Wednesday, November 12, 2008
Unexpected surge - 700,000 visitors to my blog
Two months ago, I projected that my blog will reach 500,000 visitors by the magic date of 11-11-2008. I did not forsee the crisis with the credit linked notes - which caused an unexpected surge in visitors to my blog. This magic date passed yesterday. The visitorships passed 700,000 (40% more than 500,000) today. This is just for historical record.
Trustees act to terminate the swaps
http://www.mas.gov.sg/news_room/press_releases/2008/Actions_Taken_to_Protect_Interests_of_Noteholders_of_the_Lehman_Minibond_Notes_Programme.html
IN A move to protect Lehman Minibond investors, the trustee HSBC Institutional Trust Services has taken action to terminate the swaps for series 1 to 8 notes in the programme, said the Monetary Authority of Singapore (MAS) on Wednesday.
'This removes the risk of credit events in the underlying securities and helps to preserve the value of the underlying collateral,' said MAS in a statement.
'This action is not necessary for series 9 and 10 as the underlying securities for these notes are corporate bonds and have no swaps.'
MAS said it has been informed of the steps taken by HSBC 'in view of the current market conditions'.
The statement said the trustee has appointed three partners from PricewaterhouseCoopers
Singapore (PwC) as receivers for series 5 to 8 which have defaulted since the relevant coupon payments were not made by the due dates.
The other series would also default if the relevant coupon payments are not received by the due dates and the relevant grace periods have lapsed.
The trustee would then appoint the three PwC partners as receivers for these series.
The receivers' role is to take control of the assets of these notes and to work closely with the trustee towards a solution which is in the best interests of noteholders, said MAS.
The trustee and the receivers have assured MAS that they have not ruled out any restructuring proposals received from interested parties and that these will be explored for all series of the notes.
To provide noteholders with an independent opinion on the options that best serve their interests, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser on the Lehman Minibond notes programme.
MAS cautioned that restructuring the Minibond notes programme is a complex exercise which entails the agreement of several parties and resolution of challenging legal issues.
It would also need noteholders' approval.
'These steps will take time. The receivers would also have to take into account the risks to noteholders, including the continued credit and market risk to the underlying collateral,' said MAS.
'Hence, whether a viable restructuring proposal will materialise depends on several factors which are not within the control of the trustee and the receivers.'
MAS added that it understands that noteholders are anxious to know what they should do and what to expect next.
'At the moment, there is no action required on their part. MAS and the trustee will continue to keep noteholders updated on all developments including any options for them to consider,' it advised.
'MAS has asked the trustee to work towards providing noteholders with an update on whether restructuring is still a viable option by the end of the month at the latest.'
Mr Heng Swee Keat, Managing Director, MAS, said: 'MAS has been in close consultation with the trustee and receivers.'
'We believe that these are reasonable and appropriate steps for the trustee to take to protect the interests of noteholders given current market conditions.'
He added that the appointment of the independent financial adviser is also an important step to ensure that noteholders' interests are served'.
Mr Heng added: 'Our work on other fronts, on the formal inquiries and in seeing to the serious and impartial process of handling investors' complaints, is progressing. We will provide updates at the relevant juncture.'
IN A move to protect Lehman Minibond investors, the trustee HSBC Institutional Trust Services has taken action to terminate the swaps for series 1 to 8 notes in the programme, said the Monetary Authority of Singapore (MAS) on Wednesday.
'This removes the risk of credit events in the underlying securities and helps to preserve the value of the underlying collateral,' said MAS in a statement.
'This action is not necessary for series 9 and 10 as the underlying securities for these notes are corporate bonds and have no swaps.'
MAS said it has been informed of the steps taken by HSBC 'in view of the current market conditions'.
The statement said the trustee has appointed three partners from PricewaterhouseCoopers
Singapore (PwC) as receivers for series 5 to 8 which have defaulted since the relevant coupon payments were not made by the due dates.
