Will the co-ordinator of Pinnacle Notes, and the co-ordinators of investors that bought minibonds etc from UOB Kay Hian and Phillips, please contact Adrian Tan at atans1@hotmail.com?
Volunteers are willing to analyse the prospectuses, pricing supplements, promotional materials and advertisements of Pinnacle notes, and minibonds etc that Phillips Secs and UOB Kay Hian clients bought. Copies of these materials are needed.
Monday, October 27, 2008
Sunday, October 26, 2008
A fair rate of return
Hi Mr. Tan,
Investors in Singapore have no real safe alternatives to park their money and get a fair return if they don't want any risk. So, what is a fair return for keeping money safe? My feel is that, the return should at the very least offset inflation.
However, for far too long, savings/fixed deposit rates at banks here are ridiculously low. The last time I checked, POSB/DBS, fixed deposit is at around 0.45 percent to 0.75 percent, for most people, of course, depending on amount & tenure. This can hardly offset inflation that is much higher, 5 to 6 percent.
The Singapore government has long pursued a strong SGD to fight inflation. The trinity of inflation, interest rates & foreign exchange is supposedly linked by the PPP, purchasing power parity. However, for the short term PPP may not hold and distortions can persist for years. So, with our recent SGD weakening, we would see higher SGD interest rates instead ?
Some of my friends even suggest that the the Singapore government providing long running subsidy for local banks. Just consider this, local banks take in funds from depositors at less than 1 percent rate, and then invest in Singapore Government Securites, which depending on tenure, can yield up to 3.6 percent. Banks have to hold a certain amount of SGS anyway, as stipulated under MLA requirement from the central bank, MAS.
So, assuming 3 percent spread on say, 300mil, that's 15mil, almost risk free for the banks!
Regards
Investors in Singapore have no real safe alternatives to park their money and get a fair return if they don't want any risk. So, what is a fair return for keeping money safe? My feel is that, the return should at the very least offset inflation.
However, for far too long, savings/fixed deposit rates at banks here are ridiculously low. The last time I checked, POSB/DBS, fixed deposit is at around 0.45 percent to 0.75 percent, for most people, of course, depending on amount & tenure. This can hardly offset inflation that is much higher, 5 to 6 percent.
The Singapore government has long pursued a strong SGD to fight inflation. The trinity of inflation, interest rates & foreign exchange is supposedly linked by the PPP, purchasing power parity. However, for the short term PPP may not hold and distortions can persist for years. So, with our recent SGD weakening, we would see higher SGD interest rates instead ?
Some of my friends even suggest that the the Singapore government providing long running subsidy for local banks. Just consider this, local banks take in funds from depositors at less than 1 percent rate, and then invest in Singapore Government Securites, which depending on tenure, can yield up to 3.6 percent. Banks have to hold a certain amount of SGS anyway, as stipulated under MLA requirement from the central bank, MAS.
So, assuming 3 percent spread on say, 300mil, that's 15mil, almost risk free for the banks!
Regards
Electricity prices: 82% higher her than in Hong Kong
Paul Chan wrote to the Straits Times Forum about our electricity charges. Hong Kong residence pasy 17 cents per nit. Singaporeans pay 31 cents - 82% higher. Electricity in Singapore is more expensive than in USA or France.
What is happening? I recall these events but cannot remember the details:
1. Our power plants sold by Temasek to foreign shareholders?
2. Singapore hedged the price of oil, and are now stuck with the higher contracted prices?
I like to invite the knowledgeable people to put some details into what is happening here. You can also help to search Google for the facts.
What is happening? I recall these events but cannot remember the details:
1. Our power plants sold by Temasek to foreign shareholders?
2. Singapore hedged the price of oil, and are now stuck with the higher contracted prices?
I like to invite the knowledgeable people to put some details into what is happening here. You can also help to search Google for the facts.
Profit margin in creating the structured product
Comment posted in my blog
I am greatly sadden by the losses sufered by the HN5 investors. As an insider, I understand that the sale of high notes products was a highly profitable business for the bank. The product is doubly leveraged - the first-to-default risk and the underlying collaterialsed debt obligation.
Even in early 2007 where credit risk is severely underpriced, the return for the risk undertaken that is passed to HN5 investors borders on ridiculous. The bank keeps a fat margin.
I would suggest HN5 investors ask the bank to oepn its book on the structuring profit for high notes products.
