you have to take it to the second stage). As this statement is made under oath, it is likely to have a stronger impact.
However, you should take note that it is not compulsory for you to have a statutory declaration).
You can contact the following lawyer:
Fee $150 plus GST plus disbursement (total $201.55)
Assomull & Partners
111 North Bridge Road
#22-04/05/06 Peninsula Plaza
Singapore 179098
Contact Person: Ms. Lauereth Loh, Tel: 63394466
You can also contact any of the lawyers listed here:
http://www.tankinlian.com/forms/ListofLawyersFinancialCrisisAssist(081101).pdf
Here is the guide for lodging a complaint to FIDREC:
http://www.mas.gov.sg/consumer/structured_products/fidrec_faqs.html
The other holders who have not lodged their complaints can still lodge them now. If you do not know how to lodge this complaint, I suggest that you see a lawyer to prepare a statutory declaration containing the truthful answers to the following questions:
1. Your name, NRIC, address, telephone
2. How did you get involved in the investment?
3. Which financial institution, branch, amount invested, date
4. What happened when you purchased the investment?
5. Were you alone or accompanied by another person? Who?
6. What did the representative (who sold the investment to you) tell you about investment?
7. Did the representative tell you about any guarantee on your investment?
8. Did they make you sign any form regarding the investment? Did you understand the content of the form? Was it given to you before or after you agreed to make the investment? Did you read the form? Did you understand the content?
9. Did you rely on the advice of the representative in making the investment? Which were the important aspects of the advice?
10. Do you have any other statements to make regarding this matter?
This declaration can be used to support your complaint to the financial institution that sold the credit linked note to you. It can also be used for your complaint to the Financial Industry Dispute Resolution Center (if you have to take it to the second stage). As this statement is made under oath, it is likely to have a stronger impact.
However, you should take note that it is not compulsory for you to have a statutory declaration).
You can contact the following lawyer:
Fee $150 plus GST plus disbursement (total $201.55)
Assomull & Partners
111 North Bridge Road
#22-04/05/06 Peninsula Plaza
Singapore 179098
Contact Person: Ms. Lauereth Loh, Tel: 63394466
You can also contact any of the lawyers listed here:
http://www.tankinlian.com/forms/ListofLawyersFinancialCrisisAssist(081101).pdf
Here is the guide for lodging a complaint to FIDREC:
http://www.mas.gov.sg/consumer/structured_products/fidrec_faqs.html
Queen's Counsel opinion
My lawyer contact has sent a request to the Queen's Counsel a week ago. We have still not received a reply from the Queen's Counsel on the cost of the opinion. Hence, the QC opinion will not be ready this month. I hope that it can be ready next month - provided that the cost is within budget.
Full refund of $100,000
Dear Mr. Tan,
My mother-in-law obtained a full refund of $100,000 from the financial institution on the minibond that she bought. We positioned our complaint based on the advice given in your blog. (Specific details have been removed, due to non-disclosre requirements). I wish to thank you for your help.
Thought for the day - who will speak the words that need to be heard?
" If reporters don't report and universities don't debate; if the "open society" is really just a hushed conversation within a gated community; if information is ground under by right-wing think tanks - in short, if power is admired and truth despised - then who will speak the words clearly that need to be heard"
Roger Langen
Contributed by Ho Cheow Seng
MAS statement: Compensation for credit linked notes
Further details of the compensation are shown in MAS website:
According to the MAS statement, the investors would be informed about the compensation offer in stages over the next few weeks. This could explain why so few investors have received their offer of compensation so far.
Mis-selling of structured products
Almost all elderly investors with little income, formal education or investment experience were compensated.
By Francis Chan
MORE than half of the reviewed complaints of structured products of Lehman Minibonds, DBS High Notes 5 and Merril Lynch Jubilee Series 3 Linkearner Notes have received some compensation, said the Monetary Authority of Singapore on Friday. In the latest update, MAS says 58 per cent of investors who have lodged complaints of mis-selling to the financial institutions that sold them the products have received a full or partial settlement.
About 25 per cent of those received full settlements, while 33 per cent got partial settlements.
According to the MAS, almost all elderly investors with little income, formal education or investment experience have been fully or partially compensated.
