Lehman Brothers Equity-linked Notes

The Securities and Futures Commission (SFC) and the Hong Kong Monetary Authority (HKMA) announced today that an agreement has been reached with Standard Chartered Bank (Hong Kong) Limited (Standard Chartered) in relation to the bank’s distribution of equity linked structured notes issued and guaranteed by Lehman Brothers (LB ELNs) (Notes 1&2).


Without admitting liability, Standard Chartered has agreed to make a repurchase offer to eligible customers (Note 3) holding an outstanding LB ELN distributed by Standard Chartered. The total value of the repurchase offer is estimated to be approximately HK$1.48 billion and will cover over 95% of the outstanding transactions in LB ELNs by Standard Chartered customers.


Read
http://www.sfc.hk/sfcPressRelease/EN/sfcOpenDocServlet?docno=11PR19


My comments
I hope that the regulators in Singapore will follow the example of Hong Kong and take similar action against banks that distribute products that are unsuitable for consumers.

Real estate funds lost value

A Chinese educated investor met me today. She was led to invest in two financial  products by a bank relationship manager on the promise that it was capital guaranteed and had the potential of a good return. After three years, she lost 40% on the investment and found that it was not capital guaranteed. The investor said that she was not aware about the product, as it was in English.

I found out that she had invested in two real estate unit trusts. I was surprised that these two investments lost 40% of the value during the past three years, when the global real estate and stock markets had recovered from the downturn.

I suspect that the investment banks that created the two real estate funds could have put in bad assets at inflated values - which accounted for the large loss. This is an example of the risks of investing in funds that could be created by dishonorable financial institutions who wanted to get rid of their bad assets to unwary investors.

The bank who mis-sold these financial products offered to cover half of the loss "out of goodwill". The investor asked for my views on whether she should accept this offer. I advised her to accept the offer as the decision from FIDREC is likely to be less favorable. She does not have any evidence of the misrepresentation of the product.

Lesson: it is best to avoid funds where the creators of the funds may have some bad assets to offload to investors. These institutions are quite willing to act dishonorably.

Eggs and nuitrition

Here is an article, purported to be written by the top nuitritionist in Malaysia, about the benefit of eggs. TKL Website - Latest.

SGEP Editorial

Read the SGEP editorial at www.easyapps.sg/sgep.
The last editorial was on 3 March. A new editorial will be updated soon.
There is an archive of past editorials in SGEP information tab.

Looking for a job?

Post your brief resume in Easy Ads for free. Give your postal code and your expected salary. A prospective employer will contact you. This is suitable for people who are interested in part time work near their homes.

PAP enters the digital warfare

There is an article in SGEP that the PAP has entered the digital warfare. I have experienced this event in my blog. Here is what has happened.

I created a survey on "voting at the General Election 2011". I asked the respondent to give one vote per person and to provide their true identity. However, there is no way for me to prevent repeated entries, as I was using Google Forms. All went well during the first day. I received 150 responses. They appear to respect my request for honestly. About 10% were in favor of the PAP, 70% were against and 20% were undecided.

This was followed by 50 consecutive replies that were in favor of the PAP. These replies were submitted by the same person, and were about 30 seconds apart. I decided to close the survey, due to this sabotage. It is digital warfare and done dishonestly.

Click here for the specific SGEP article.

Tan Kin Lian

Good customer service - online team

The Times of the UK shows how to provide good customer service and improve productivity at the same time. Our government agencies and commercial organisations can implement this simple idea. Read TKL website - Latest or  or click here.