The other series would also default if the relevant coupon payments are not received by the due dates and the relevant grace periods have lapsed.
The trustee would then appoint the three PwC partners as receivers for these series.
The receivers' role is to take control of the assets of these notes and to work closely with the trustee towards a solution which is in the best interests of noteholders, said MAS.
The trustee and the receivers have assured MAS that they have not ruled out any restructuring proposals received from interested parties and that these will be explored for all series of the notes.
To provide noteholders with an independent opinion on the options that best serve their interests, MAS has appointed Deloitte & Touche Corporate Finance Pte Ltd (DTCF) as an independent financial adviser on the Lehman Minibond notes programme.
MAS cautioned that restructuring the Minibond notes programme is a complex exercise which entails the agreement of several parties and resolution of challenging legal issues.
It would also need noteholders' approval.
'These steps will take time. The receivers would also have to take into account the risks to noteholders, including the continued credit and market risk to the underlying collateral,' said MAS.
'Hence, whether a viable restructuring proposal will materialise depends on several factors which are not within the control of the trustee and the receivers.'
MAS added that it understands that noteholders are anxious to know what they should do and what to expect next.
'At the moment, there is no action required on their part. MAS and the trustee will continue to keep noteholders updated on all developments including any options for them to consider,' it advised.
'MAS has asked the trustee to work towards providing noteholders with an update on whether restructuring is still a viable option by the end of the month at the latest.'
Mr Heng Swee Keat, Managing Director, MAS, said: 'MAS has been in close consultation with the trustee and receivers.'
'We believe that these are reasonable and appropriate steps for the trustee to take to protect the interests of noteholders given current market conditions.'
He added that the appointment of the independent financial adviser is also an important step to ensure that noteholders' interests are served'.
Mr Heng added: 'Our work on other fronts, on the formal inquiries and in seeing to the serious and impartial process of handling investors' complaints, is progressing. We will provide updates at the relevant juncture.'
SCMP:Approval ratings of finance chiefs drop
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=M9PLL02UTS62&linkid=a2ab012b-27ad-4bc4-8fa5-6dae21f8a038&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
12 Nov 2008
Financial Secretary John Tsang Chun-wah and Secretary for Financial Services and the Treasury Chan Ka-keung, key officials handling policies relating to the financial meltdown and the Lehman Brothers minibonds saga, have both suffered significant falls in their approval ratings. In the latest University of Hong Kong survey on the popularity of top government officials Professor Chan’s approval rate fell by 8 percentage points last week, down from 33 per cent early last month, the most significant drop in approval ratings when compared with the other 11 ministers. Mr Tsang’s approval rating dropped by 5 percentage points, down from 41per cent early last month.
12 Nov 2008
Financial Secretary John Tsang Chun-wah and Secretary for Financial Services and the Treasury Chan Ka-keung, key officials handling policies relating to the financial meltdown and the Lehman Brothers minibonds saga, have both suffered significant falls in their approval ratings. In the latest University of Hong Kong survey on the popularity of top government officials Professor Chan’s approval rate fell by 8 percentage points last week, down from 33 per cent early last month, the most significant drop in approval ratings when compared with the other 11 ministers. Mr Tsang’s approval rating dropped by 5 percentage points, down from 41per cent early last month.
Rebuttal to "invest with your eyes open"
Dear Mr. Tan
Thank you for your invitation and organizing the petition.
In case you are addressing the audience and making rebuttal to the statement by our leader on the remarks “with their eyes open” I would like to point out that if an investor is prepared to take such a risk, i.e. to lose their entire principal sum they would opt for so many other investment that pay much higher then 5%. I myself has been led to believe that my only risk is not getting the coupon if the said companies is in default.
J
REPLY
It will be more effective if you write directly to the government leader who made the remark, or write to the newspaper who reported this remark.
Thank you for your invitation and organizing the petition.