MAS deputy managing director for market conduct, Shane Tregillis said: 'MAS is satisfied that FIs have carefully reviewed the complaints based on principals of fairness without taking strict legal positions. This is reflected in the settlements offers that the FIs are making to the investors.'
http://www.straitstimes.com/Breaking+News/Singapore/Story/STIStory_326983.html
By Francis Chan
MORE than half of the reviewed complaints of structured products of Lehman Minibonds, DBS High Notes 5 and Merril Lynch Jubilee Series 3 Linkearner Notes have received some compensation, said the Monetary Authority of Singapore on Friday. In the latest update, MAS says 58 per cent of investors who have lodged complaints of mis-selling to the financial institutions that sold them the products have received a full or partial settlement.
About 25 per cent of those received full settlements, while 33 per cent got partial settlements.
According to the MAS, almost all elderly investors with little income, formal education or investment experience have been fully or partially compensated.
MAS deputy managing director for market conduct, Shane Tregillis said: 'MAS is satisfied that FIs have carefully reviewed the complaints based on principals of fairness without taking strict legal positions. This is reflected in the settlements offers that the FIs are making to the investors.'
http://www.straitstimes.com/Breaking+News/Singapore/Story/STIStory_326983.html
Thursday, January 15, 2009
Investor wants to sue the relationship manager
Dear Mr. Tan
Seek your views on the following:
Q1 Can sue the RM personally for mis-selling and mis-representation, if I am not happy with FI investigation.
Q2 If I sue the RM, do you think the FI will defend her or the RM has to defend herself.
Q3 Do you think Leonard Loo is a possible choice, or get another lawyer?
Actually, money loss can be earned back. It saddened me that many uncles and aunties may not even know they are intoxicated OR those who are intoxicated may not know how to fight on ground of mis-selling and mis-rep which is a legal concept.
I think MAS is making it worst for investors. Imagine, we are cheated, now we have to prove that we are “idiot” ie “vulnerable or mis-selling or mis-rep” to get back our money?
Seek your views on the following:
Q1 Can sue the RM personally for mis-selling and mis-representation, if I am not happy with FI investigation.
Q2 If I sue the RM, do you think the FI will defend her or the RM has to defend herself.
Q3 Do you think Leonard Loo is a possible choice, or get another lawyer?
Actually, money loss can be earned back. It saddened me that many uncles and aunties may not even know they are intoxicated OR those who are intoxicated may not know how to fight on ground of mis-selling and mis-rep which is a legal concept.
I think MAS is making it worst for investors. Imagine, we are cheated, now we have to prove that we are “idiot” ie “vulnerable or mis-selling or mis-rep” to get back our money?
"Pinnacle Action Group" formed to work on a possible Class Action
(1) A working committee of 6 investors (informally called "Pinnacle Action Group") have come together to work on a possible class action for Series 1,2,3,5,6,7,9 & 10 of the Pinnacle Notes. Series 9 & 10 have been declared worthless and the other Series were notified in December 2008 that they are close to but not yet declared worthless. The fate of these other series now hang in the balance. The group feels that we cannot allow this tragic event to go unchallenged
(2) We have briefed several Senior Counsel (SC)and the proposed class action will,unlike the case of Minibonds, be against the arranger of the Notes, viz Morgan Stanley Singapore. An official website to facilitate the organizing of the proposed class action will be launched as soon as one of the SC briefed has been appointed to take on the case.
(3)The proposed class action will target 1000 or more affected investors in the various series to join in .The legal fee structure proposed will be simple and affordable - perhaps as low as only about $1000/- per head - on an all-inclusive basis right up to appeal stage , win or lose. To do this , we need 1000 or more to join in. The process will also be kept simple and the issues raised will be easy to understand for all who wish to join in the proposed class action and try and recoup their losses.
To be kept informed, before the launch the official "Pinnacle Class Action" website, Pinnacle investors are urged to contact us at the email address given below. Please provide us with your:
(a) name; (b) Series bought; (c) email address, and (d) contact tel
Thank you.
Sincerely,
"Pinnacle Action Group"
(J C Chan, S Tan, C S Lim, P Loh, B T Tee and C Y Boey)
Email: pinnacle.action.group@gmail.com
Wednesday, January 14, 2009
Value and character
I teach a course in Singapore Management University.
