Saturday, February 25, 2012

$1.1 billion subsidy for bus operators

Alex Au has written an interesting article about the funding of 550 buses to be given to the two bus operators. I share his concerns, i.e. why should the tax payers be funding the profit-making enterprises? Perhaps they should be nationalized. See

Simplify online banking

I wish to urge our banks to simplify their processes to encourage more people to use
electronic payment and more efficient ways of communicating their requests to the banks.

As a business customer of DBS Bank, I am required to login to my account with the following entries:
An organisation ID
A staff ID
A staff PIN or password
An internet banking token with 8 digits
The organisation ID and staff ID are provided by DBS Bank and are not easy to remember. I have to write them down on a paper. This is risky but I have no choice. Instead of enhancing security, this complexity is creating more risk.

I am also required to sign and post many types of requests to the bank. Surely, if I am able to make transfers of large sums of money after logging in my bank account, it should also be possible to use the login to authenticate my request, without the need for a manual signature?

My friend told me that he has never signed any request to his bank in England for two decades. He only need to enter his PIN number.

I suspect that some of the existing practices are mandated by the Monetary Authority of Singapore. So, I also urge the MAS to take the lead to simplify and improve the process.

Tan Kin Lian

Investment plan with high termination charges

Business Simulation Game (BEST)

I invite you to try the business simulation game at this website

Four games will be running each night (Singapore time) for the 
insurance, hotel and airline industry. You can try to learn the
strategy on pricing and marketing to get profitable results
in a competitive market.

There is a video on the home page that shows how you can play
this business game.

If you have played the game before, you will find that the
game has been modified to show a different set of products
and markets.

You have to register an account with your email address and 
password to participate in the business games. Do play the
game a few times to get the feel of the game and the strategy.

TABS is disruptive technology

An IT expert describes TABS (taxi automated booking service) as a "disruptive technology". This is a technology that changes a process completely.

Why? A normal taxi booking service is a "push system". The customer request is sent to the nearest taxi - while they are still moving along the road - and the first driver that respond gets the booking. When the customer arrives at the pick-up point, there is the risk that the customer is not around, i.e. "no show".

TABS uses a "pull system". The taxi driver uses TABS to "find customer" after dropping off the previous customer and before driving off. The driver sees the location of the 5 nearest customer, including the booking fee (or tip) that they are willing to pay on top of the taxi fare. If there is a customer close by that pays an acceptable fee, the taxi driver can call the customer by mobile phone to confirm the booking. This reduces the risk of "no show".

TABS will help to reduce consumption of petrol, road congestion and road accident - as the taxi driver does not need to look for a passenger on the road.

Currently, TABS has a weakness - the customer does not know when the taxi driver will accept the call. This is being addressed. The next version of TABS will allow the customer to know how many taxis are nearby. Right now, the customer can cancel the booking, if no taxi driver responds within a waiting time.

We will be monitoring the situation and will make adjustment for TABS to work well for both customers and taxi drivers. TABS is free for customer - not counting the tip that they pay to the taxi driver. The taxi driver does not have to pay during the next 3 to 6 months, when this system is being developed, At a later date, the taxi driver has to pay a monthly fee. Those who join later will have to pay a registration fee as well.

TABS card for commuters:
Terms of service:

Friday, February 24, 2012

Book a taxi with TABS - for customers

Foreigners represent Singapore in international convention

It is quite sad that Singapore males have to do National Service and foreigners are given scholarship, jobs and the chance to represent Singapore - and they have an advantage over Singaporeans because they do not have to serve National Service.

An opaque budget

Kenneth Jeyaretnam of The Reform Party wrote this article about the lack of transparency in our opaque budget.

I believe that the details of the budget are likely to be available in the documents presented to Parliament - so it is possible that KJ might have missed them. However, I do not know myself if this is the case, and will welcome views from other people who can do the checking for me.

Threat of defamation lawsuits

TABS can change the way that taxis are booked

I carried out research of taxi booking over the past two years and obtained these findings:

a) About 25% of commuters book a taxi (and pay a fee of $2.50 or $3.50); the other 75% stop a taxi on the road (because they do not want to pay a booking fee).
b) About 80% (my estimate) of the taxi booking goes to Comfort and Citycab taxis and 20% goes to the other taxi companies.
c) A Comfort taxi drivers gets 5 to 10 requests a day. Many of them complained about "no show" when they pick up a booking.
d) The taxi drivers of the smaller taxi companies hardly get any booking each day.