In case you are addressing the audience and making rebuttal to the statement by our leader on the remarks “with their eyes open” I would like to point out that if an investor is prepared to take such a risk, i.e. to lose their entire principal sum they would opt for so many other investment that pay much higher then 5%. I myself has been led to believe that my only risk is not getting the coupon if the said companies is in default.
J
REPLY
It will be more effective if you write directly to the government leader who made the remark, or write to the newspaper who reported this remark.
SCMP:Legco probe best hope for minibond mess
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=F7GHF78RW806&linkid=7d193dd3-7937-410d-8020-6bc03178e4f0&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
12 Nov 2008
Chris Yeung is the Post’s editor-at-large. chris.yeung@scmp.com
Two days ago, before the scheduled Legislative Council vote today on whether to invoke special powers to investigate the Lehman Brothers minibonds saga, local banks mounted a counter-lobbying drive. In full-page newspaper advertisements on Monday, they stressed their commitment to “offering practical, transparent and fair solutions” to address the difficulties faced by more than 40,000 Hong Kong investors affected by Lehman’s demise.
It did not mention the Legco vote, but the writing is on the wall: the last thing they want is to be summoned to the legislature to give evidence on the Lehman case.
Also on Monday, finance functional constituency legislator David Li Kwok-po urged members to vote down the motion. He warned that, if it were passed, it would allow Legco to exercise “unlimited” powers over banks. It would set a bad precedent and might undermine the status of Hong Kong as an international financial centre, he added.
Banks, he said, would also have to stretch their resources for the Legco hearings at the expense of handling the buy-back efforts.
Privately, senior government officials have cautioned that a Legco inquiry would “put banks on public trial”.
If an inquiry goes ahead, banks might put the buy-back process on hold, according to one official. Banks fear they would be under pressure at the public hearings to divulge details of their business strategies and practices, the official said.
In view of the quasi-judicial nature of an independent inquiry and the style of Legco politics, their fears may be justified.
There is no denying that such an inquiry would further complicate matters and raise more uncertainties about the minibonds row. It may create tension that is not conducive to mediation and arbitration.
But, while the arguments against an inquiry carry some weight, the case for an investigation should not be dismissed lightly.
From a broader perspective, a full Legco probe could arguably help the banking industry, whose image has been tarnished by allegations of fraud, at worst, and misselling, at best, over the sale of Lehmanrelated products.
It would also allow the Monetary Authority and the Securities and Futures Commission, as well as the relevant policy bureau, to give detailed accounts of their respective roles and responsibilities.
Doing so would help set out a full picture for the affected investors and the general public so they could judge who, if anyone, should take the blame. More importantly, the investigation process would help identify faults in the regulatory system and make recommendations for improvement.
With their reputations at stake, there is no reason to believe banks would deliberately stall resolving this dispute because of a Legco inquiry.
Now that independent experts are tasked with assessing the value of the products, investors should feel assured that the findings would not be affected.
In view of the demise of Lehman and the plunge in the value of its investment products, a considerable number of the 40,000plus affected investors might not get what they want from the buy- back exercise. A feeling of injustice may prevail. If left unattended, their grievances could turn to anger and feelings of betrayal.
Undoubtedly, an early settlement between banks and investors is important. But, as the row has already damaged the authority and credibility of political and financial institutions, failing to seek a solution through a fair and open inquiry would be unjust.
The media and the public should ensure that Legco’s investigative powers do not go unchecked, to minimise any unintended consequences – such as probing too deeply into the operation of banks, or damaging business confidence.
12 Nov 2008
Chris Yeung is the Post’s editor-at-large. chris.yeung@scmp.com
Two days ago, before the scheduled Legislative Council vote today on whether to invoke special powers to investigate the Lehman Brothers minibonds saga, local banks mounted a counter-lobbying drive. In full-page newspaper advertisements on Monday, they stressed their commitment to “offering practical, transparent and fair solutions” to address the difficulties faced by more than 40,000 Hong Kong investors affected by Lehman’s demise.