Apart from the syllabus of the course, I like the students to learn some values and tips that will be useful for them to cope with the challenges of life.
I will share some of the values that guide my character. I hope that these values will be useful as a guide to the students.
Tuesday, January 13, 2009
How to identity a bubble
Someone asked, "How to identify a bubble?"
The answer: "Nobody knows". Alan Greenspan, the former chairman of the US Federal Reserve Board said that one knows a bubble after it has burst. This is not helpful. It turned out to be disastrous, as the bursting of the US housing bubble has led to the global financial crisis.
Is there a rule of thumb to identify a bubble? Nobody has dared to stick out his thumb. But I shall try.
You get a bubble when the current price is 50% or 100% higher than the average price for the past 5 years. Maybe, we should look at the actual statistics and see if 50% or 100% is a better indicator.
For example, the average oil price during the past 5 years prior to 2008 must be around US$40. When it exceeded US$80, it was a bubble. After it burst, it returned to US$40.
When the high end property prices in Singapore doubled in value in 2008 compared to the past years, it was a bubble. It burst soon after.
The answer: "Nobody knows". Alan Greenspan, the former chairman of the US Federal Reserve Board said that one knows a bubble after it has burst. This is not helpful. It turned out to be disastrous, as the bursting of the US housing bubble has led to the global financial crisis.
Is there a rule of thumb to identify a bubble? Nobody has dared to stick out his thumb. But I shall try.
You get a bubble when the current price is 50% or 100% higher than the average price for the past 5 years. Maybe, we should look at the actual statistics and see if 50% or 100% is a better indicator.
For example, the average oil price during the past 5 years prior to 2008 must be around US$40. When it exceeded US$80, it was a bubble. After it burst, it returned to US$40.
When the high end property prices in Singapore doubled in value in 2008 compared to the past years, it was a bubble. It burst soon after.
A new way to do business - by conference call
I have to discuss a business proposal with a Telco. Their marketing managers were busy and could not find a convenient time for a meeting. We decided to have a conference call. It went smoothly. There was no need for a face to face meeting. This is a new way to do business. It is more efficient.
Thought for the day - Injustice
If you are neutral in situations of injustice, you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse and you say that you are neutral, the mouse will not appreciate your neutrality:[ Bishop Desmond Tutu]
Contributed by Ho Cheow Seng
Contributed by Ho Cheow Seng
Monday, January 12, 2009
Invest in assets at deflated prices
In normal times, investment in shares give a dividend yield of around 3%. In a crisis, when the share price dropped by 50%, the dividend yield increase to 6%. It is likely that the company will suffer lower profits, so the dividend will be reduced. After reduction, the yield is likely to be still quite attractive.
If business conditions are bad, the company has the choice to reduce their cost by downsizing their operations. When their profit stabilizes, their share price will also stop dropping. When the profit increases with the return of economic growth, the share price will show a good gain.
It may take a few years or longer, but it will eventually happen. In the meantime, the dividend yield will continue to be quite attractive. To avoid the risk of selecting the wrong shares (i.e. of a company that may go bust), it is important th diversify the investment into a fund (e.g. an exchange traded fund).
My view: Invest when the share price is deflated, due to the pessimistic situation. Invest for the long term.
If business conditions are bad, the company has the choice to reduce their cost by downsizing their operations. When their profit stabilizes, their share price will also stop dropping. When the profit increases with the return of economic growth, the share price will show a good gain.
It may take a few years or longer, but it will eventually happen. In the meantime, the dividend yield will continue to be quite attractive. To avoid the risk of selecting the wrong shares (i.e. of a company that may go bust), it is important th diversify the investment into a fund (e.g. an exchange traded fund).
My view: Invest when the share price is deflated, due to the pessimistic situation. Invest for the long term.
Beware of bubbles
A bubble occurs when market prices are inflated beyond their real values. This has happened with the property market, stock market and more recently, with the commodity market, oil market, China stockmarket and India stockmarket.
All bubbles will lead to a collapse. All the markets mentioned above have collapsed.
Many people may not realise that there is another safe market that is in a bubble. It is the Government bond market. Due to risk aversion, many people put their money in long term Government bonds. The excess demand has pushed up the price and reduce the yield.
