Dear Mr. Tan
I am also hit by DBS High Notes 5 (ST Sept 18 news). My relationship manager persuaded me to have lunch and showed me the product. He reinterated that it was a very safe investments as all the fund principals are all A rated.
I signed for $X. As I was busy, I trusted him and signed on the form. When Lehman's bankruptcy appeared in the news, I immediately called the relationship manager and was shocked to be informed that there will be zero payout.
I was not told about this and was only shown a copy of the prospectus but not given one. I would be grateful if you could advise me where can I make a complaint.
REPLY
You can lodge a complaint with MAS.Your complaint is about the conduct of the adviser (i.e relationship manager of the bank) for failing to disclose proper explanation about the product. Read my blog:
http://tankinlian.blogspot.com/2008/09/monetary-authority-of-singapore.html
Dear Mr. Tan,
I applaud your determination to help us, the helpless and disappointed investors who have dumped in thousands of dollars of our hard earned money into High Note 5. I hope MAS will take actions against the bank and its employees.
I am also affected but through the Minibond product I bought from Maybank. I cannot claim to be some old folk that I did not understand the terms and conditions. Moreover, the product was bought before the sub-prime crisis developed and at that time, the possibility that one of the big international bank linked would go bankrupt as in the words of the RM, is "almost impossible." Reading the DBS case and comparing with mine, I wondered why Maybank did not contact me until last Friday to tell me the news, that the residue amount is 30+ odd cents per dollar. I put in $20K and so lost almost $14K. Very painful lesson.
ReplyDeleteNow I worry about the 100K I put in for a DBS notes product linked to Capitaland Mall and the term 'credit event'. Probably going to have 3 sleepless years because this is a significant part of my mother's money and she trusted me on that action.
Oh, so sorry!!!!
ReplyDeleteLet's revise Chinese wisdom I did during PRIMARY SCHOOL:
以盲引盲A blind man guide others blind men to fall
eg 1. Salesperson sold a NEW financial product usually he/she is not sure of its context.
eg 2. Misleading econ indicators & market advise.
Pleae read
"Wall Street: The Dark Theory"
http://money.cnn.com/2008/09/19/news/economy/siklos_shadowstats.fortune/index.htm?postversion=2008091915
eg 3. During "The Big Leap" (a China econ reform program) in
1959-1962, PM Zhao produced
3 set of econ reports:
1 set fake report for Chairman Mao
1 set fake report for Media
1 set real & secret report for self use.
Million Chinese peoples starved under communist regime!
Today and tomorrow, small investors worldwide starve under free econ market system !
YOU NO NEED A FINANCIAL GURU OR MBA, YOU WILL NOT STARVE IF STUDY CHINESE WISDOM AT PRIMARY SCHOOL LEVEL. THERE IS ALSO WIDOM IN ANY OTHER CIVILIZATION.
If you are going to have sleepless nights for 3 years, then the more appropriate solution is to call up DBS.
ReplyDeleteAsk what is the value of the note and any penalty if you redeem now.
Do your own calculation and see whether the loss is worth the 3 sleepless years.
Investors feel twice as much pain in losses when compared to the pain of not getting more profit. But sometimes, it is better to consider the risk and reward and do the appropriate thing.
Is it worth the promise of 5% for a potential loss of 70%? (Just an example but Not in relation to the note.)
i think it's unfair to complain to the world if you had been too trusting or have not done your due diligence.
ReplyDeleteyour relationship manager is a salesman. i don't think he lied to you when he told you that the investment is very safe.
if you wanted someone to explain the prospectus to you in detail, you will have to speak to a lawyer.
Theoretically an "A" credit rating is safe. Historical default rates are not that high. But it does not rule out the possibility of default. So we were just unlucky to experience a company with an "A" defaulting.
ReplyDeleteSpeaking of credit ratings, it might be that the model that the agencies use are broken. It seems that a government of a 3rd world country with a rating of "B" has less risk of defaulting than Lehman with a rating of "A" at the current market environment.