I have launched TABS (taxi automated booking system) and hope to achieve the following:

a) Get more passengers (i.e. the 75% that wait for a taxi on the road) to book a taxi with the $1 booking fee
b) Get taxi driver (other than Comfort) to use the system and get the calls that they miss out.
c) Reduce the "no show" rate, as the taxi driver can call the customer before going to the pick-up point.

TABS can change the way that taxis are used by commuters and taxi drivers. I hope that, one day, most taxi drivers will pick up passengers using TABS or other taxi booking service, and taxi drivers do not have to ply the road to look for customers.

Inefficient and wasteful processes

I have made a statement that the Government collects a lot of taxes and spend some of the money wastefully. I want to quote a few examples:

1. Posh office buildings and furniture
2. Management consultants and computer systems
3. Online processes that save time for civil servants but adds many times of the burden on the public
4. Creates a lot of work to give payback to the citizens as refund for the high tax collected, e.g. GST offsets, progress package, economic growth package and the like

The amounts spent on some of these items are staggering - tens of million of dollars on items that could be avoided.

It would be much better for the government to collect less tax (e.g, abandon GST), reduce the price of land for public housing and simplify their compliance requirements. This will reduce the cost of living, cost of doing business, and make a large impact on improving the lives of the people.

I want to recognize the good aspects of the government - i.e. managing an economy that provides jobs for the people. So, I am not want to appear to be giving a negative judgement on the government.  I only want to point out some areas of wastefulness and inefficiency that should be recognized and dealt with.

Tan Kin Lian

Taxi Fares is the cruz of the matter

This letter was sent to the Straits Times on 3 February 2012 but was not accepted for publication.

The Minister for Transport announced in Parliament that the Government will regulate the standard of service for taxi drivers but will not regulate the fares. I recall reading an editorial in the StraitsTimes which politely state that regulation of fares is "the crux of the matter".

I understand the reluctance of the Minister to regulate the fares as his Government has, for the past  many years, been promoting the advantages of deregulation of taxi fares to allow greater flexibility in the supply of taxis.  

I wish to suggest an approach that can solve the two conflicting goals:
  • The Government should regulate the fares for a basic taxi service that picks up passengers on the road or at taxi stands
  • Taxi companies can operate special services for customers that book a taxi at their call centre; they can set their own fares
This approach will allow the taxi companies to participate in the basic taxi service without  incurring the high cost of setting up and managing a taxi booking operation. It will be easier for  new taxi companies or even taxi cooperatives to be set up to run the taxi service - hence  achieving the goal of greater flexibility in the supply of taxis. The taxi cooperative may be able to serve the needs of the taxi drivers better.

Commuters will also benefit as the fares for the basic taxi service can be used as a benchmark to decide on the taxi company to choose for call a taxi. Tourists will not be baffled by the myriad of taxi fares and surcharges.

Tan Kin Lian

Simplify Online Processes

This letter was sent to the Straits Times on 1 February but was not accepted for publication.


Many government agencies have implemented online process for the public and business entities to submit their requests  and compliance returns to the agency.

These online processes can impose a heavy time burden on the public, for the following reasons:

1. The websites of the agencies are complicated. It can take a long time for the  public to be familiar with the webpages, links and options. Reading the FAQs  can also be a headache, due to the complicated processes. 

2. Some online forms require a specific type of browser to be used. If another browser is used, the results can be unpredictable.

3. Some processes require many steps and ask for information that are not available at the point of data entry. It is easy to miss a step and have the  process aborted.

4. If there is a weak internet connection or the server is busy, the online  process can be suspended. 

5. The public usually needs to call the helpline for clarification and wait a long time for the call to be answered. 

It is ironic that the online processes, which are supposed to improve national productivity, produce the unintended consequence of increasing business cost. By saving of a few minutes of data entry time of its own staff, the government  agency requires the administrative staff of the business entity to spend much more time to make an online submission.

I have personally experienced the online process of various government agencies,  and can attest to the hours that have to be spent by me and my staff to submit a  simple request or return. 

I suggest that our government agency allow the public to submit their requests and compliance returns by faxing the completed manual forms to the agency. It will actually save time for the agency to get its staff to do the data entry, rather than spend the time to guide the public to do the  same work. It can save hours of the time of the public.