If the long term yield for safe Government bonds should be 4% (to cover inflation and cost of money) and excess demand causes the yield to drop to 2%, the price has gone up by about 25% in the case of a 15 year bond. If the yield returns back to the real value of 4%, the price will drop by 20% to get back to the normal level. It is possible to have a bubble in safe investments as well.
If you are caught with long term bonds yielding 2% (and the market price has dropped by 20%, you still have the option of keeping your money at the low yield of 2% for the 15 years).
Lesson: Avoid bubbles. Avoid paying a high price for your investment. Take a long term view.
All bubbles will lead to a collapse. All the markets mentioned above have collapsed.
Many people may not realise that there is another safe market that is in a bubble. It is the Government bond market. Due to risk aversion, many people put their money in long term Government bonds. The excess demand has pushed up the price and reduce the yield.
If the long term yield for safe Government bonds should be 4% (to cover inflation and cost of money) and excess demand causes the yield to drop to 2%, the price has gone up by about 25% in the case of a 15 year bond. If the yield returns back to the real value of 4%, the price will drop by 20% to get back to the normal level. It is possible to have a bubble in safe investments as well.
If you are caught with long term bonds yielding 2% (and the market price has dropped by 20%, you still have the option of keeping your money at the low yield of 2% for the 15 years).
Lesson: Avoid bubbles. Avoid paying a high price for your investment. Take a long term view.
Insurance that worsen crunch
Read this article. It explains the challenges faced by the economy during the global credit crisis.
Insurance that worsen crunch
The solution? Credit insurance should be operated by the government as a non-profit business.
Insurance that worsen crunch
The solution? Credit insurance should be operated by the government as a non-profit business.
SCMP:Regulators' reports raise more questions than answers
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=3B7XNUZV4CY7&linkid=9cd18f02-f626-4a17-a5f9-1bda0d2b7346&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
13 Jan 2009
Enoch Yiu
The two regulators' reports on the Lehman Brothers minibond fiasco have raised many questions but failed to find a solution to prevent a recurrence of the problem.
The 83-page report by the Hong Kong Monetary Authority and the 76-page report by the Securities and Futures Commission have been dissected and analysed since they were published last Thursday.
The stakes were high - the government ordered the two to report on the issue after 43,000 investors suffered losses from minibond products issued or guaranteed by Lehman, which collapsed in September.
But White Collar is disappointed the reports offer too few effective solutions to prevent such events from happening again. In fact, they only raise the prospect of a power struggle between the HKMA and the SFC on how to regulate banks' selling of similar types of products in future.
For one thing, the reports show that the regulators have no intention of banning complicated products such as the Lehman minibonds being sold to retail investors, which White Collar believes is the core of the problem.
A key complaint about the Lehman minibonds was why such a product, which are derivatives of credit-linked notes, could be sold to a 90-year-old housewife or 88-year-old retirees through bank branches as an alternative to time deposits.
Under the current regulatory system they did not need any regulatory approval, just the SFC green light on the marketing material.
Both the HKMA and the SFC say such an approach is good enough as they claim it should be the intermediaries who should see to the suitability of the products for investors. The two regulators also argue that investors may mistakenly believe that products approved by the regulators are safe.
The regulators said this was in line with international practices but White Collar urges our regulatory friends to rethink.
Unlike markets in Australia, Britain or the United States, where retail investors invest through fund products, Hong Kong retail investors are trading all types of investment products. This makes Hong Kong different from other markets.
If the regulators relied on intermediaries to recommend suitable products for clients, it is tantamount to downward delegation and this paves the way for mis-selling.
Such a disclosure approach is only adopted in the stock market - all listed companies in Hong Kong must first get SFC and stock exchange approval for them to go public and sell shares to investors.
Why do other investment products such as Lehman minibonds or derivatives such as accumulators not need regulatory approval before being sold to investors?
Britain is consistent with the disclosure base regulatory philosophy adopted by the Alternative Investment Market (AIM) which allows companies to list without regulatory approval. They only need to disclose information and to have a sponsor support their listing. In Hong Kong, the stock exchange has rejected the AIM model during discussions to reform the Growth Enterprise Market, saying that many retail investors are not ready to move to such a model.