Even if the bank refuses to compensate the 'non-vulnerable' investors, the bank should not be allowed to make money from them.
It also seems that the bank is not so truthful when they said that they were caught unaware by the collapse of Lehman Brothers. i understand that bank had bought CDS protection to hedge the bank's own exposure to Lehman, and have avoided trading with Lehman to reduce counterparty exposure as early as 1Q2008
I know this would drag DBS profit and shares price down further, but my guilt does not allow me to keep quiet.
REPLY
The Petition #1 ask the Government to investigate the creation and marketing of the products. In my supporting document, I asked the Government to look into the accounts for the structured products to see how much money is taken away by the product issuer and the marketeer.
I hope that MAS will pursue this matter. If not, I will ask a Member of Parliament to raise this matter in Parliament.
I am greatly sadden by the losses sufered by the HN5 investors. As an insider, I understand that the sale of high notes products was a highly profitable business for the bank. The product is doubly leveraged - the first-to-default risk and the underlying collaterialsed debt obligation.
Even in early 2007 where credit risk is severely underpriced, the return for the risk undertaken that is passed to HN5 investors borders on ridiculous. The bank keeps a fat margin.
I would suggest HN5 investors ask the bank to oepn its book on the structuring profit for high notes products.
Even if the bank refuses to compensate the 'non-vulnerable' investors, the bank should not be allowed to make money from them.
It also seems that the bank is not so truthful when they said that they were caught unaware by the collapse of Lehman Brothers. i understand that bank had bought CDS protection to hedge the bank's own exposure to Lehman, and have avoided trading with Lehman to reduce counterparty exposure as early as 1Q2008
I know this would drag DBS profit and shares price down further, but my guilt does not allow me to keep quiet.
REPLY
The Petition #1 ask the Government to investigate the creation and marketing of the products. In my supporting document, I asked the Government to look into the accounts for the structured products to see how much money is taken away by the product issuer and the marketeer.
I hope that MAS will pursue this matter. If not, I will ask a Member of Parliament to raise this matter in Parliament.
BBC radio documentary on structured products
Commemt posted in my blog
It is terrifying to hear from this bbc documentary that you have published on your site about reputable banks resorting to dirty tricks. I urge that this radio documentary to be heard by the public as it reveal many disturbing discovery.
http://www.bbc.co.uk/worldservice/documentaries/2008/10/081022_failure_or_fraud.shtml
Call to MAS - pass general guideline for compenstion
Comment posted in my blog
The only solution of this SAGA is to ask MAS pass the message down to ALL distributors to set general guideline for compensation.those are not happy can continue to take legal action later.Some buy from broker firms, the firms can argue that we send the brochure to you and you can decide not to buy. firms are only the distributer.We , singaporean always have this in mind, the FI dares to send such brochure to customers,the product must have been approved by MAS and safe. The product advertisement on newspaper is so BIG. It should be safe , espectially ,series by series continously, it should be safe.
The only solution of this SAGA is to ask MAS pass the message down to ALL distributors to set general guideline for compensation.those are not happy can continue to take legal action later.Some buy from broker firms, the firms can argue that we send the brochure to you and you can decide not to buy. firms are only the distributer.We , singaporean always have this in mind, the FI dares to send such brochure to customers,the product must have been approved by MAS and safe. The product advertisement on newspaper is so BIG. It should be safe , espectially ,series by series continously, it should be safe.
Husband's objection
Dear Mr Tan,
It is really kind of you to spend so much time and energy to help the unfortunate people who bought Mini Bonds and High Notes. My relationship manager from ABM Ambro too approached me many times to buy the Lehman minibond.
Do not let nasty comments discourage you and just focus on the truth. Many of us are greedy and I escaped the noose only because of my husband's objection.
EO
REPLY
You are fortunate to have a husband who is knowledgeable. Many people were badly advised by the sales representative and did not have a family member to advised them on the risk.
It is really kind of you to spend so much time and energy to help the unfortunate people who bought Mini Bonds and High Notes. My relationship manager from ABM Ambro too approached me many times to buy the Lehman minibond.
Do not let nasty comments discourage you and just focus on the truth. Many of us are greedy and I escaped the noose only because of my husband's objection.
EO
REPLY
You are fortunate to have a husband who is knowledgeable. Many people were badly advised by the sales representative and did not have a family member to advised them on the risk.
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