1) What is the likelihood that investors can salvage some value from the Minibonds or High Notes?
In my opinion, if the unwinding of the invesment structure is done properly, and the administrator seek the best possible value for the assets, there is the possibility of some salvage value. I cannot imagine that all the investments have no value now. I hope that the regulator will ensure that these unwinding is carried out properly and the interest of the investors are protected.
2) Should the distributors/financial advisers of these products, which include a number of banks and brokerage firms, be held accountable since Lehman has gone bankrupt? Can the investors of these structured products seek compensation from the distributors?
Section 27 of the Financial Advisers Act require the advisers to make appropriate recommendation to the client. They will fail in their duty to recommend a high risk product to an investor who is risk adverse. If the adviser is held to be negligent, the adviser is required to compensate the investor for the loss.
3) What is your advice to investors of Minibonds and DBS High Notes?
Prepare a statement about the advice that you have received from the adviser, even if it is a verbal advice. Look for written evidence, if available. Get together with other investors in similar situation. Lodge a complaint with the financial institution that sold the product to you. Be ready to take it to FiDREC (www.fidrec.org.sg) or the MAS.
4) Any retail products in the market which, in your opinion, are at risk and can go down like the Minibonds and High Notes?
There are several other credit linked notes, similar to Minibonds. They have dropped in value already. An investor fold me that the Pinnacle Notes have depreciated by 65%.
Maybank rep has told me that hsbc should be able to get back about 30% salvage value (if i remember correctly) out of my series 3 minibond.
ReplyDeleteIts disappointing to hear this though....
Most of these products do not have a secondary market. The issuer "does you a favour" by buying them in at a very low price.
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ReplyDeleteTo donaldson tan,
ReplyDeleteYour course of action of asking other singaporean to close their DBS/POSB account is not only going to be effective but "dangerous" to yourself.
1. Not many with POSB/DBS account would have purchased these toxic products.
2. Encouraging others to close down their POSB/DBS account is tantamount to sabotaging POSB/DBS business. You bet they will bring a lawsuit or even file criminal charges against you.
Have a proper perspective of the situation. Recover what you can. I would advise you to take down whatever anti POSB/DBS postings on any website.
Dear Mr. Tan,
ReplyDeleteI am confuse and loss now.
Can an Insurance product like GreatLink Choice from Great Eastern be considered a credit linked securities? Thank you.
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ReplyDeleteDear Mr Tan,
ReplyDeleteI am highly appreciative, personally speaking of your actions and efforts in providing an avenue of sorts to investors or non-investors alike who have invested or not invested but interested on this Lehman-linked investment loss.
While I do empathise or sympathise whatever it is, I am not pouring oil into fire, but just like to simply comment (permission assumed here), it really amazes me without logic and common sense, how Singaporeans can be so lackadaisical with their moneys.
I am no superb producer nor fantastic financial advisor with Manulife, I simply find it very hard to understand, pragmatic Singaporeans can invest in such difficult-to-understand-high risk products and can claim innocence (of course there are genuine cases of mislead here.
How about playing with match sticks and subsequently blame the manufacturer/seller of selling you a dangerous fire hazard.
Anonymous