If they are not ready for a Hong Kong version of AIM, they are also not ready for minibonds or accumulators.
What the two reports will surely lead to is a power struggle between the HKMA and the SFC on how to regulate banks' securities departments.
The HKMA said it should be the sole regulator and should take over the SFC's power to investigate and punish bank staff involved in securities dealing.
But the SFC said banks should set up subsidiaries to handle investment sales and let the commission regulate it. Neither proposals are perfect.
If the HKMA proposal is adopted, then it is bound to be opposed by stockbrokers as the HKMA would no longer use the same standards that the SFC applies to brokers. What is more, how can the authority punish banks?
While the SFC can publicly reprimand, revoke or suspend operations of brokers and their staff, such actions would be difficult to impose on a lender as that would affect the public's confidence in the lender, which may well lead to a bank run.
If the government adopts the SFC model, then the HKMA would not have the full picture on all operations of the bank and there may be a danger that losses incurred in the securities subsidiaries may affect its parent banking group.
The two reports have raised more questions than answers.
13 Jan 2009
Enoch Yiu
The two regulators' reports on the Lehman Brothers minibond fiasco have raised many questions but failed to find a solution to prevent a recurrence of the problem.
The 83-page report by the Hong Kong Monetary Authority and the 76-page report by the Securities and Futures Commission have been dissected and analysed since they were published last Thursday.
The stakes were high - the government ordered the two to report on the issue after 43,000 investors suffered losses from minibond products issued or guaranteed by Lehman, which collapsed in September.
But White Collar is disappointed the reports offer too few effective solutions to prevent such events from happening again. In fact, they only raise the prospect of a power struggle between the HKMA and the SFC on how to regulate banks' selling of similar types of products in future.
For one thing, the reports show that the regulators have no intention of banning complicated products such as the Lehman minibonds being sold to retail investors, which White Collar believes is the core of the problem.
A key complaint about the Lehman minibonds was why such a product, which are derivatives of credit-linked notes, could be sold to a 90-year-old housewife or 88-year-old retirees through bank branches as an alternative to time deposits.
Under the current regulatory system they did not need any regulatory approval, just the SFC green light on the marketing material.
Both the HKMA and the SFC say such an approach is good enough as they claim it should be the intermediaries who should see to the suitability of the products for investors. The two regulators also argue that investors may mistakenly believe that products approved by the regulators are safe.
The regulators said this was in line with international practices but White Collar urges our regulatory friends to rethink.
Unlike markets in Australia, Britain or the United States, where retail investors invest through fund products, Hong Kong retail investors are trading all types of investment products. This makes Hong Kong different from other markets.
If the regulators relied on intermediaries to recommend suitable products for clients, it is tantamount to downward delegation and this paves the way for mis-selling.
Such a disclosure approach is only adopted in the stock market - all listed companies in Hong Kong must first get SFC and stock exchange approval for them to go public and sell shares to investors.
Why do other investment products such as Lehman minibonds or derivatives such as accumulators not need regulatory approval before being sold to investors?
Britain is consistent with the disclosure base regulatory philosophy adopted by the Alternative Investment Market (AIM) which allows companies to list without regulatory approval. They only need to disclose information and to have a sponsor support their listing. In Hong Kong, the stock exchange has rejected the AIM model during discussions to reform the Growth Enterprise Market, saying that many retail investors are not ready to move to such a model.
If they are not ready for a Hong Kong version of AIM, they are also not ready for minibonds or accumulators.
What the two reports will surely lead to is a power struggle between the HKMA and the SFC on how to regulate banks' securities departments.
The HKMA said it should be the sole regulator and should take over the SFC's power to investigate and punish bank staff involved in securities dealing.
But the SFC said banks should set up subsidiaries to handle investment sales and let the commission regulate it. Neither proposals are perfect.
If the HKMA proposal is adopted, then it is bound to be opposed by stockbrokers as the HKMA would no longer use the same standards that the SFC applies to brokers. What is more, how can the authority punish banks?
While the SFC can publicly reprimand, revoke or suspend operations of brokers and their staff, such actions would be difficult to impose on a lender as that would affect the public's confidence in the lender, which may well lead to a bank run.