Tan Kin Lian
Tan Kin Lian & Associates Pte Ltd

FISCA website - useful articles for consumers

The FISCA website contains several useful articles for consumers. It is update daily. Go to 

TABS report for 23 Feb 2012

1982 customers and 121 taxi drivers have registered into TABS (taxi automated booking service).
To book taxi, use the browser of your mobile phone and go to
For taxi driver, download a app from Apple App Store - look for TABS.

I saw a customer submit a test request with the name "A Tester: please ignore it". This is a good way of testing the system and allows the taxi driver to ignore the message. 

Hacking and invasion of privacy

The wife of the former British Prime Minister has sued a newspaper for hacking into her telephone. I suppose that this is an invasion of privacy. In a similar suit, the newspaper had agreed to pay damages to another plaintiff. Details can be read here:

I wish to extend this case to a familiar situation in the Internet world. If a person uses the ID and password to "hack" into the account of another user, this act of hacking is similar and may be subject to the same consequences. Many people may not realize that invasion of privacy can be a serious matter.

I wish to highlight this case. I hope that our lawmakers and law enforcers will also help to promote a better understanding of the legal position.

Thursday, February 23, 2012

Register identity before posting comments

TR Emeritus (or Temasek Review) is well known for hosting anonymous comments that are strongly anti-government. Recently, the editor received letters from lawyers acting for PM Lee Hsien Loong and chairman of Fraser & Neave Lee Hsien Yong concerning alleged defamatory remarks posted in their website.

The editor apologized and agreed to delete these comments from the website. But, it was a tiresome task as there were many comments posted, including new comments that were posted after the legal letters were received. The editor believed that the new posting were done mischievously to get the website into trouble.

There was a suggestion that the website may have to get commentators to register their identity before they are allowed to post comments.

The days of unrestrained and anonymous comments in websites and blogs may soon be over. If TR Emeritus gives in and adopts this registration process, other websites are likely to follow their approach.

Reduction in maturity payout

A consumer bought a 21 year child education policy. On maturity of the policy, the payout was 26% short of the initial projection. The consumer asked my view, if this was reasonable. He was aware that the projected maturity proceeds was not guaranteed.

In my view, the reduction of 26% was too much, considering the circumstances over the past 21 years. The projected yield on the take-up of the policy was 5% and the final yield was 2.6%. 

He told me that he a similar experience with another policy for his elder son, taken with another insurance company. The company agreed to give him a higher payment following his complaint.

I am quite disturbed by the following practices:

a) a big reduction in the maturity payout
b) to adjust the payout after a complaint

I hope that the regulator is looking into this practice, and make sure that consumers are treated fairly. If they are going to cut the payout by a large amount, the insurance company should not be allowed to pay high salaries, commissions and expenses.

An economic slowdown?

I met a property agent who markets the commercial space in Midview City. He told me that the property market has slowed down somewhat.

When I drove to office and returned home yesterday, I saw that the road was rather empty, which was unusual. I asked my colleague if there was some special reason, e.g. a festival, but he could not think of any. He did agree that the road was not crowded.

I went for a haircut today, and the barber's shop was empty. The barber told me that it was after the lunar new year. Strange, I though that the new year was more than a month ago.

I read that Singapore Airlines is reducing its cargo capacity by 20% due to lack of demand.

All these are signs of a possible slowing down of the economy. Any observations to share? 

Exchange of views in this blog

In this blog. I wish to share my views on a variety of issues that are of interest to my readers, such as financial planning, investment and social issues.

I welcome readers to my blog to share their views, even if these views are different from my views. In doing so, there is no need for them to challenge my view, criticise my views or pass judgement on my views or character.

If they wish to ask me to explain my views, it is only polite that they give their actual names. If possible, they should also give some background to explain their reason. I do not like to "speak" to an anonymous person.

There are some people who dislike my views so strongly that they feel that it is justifiable to insult and attack me personally and they do so while remaining anonymous. I consider their behaviour to be despicable. There is a simple solution for people who dislike my views - they do not need to visit my blog.

I welcome the positive exchange of views from most readers of my blog and ask these people to bear with me as I deal with the harassment from some other people.