It did not mention the Legco vote, but the writing is on the wall: the last thing they want is to be summoned to the legislature to give evidence on the Lehman case.
Also on Monday, finance functional constituency legislator David Li Kwok-po urged members to vote down the motion. He warned that, if it were passed, it would allow Legco to exercise “unlimited” powers over banks. It would set a bad precedent and might undermine the status of Hong Kong as an international financial centre, he added.
Banks, he said, would also have to stretch their resources for the Legco hearings at the expense of handling the buy-back efforts.
Privately, senior government officials have cautioned that a Legco inquiry would “put banks on public trial”.
If an inquiry goes ahead, banks might put the buy-back process on hold, according to one official. Banks fear they would be under pressure at the public hearings to divulge details of their business strategies and practices, the official said.
In view of the quasi-judicial nature of an independent inquiry and the style of Legco politics, their fears may be justified.
There is no denying that such an inquiry would further complicate matters and raise more uncertainties about the minibonds row. It may create tension that is not conducive to mediation and arbitration.
But, while the arguments against an inquiry carry some weight, the case for an investigation should not be dismissed lightly.
From a broader perspective, a full Legco probe could arguably help the banking industry, whose image has been tarnished by allegations of fraud, at worst, and misselling, at best, over the sale of Lehmanrelated products.
It would also allow the Monetary Authority and the Securities and Futures Commission, as well as the relevant policy bureau, to give detailed accounts of their respective roles and responsibilities.
Doing so would help set out a full picture for the affected investors and the general public so they could judge who, if anyone, should take the blame. More importantly, the investigation process would help identify faults in the regulatory system and make recommendations for improvement.
With their reputations at stake, there is no reason to believe banks would deliberately stall resolving this dispute because of a Legco inquiry.
Now that independent experts are tasked with assessing the value of the products, investors should feel assured that the findings would not be affected.
In view of the demise of Lehman and the plunge in the value of its investment products, a considerable number of the 40,000plus affected investors might not get what they want from the buy- back exercise. A feeling of injustice may prevail. If left unattended, their grievances could turn to anger and feelings of betrayal.
Undoubtedly, an early settlement between banks and investors is important. But, as the row has already damaged the authority and credibility of political and financial institutions, failing to seek a solution through a fair and open inquiry would be unjust.
The media and the public should ensure that Legco’s investigative powers do not go unchecked, to minimise any unintended consequences – such as probing too deeply into the operation of banks, or damaging business confidence.
Tuesday, November 11, 2008
Morgan Stanley hotline for Pinnacle notes
Dear Mr Tan,
I called my distributor OCBC secruities many times to check the reason about Pinnacle Note for the distressful price, but the only thing they can tell me is to wait for the Q& A, and I never get it until now after many weeks chasing.
I have to make many calls and finally I found Morgan Stantly has set up two hot lines for Pinnacle Note holders. I asked MS people why they didn't tell us the hot lines which can address our concerns. They should understand how flucstrated their holders are facing now, but they just to say they are waiting for us to find these hotlines. Is it make sense? If they did not publish it or inform their distributors the hot lines but wait the investors to find it by ourselves. What kind of service it is?
The hotlines for Pinnacle Note holders are : 68346510/68346512, and it only open from 9:00am to 12:00am.
A desperated investor
I called my distributor OCBC secruities many times to check the reason about Pinnacle Note for the distressful price, but the only thing they can tell me is to wait for the Q& A, and I never get it until now after many weeks chasing.
I have to make many calls and finally I found Morgan Stantly has set up two hot lines for Pinnacle Note holders. I asked MS people why they didn't tell us the hot lines which can address our concerns. They should understand how flucstrated their holders are facing now, but they just to say they are waiting for us to find these hotlines. Is it make sense? If they did not publish it or inform their distributors the hot lines but wait the investors to find it by ourselves. What kind of service it is?
The hotlines for Pinnacle Note holders are : 68346510/68346512, and it only open from 9:00am to 12:00am.
A desperated investor
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