If the government adopts the SFC model, then the HKMA would not have the full picture on all operations of the bank and there may be a danger that losses incurred in the securities subsidiaries may affect its parent banking group.
The two reports have raised more questions than answers.
Sunday, January 11, 2009
Part Time Work
There is strong interest in looking for part time work $6 to $10 an hour, preferably near the home. I will approach someone to create a portal to allow the matching of part time workers and employers.
I hope that this will create a new type of employment. The employer can engage a part time worker initially, and offer full time work if the worker is found to be suitable.
I hope that this will create a new type of employment. The employer can engage a part time worker initially, and offer full time work if the worker is found to be suitable.
TABS - Taxi Automated Booking Service (8202 8866)
You can test TABS now by sending a zone code (from 01 to 82) to TABS 82028866. If a taxi is available, you will get a SMS stating that a taxi will call you on your mobile phone. Actually, you will get a dummy taxi (during this testing period). You will get the SMS, but there is no actual taxi at this time.
If no taxi is available, you will be placed on the queue for the next "dummy" taxi to be available. You should get a SMS within 5 minutes.
Give it a try. The zone should be the first two digit of the postal code of your home, office or wherever you happen to be.
Send ZZ (01 to 82) to 82028866. Test the system now. It is FREE.
If no taxi is available, you will be placed on the queue for the next "dummy" taxi to be available. You should get a SMS within 5 minutes.
Give it a try. The zone should be the first two digit of the postal code of your home, office or wherever you happen to be.
Send ZZ (01 to 82) to 82028866. Test the system now. It is FREE.
Hilarious sayings of George W Bush
And they have no disregard for human life."—Describing the brutality of Afghan fighters, Washington, D.C., July 15, 2008
I remember meeting a mother of a child who was abducted by the North Koreans right here in the Oval Office."—Washington, D.C., June 26, 2008
"We want people owning their home—we want people owning a businesses."—Washington, D.C., April 18, 2008
"How can you possibly have an international agreement that's effective unless countries like China and India are not full participants?"—Camp David, April 19, 2008
More here
http://www.tankinlian.com/articles/wisdom.html
I remember meeting a mother of a child who was abducted by the North Koreans right here in the Oval Office."—Washington, D.C., June 26, 2008
"We want people owning their home—we want people owning a businesses."—Washington, D.C., April 18, 2008
"How can you possibly have an international agreement that's effective unless countries like China and India are not full participants?"—Camp David, April 19, 2008
More here
http://www.tankinlian.com/articles/wisdom.html
Saturday, January 10, 2009
SCMP:Two women sue bank over minibond losses
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=F1QJNO2RI9J2&linkid=d00bf96d-c7e9-49c5-935e-470eb087254e&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
11 Jan 2009
Yvonne Tsui
A 69-year-old woman and her daughter-in-law are seeking a full refund and damages from the Bank of China (Hong Kong) over their losses in Lehman Brothers minibonds.
Chin Yee-ching, a retired woman living in Malaysia, and her daughterin-law Chan Lai-mei, who lives in Po Shan Road, filed a writ in the High Court against Bank of China (Hong Kong) on Friday.
The bank is accused of being negligent in failing to “ correctly and accurately disclose and explain the real nature and structure of the product” and the true risk involved in their minibond investments.
Minibonds are not corporate bonds, but consist of high-risk creditlinked derivatives. They are marketed as a proxy investment in well-known companies.
In the writ, the pair also allege the bank failed to provide sufficient information and time for them to consider and make investment decisions about the products.
It said that Ms Chin and Ms Chan were approached by Cheng Kit-yee, a bank officer at a branch in Connaught Road Central, and Ms Cheng persuaded them to buy a series 35 minibond.
The claim said Ms Cheng told Ms Chan that the minibond was very low risk and the interest yield was good. Ms Cheng allegedly told her that the product was just like a time deposit and was very safe, while the interest was a little bit higher.
Ms Chan then agreed to early uplift of her US dollar fixed time deposit of US$ 80,000 so she could buy the minibonds, and Ms Cheng helped her apply for a waiver of the early uplift penalty. The writ said Ms Chan further agreed to use HK$ 400,000 savings to purchase the minibonds.
