Exchange Traded Fund (ETF) information

Dear Sir,

I am Kay from moneytalk.sg. I have wrote a series of posts that discusses about the STI ETF in detail. The reason why I'm doing this is that I wish to create more awareness that STI ETF is a good form of investment that can give adequate returns if one is willing to hold in for the long term. Instead of putting their hard-earned money into risky products that offer poor returns, I hope more people can consider the STI ETF.

Some of the information in my posts include an explanation of the STI ETF, likely returns in the long run, dividend yield, when to buy it and a dollar cost averaging plan.

Thanks and all the best for 2009 :)

Kay

HK: Finance chief given report on minibonds saga

Joyce Man
Jan 01, 2009

The banking and securities regulators handed a report on the minibonds saga to the financial secretary yesterday, three months after investors started complaining....

http://www.scmp.com/portal/site/SCMP/menuitem.2c913216495213d5df646910cba0a0a0/?vgnextoid=6706eaf33ad8e110VgnVCM100000360a0a0aRCRD&vgnextfmt=teaser&s=news

In memory of Mr. J. B. Jeyaretnam

Please participate in this survey:

http://www.surveymonkey.com/s.aspx?sm=o8NC2vbEBs8wFpqFwBNqbg_3d_3d

Speech at Hong Lim Park, New Year's Eve Party

I wish to thank Chee Siok Chin for inviting me to this event and giving me the opportunity to speak a few words in memory of Mr. J. B. Jeyaretnam.

I do not know Mr. Jeyaretnam personally. I attended only one of his election rally in the late 1970s and only for a few minutes.

What I knew of him came mainly from reports in the newspapers over the next 20 years. They covered the unhappy events in his life, like defending against defamation suits or for infringements of certain regulations on his political activities. Like most Singaporeans, I had a somewhat negative opinion of him from these reports.

In July this year, my friend invited me to the inaugural dinner of the Reform Party that was just set up by Mr. Jeyaretnam. At the dinner, I decided to buy two copies of his books as a show of support. The book was a collection of his speeches in Parliament over the years.

My impression of Mr. Jeyaretnam changed quite completely after reading a few paragraphs from the book. Here was a man who was passionate about the well being of the people of Singapore and, especially in uplifting the life of the lower income levels in our society.

I realised that I shared many of his values and passion. I thought of finding the occasion to get to know him better as a person.

That opportunity is now gone forever. Mr. Jeyaretnam passed away suddenly a few months later.

Someone circulated an e-mail containing a tribute to Mr. Jeyaretnam. He described Mr. Jeyaretnam as a person who had done his best for what he believed to be good for Singapore and Singaporeans, and yet many Singaporeans did not know of him and his sacrifice. I decided to post this tribute in my blog.

A few people asked for signatures to an open letter to the Prime Minister to ask for the public service of Mr. Jeyaretnam to be recognised. I decided to join in and to help to get more signatures.

I was disappointed in getting only 25 signatures after a week, in spite of several efforts to publicise it. This number was so small, compared to an earlier signature campaign on the credit linked notes which collected nearly 1,000 signatures. Perhaps, Singaporeans did not see Mr. Jeyaretnam in a positive light or were afraid to be seen as supporting the call in the open letter.

I hope that, over the years, Singaporeans will get to know better of Mr. J. B. Jeyaretnam and what he has done for Singapore.

2008 has been a difficult year. 2009 will continue to be challenging. In spite of the uncertainties, let me wish all of you the very best for 2009 and the years ahead.

Tan Kin Lian

Credit freeze in Singapore

A few weeks ago, the Government took the bold step of guaranteeing all bank deposits in Singapore. This was to prevent the outflow of deposits to other countries that provided similar gaurantees. (Personally, I do not agree with this approach, as it continued to depress interest rate in Singapore).

Later, the Government provided some guarantee for banks to provide credits for business operations, subject to some due diligence. I remembered that the guarantee was for 50% of the lending.

I heard from a business friend that the guarantee had since been increased to 80 or 90 percent, but the banks are still reluctant to lend. (I have not verified this information). The unwillingness of banks to lend is causing some business failures - as they depend on credit to continue their operations.

In my view, it is a bad idea for business to depend on short term credit from banks for their operations. They should increase their capital or issue long term bonds that pay a higher rate of interest (say 4 to 7% p.a.). They can earn a higher return on their investment, so they can afford a higher and fairer payout to the bond holders.

To make these bonds attractive to long term investors, the guarantee can provide a guarantee on the principal and dividends and charge a guarantee fee to the issuer. This will allow the issuer to get a source of long term funding and do not have to worry about talking to the bank yearly.

This Government guarantee fee can be at a subsidised rate, to support the economy in its current phase. When the conomy stabilises, it can be done at the market rate, which depends on the risk. The Government can also set up a separate insurance company to provide the credit default insurance on commercial terms. 

Summary: Encourage businesses to issue long term bonds to get a secure source of funds for their long term operations. The Government can provide a guarantee on these bonds (subject to due diligence and a guarantee fee),  to help businesses to overcome the current economic turmoil. 

MAS acting on complaints

Dec 31, 2008

I REFER to last Wednesday's letter by Mr Leong Kok Ho, 'Why MAS should handle complaints'. The Monetary Authority of Singapore (MAS) understands the anxiety of many investors who have bought DBS High Notes 5, Lehman Minibond Notes and Merrill Lynch Jubilee Series 3 LinkEarner Notes. 

We assure investors that we are monitoring the financial institutions' complaints handling and resolution process. Our priority is to ensure that all complaints are handled seriously and impartially without the process becoming overly legalistic.

Independent parties have been appointed to review the resolution processes of the financial institutions concerned to ensure that these processes are independent, fair and transparent.

MAS has, in consultation with the independent parties, conducted on-site visits to assess the handling and review of complaints, including observing the internal review panels in action. We are working with the independent parties to ensure that each financial institution has a robust assessment framework to identify indicators of potential mis-selling and offer fair financial settlement where appropriate. The independent parties have provided feedback to MAS on how the financial institutions have applied the framework across a sample of actual cases. We are ensuring that the assessment framework is consistent across financial institutions.

Investors who are not satisfied with the outcome of the financial institution's review of their complaints may refer their complaints to the Financial Industry Dispute Resolution Centre (FIDReC) for resolution. FIDReC is an independent body set up to provide investors with an affordable and impartial avenue to pursue claims against their financial institution. The decision of the FIDReC adjudicator is final and binding on the financial institution, but not on the investor. If the investor is not happy with the decision made at FIDReC, he is free to reject the decision and pursue his claim through other avenues.

As part of MAS' formal investigations, we are looking at financial institution-wide issues, such as the financial institutions' due diligence on structured notes, the procedures used at the point of sale, and the training and supervision of relationship managers. MAS will take firm and appropriate regulatory actions where there are breaches of law or regulations by the financial institutions or their representatives. MAS is also working with the independent parties to ensure that any potential financial institution-wide issues identified in the course of investigations have been incorporated into the assessment of individual complaints.

Angelina Fernandez
Director (Communications)
Monetary Authority of Singapore
http://www.straitstimes.com/ST%2BForum/Story/STIStory_320293.html