Tuesday, October 14, 2008

The Online Citizen

Visit The Online Citizen for news about Singapore
http://theonlinecitizen.com

Coverage of the events at Speaker's Corner and interviews with investors:
http://theonlinecitizen.com/2008/10/more-than-1000-people-at-speakers-corner/
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2 comments:

Unknown said...

Your protest made the Wall Street Journal.

http://online.wsj.com/article/SB122392022175029223.html?mod=googlenews_wsj

Hong Kong in (Mini)bondage
It might be tempting for governments to step in to ease investor pain after a bad few market weeks, but that doesn't make it a good idea. Hong Kong's government seems to be losing sight of that fact.

The territory is in the middle of a controversy over "minibonds," derivatives marketed to retail investors. Small investors, who were sold the products by their banks, allege they were conned into buying investments they thought were as safe as bonds but with higher returns. In reality, the securities were a complex bundle of assets and have plunged in value after the bankruptcy filing of their underwriter, Lehman Brothers. The Securities and Futures Commission says it vetted the prospectuses to make sure the higher risks were properly disclosed.

There's intense political pressure to "do something." So far the territory's banking regulator, the Hong Kong Monetary Authority, has received more than 9,000 complaints related to these products, into which Hong Kongers had poured roughly 15 billion Hong Kong dollars ($1.9 billion). Last week, Financial Secretary John Tsang and Financial Services and Treasury Secretary K.C. Chan stepped in to pressure banks to buy minibonds back from investors to cut investors' losses. Meanwhile, some legislators have been participating in protests outside bank offices and leading meetings between investors and bank executives.

This is a far cry from the spirit of "positive noninterventionism" that has traditionally guided Hong Kong's economic policy. Key to that is allowing individuals to thrive or fail on their own. It sends a bad message, to businesses and investors alike, to see officials and lawmakers piling on to "fix" investments gone awry.

The minibonds were also marketed heavily in Singapore, where roughly 8,000 people bought bonds worth around 508 million Singapore dollars ($342 million). Some of those investors formed a highly unusual protest at the Speakers' Corner Saturday to vent their ire. The Monetary Authority of Singapore so far is focusing on the question of whether minibonds' risks were properly disclosed.

A similar investigation on disclosures is under way in Hong Kong. Barring banking improprieties, however, the investors may just have made unlucky bets. Unless Hong Kong's government intends to bail out every investor or resolve every private-sector dispute, it would be better to stick with another dose of nonintervention.

October 14, 2008 4:09 PM
Anonymous said...

Ang moh reporter trying to defend Ang moh banks. Would he say the same if this thing happened in USA?

October 16, 2008 12:01 AM

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