Having allegedly suggested the product was low risk and a conservative investment, Ms Cheng advised Ms Chin to invest her HK$1.48 million savings in minibonds.
However, another bank officer, Kenneth Lam, informed the pair in late September that the collapse of the American bank on September 15 affected their minibond investments.
11 Jan 2009
Yvonne Tsui
A 69-year-old woman and her daughter-in-law are seeking a full refund and damages from the Bank of China (Hong Kong) over their losses in Lehman Brothers minibonds.
Chin Yee-ching, a retired woman living in Malaysia, and her daughterin-law Chan Lai-mei, who lives in Po Shan Road, filed a writ in the High Court against Bank of China (Hong Kong) on Friday.
The bank is accused of being negligent in failing to “ correctly and accurately disclose and explain the real nature and structure of the product” and the true risk involved in their minibond investments.
Minibonds are not corporate bonds, but consist of high-risk creditlinked derivatives. They are marketed as a proxy investment in well-known companies.
In the writ, the pair also allege the bank failed to provide sufficient information and time for them to consider and make investment decisions about the products.
It said that Ms Chin and Ms Chan were approached by Cheng Kit-yee, a bank officer at a branch in Connaught Road Central, and Ms Cheng persuaded them to buy a series 35 minibond.
The claim said Ms Cheng told Ms Chan that the minibond was very low risk and the interest yield was good. Ms Cheng allegedly told her that the product was just like a time deposit and was very safe, while the interest was a little bit higher.
Ms Chan then agreed to early uplift of her US dollar fixed time deposit of US$ 80,000 so she could buy the minibonds, and Ms Cheng helped her apply for a waiver of the early uplift penalty. The writ said Ms Chan further agreed to use HK$ 400,000 savings to purchase the minibonds.
Having allegedly suggested the product was low risk and a conservative investment, Ms Cheng advised Ms Chin to invest her HK$1.48 million savings in minibonds.
However, another bank officer, Kenneth Lam, informed the pair in late September that the collapse of the American bank on September 15 affected their minibond investments.
Yield during the Great Depression of the 1930s
Dr. Money wrote in The New Paper:
For example, if you bought US shares in 1929, it would have taken 28 years – until 1957 – before you got back all your investment. Other markets have taken even longer.
It is true that stocks earn 10 per cent against 3 per cent for bonds – in the long-run. But that can be very long.
Here is my perspective.
For example, if you bought US shares in 1929, it would have taken 28 years – until 1957 – before you got back all your investment. Other markets have taken even longer.
It is true that stocks earn 10 per cent against 3 per cent for bonds – in the long-run. But that can be very long.
Here is my perspective.
If you buy shares now, when it has dropped 50% and it takes 28 years to reach its previous peak (i.e. 100% gain from the current price), the effective yield is 2.5% per annum. If it takes a shorter time to reach the previous peak, the yield will be higher than 2.5% per annum.
SCMP:Deadline issued for investmen
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=I3SLL39DTVA5&linkid=4f97714b-ad98-4e5a-8667-07964f5d0135&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
10 Jan 2009
Enoch Yiu and Maria Chan
The Hong Kong Monetary Authority told banks yesterday to implement seven consumer protection measures concerning the sale of investment products, and to formulate plans to separate their deposit-taking and retail securities business before the end of March.
The measures are part of a range of proposals suggested in separate reports disclosed on Thursday by the authority and the Securities and Futures Commission on last year’s Lehman Brothers minibond fiasco. On the same day, Financial Secretary John Tsang Chun-wah ordered “an immediate review” of Hong Kong’s financial regulatory structure.
The authority sent a circular to all banks yesterday requiring them to immediately add “health-warning” statements to their sales material on retail derivative products to warn of their risks. It told them to immediately introduce adequate controls to ensure sales staff were not solely rewarded for sales performance.
By the end of March, banks must instal audio systems to record client conversations on investment products sales, as well as introduce a “mystery shopper” programme – in which undercover staff monitor the behaviour of those selling investment products.
In addition, the authority told banks to formulate plans to separate their deposit-taking and investment products sales functions. Both reports said it was a conflict for bank tellers to handle deposits and sales. But the regulators have different ideas on how to solve the problem.
The authority report said banks should use separate counters and staff in a branch to sell investment products. But the SFC suggested banks be banned from using their branch networks at all for these financial instruments. Rather, they should set up a separate subsidiary, using different offices and staff.
The proposed reforms come in the wake of the collapse of the US bank Lehman Brothers in September, a crisis that left 43,700 Hong Kong investors holding derivatives it issued or guaranteed, but which had lost much or all of their value.
Many claimed they were misled by bank tellers, who sold the products as alternatives to time deposits or low-risk bonds when, in fact, they were risky credit-linked derivatives.
Raymond So Wai-man, an associate professor of finance at Chinese University, supported the idea that banks should separate deposit-taking and investment products sales.
“When bank tellers make use of depositors’ financial information and cross-sell them investment products, customers may be confused between investment and deposit taking,” he said. Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks
But Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks, said some banks were very small and it might not be easy to have separate counters.
Mr Wong said banks might face higher operating costs after adopting the suggested proposals. “It’s hard to say whether banks have to pass on the cost to consumers,” he said.
The authority and the SFC reports both noted that Britain, Singapore and Australia had “cooling off” periods of 14 to 30 days on some investment products in which customers can change their minds.
In Hong Kong, there is no such cooling off period. However, the Hong Kong Federation of Insurers does have a cancellation period in which customers can cancel their policies up to 21days after applying.
Chan Kin-por, lawmaker for the insurance sector, said this had helped to reduce complaints. He said 10 to 15 per cent of policies sold were cancelled in the cooling off period.
10 Jan 2009
Enoch Yiu and Maria Chan
The Hong Kong Monetary Authority told banks yesterday to implement seven consumer protection measures concerning the sale of investment products, and to formulate plans to separate their deposit-taking and retail securities business before the end of March.
The measures are part of a range of proposals suggested in separate reports disclosed on Thursday by the authority and the Securities and Futures Commission on last year’s Lehman Brothers minibond fiasco. On the same day, Financial Secretary John Tsang Chun-wah ordered “an immediate review” of Hong Kong’s financial regulatory structure.
The authority sent a circular to all banks yesterday requiring them to immediately add “health-warning” statements to their sales material on retail derivative products to warn of their risks. It told them to immediately introduce adequate controls to ensure sales staff were not solely rewarded for sales performance.
By the end of March, banks must instal audio systems to record client conversations on investment products sales, as well as introduce a “mystery shopper” programme – in which undercover staff monitor the behaviour of those selling investment products.
In addition, the authority told banks to formulate plans to separate their deposit-taking and investment products sales functions. Both reports said it was a conflict for bank tellers to handle deposits and sales. But the regulators have different ideas on how to solve the problem.
The authority report said banks should use separate counters and staff in a branch to sell investment products. But the SFC suggested banks be banned from using their branch networks at all for these financial instruments. Rather, they should set up a separate subsidiary, using different offices and staff.
The proposed reforms come in the wake of the collapse of the US bank Lehman Brothers in September, a crisis that left 43,700 Hong Kong investors holding derivatives it issued or guaranteed, but which had lost much or all of their value.
Many claimed they were misled by bank tellers, who sold the products as alternatives to time deposits or low-risk bonds when, in fact, they were risky credit-linked derivatives.
Raymond So Wai-man, an associate professor of finance at Chinese University, supported the idea that banks should separate deposit-taking and investment products sales.
“When bank tellers make use of depositors’ financial information and cross-sell them investment products, customers may be confused between investment and deposit taking,” he said. Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks
But Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks, said some banks were very small and it might not be easy to have separate counters.
Mr Wong said banks might face higher operating costs after adopting the suggested proposals. “It’s hard to say whether banks have to pass on the cost to consumers,” he said.
The authority and the SFC reports both noted that Britain, Singapore and Australia had “cooling off” periods of 14 to 30 days on some investment products in which customers can change their minds.
In Hong Kong, there is no such cooling off period. However, the Hong Kong Federation of Insurers does have a cancellation period in which customers can cancel their policies up to 21days after applying.
Chan Kin-por, lawmaker for the insurance sector, said this had helped to reduce complaints. He said 10 to 15 per cent of policies sold were cancelled in the cooling off period.
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