Consumption tax

GST (or VAT value added tax) is one type of consumption tax. The other type of consumption tax is sales tax. I do not like both types of taxes. I prefer to have income tax, even a flat rate tax, instead of consumption tax. Between GST and sales tax, I prefer a sales tax as it can be applied more selectively, e.g. sale of luxury goods. GST is the worst among all the options. That is why I write against GST. Read this article for my views:

IRAS replies to my suggestion on GST

Here is the reply from IRAS to my suggestion on GST

I have posted this comment in the TodayOnline website:

I thank Claire Chua for giving me a reply, although I am somewhat disappointed with the reply. I suggest that Claire Chua gets her colleague, who is the GST expert, to contact me by email ( and engage in a discussion with me. A discussion has to be two way.
In her reply, Claire Chua has missed these three important points:
1. If the Finance Minister is giving $5,000 to help small companies, why not give the small advantage suggested by me, as the cost to the government  is small and the impact to the small business  is large.
2. Businesses have to keep a separate record of the GST inputs and outputs and have to show the amount separately in the tax invoices. The administrative cost is quite significant. I know, as I am involved in the work.
3. A small company supplying goods and services to a GST registered company has to reduce the price to remain competitive, and they have already incurred the GST on their inputs, which they cannot claim back. This is a serious disadvantage that compel small companies to register for GST, when they do not have to, and to incur the cost of compliance. Even IRAS finds it a nuisance to handle these small companies - based on the "body language" shown in their processes.  [Tan Kin Lian]
I found her e-mail address from the Singapore Government Directory and sent this message to her:
I invite you to ask your colleague (GST expert) to call me at 66599611 or reply to me by email to have a discussion on this matter. Do not just give a reply without understanding the issue that has been brought up.

TABS for taxi drivers

I saw a request by a customer in West Coast who was willing to pay $5 for a taxi booking. This is available to any taxi driver who logs in to "Find Customer" in TABS. A taxi driver who is nearby can call the customer to confirm the booking, before driving to the pick up point (i.e. avoid "no show").

If the customer is too far away, leave the customer to another taxi driver who is nearer to the customer. Log in again after your next trip and see if there are any waiting customer that is nearby.

The best time for a taxi driver to "Find Customer" is after dropping off the previous customer and before moving off. The taxi driver is NOT interrupted by TABS when he is driving the taxi.

To use the TABS, a taxi driver needs to have an iPhone and download "TABS" from the Apple App Store. This service is free for 3 months. The Android version of TABS (for taxi driver) is available in March.

Customers do not need to download any app to book a taxi. They can use the browser and go to Customers have the choice of paying $1, $3 or $5 for booking.

Investing in Government Bonds

Investors have to be careful before they put their money in Government bonds. Read why in (click on Information). Or click here:

Consumption tax

Is it better to have a value added tax (such as the GST in Singapore) or a sales tax? My answer is - none of them. Let us move back to a tax on income.

Cost of medical care for an elderly person

What is the cost of medical care for an elderly person in Singapore? Find out from an article posted in FISCA website, (click on Information).

Wednesday, February 22, 2012

Land banking - another problem?

Compare Singapore and Canada

Wing Lee is a Singaporean who has migrated to live in Canada. He make this comparison of tax in these two countries.

Try $1 booking fee to get a taxi

If you want a taxi and is not willing to pay the booking fee of $2.50 or $3.50, you can try TABS (taxi automated booking service).

You can use the browser of any smart phone (i.e. Apple, Android, Windows, Nokia or Blackberry) and go to the webpage, Note - you do NOT need to download an app.

You enter  your name, mobile number and pick up point (i.e. postal code or address) and choose a booking fee of $1. You may be able to get a taxi driver to pick you at your pick-up point (i.e. home or office) for $1. Give it a try.

If no taxi pick up you within 10 minutes, you can go to the roadside and try to stop a taxi or your can re-submit your booking with a fee of $3 or $5.  The details from the previous booking are remembered on your browser, so you do not need to re-enter name if they are the same as before.

Invest in ETF - the good and bad

Dear Mr Tan,
I know you are advising your blog readers to invest in ETF as it is safer and their returns are better than savings in banks over the long term.

I received the following message from OCBC Securities regarding probes on ETFs and failed trades.  I have not invested in any ETF yet and am not quite sure how the following mail will affect the investment in STI ETF.  Please advise if you have the time to spare.

The STI ETF (from SPDR and Nikko) are pure ETF with no leverage and no deriviatives. They are safe. Other ETFs are to be avoided (unless you are familiar with them).

Please attend the talk on "Investing in shares, REITS and ETF" conducted by FISCA. See (click on Events)

Investing in property - the right way

Property investment has produced a spectacular return over the past four decades in Singapore. Will it be a good investment for the next two decades? The answer is “maybe, yes”, but you have to approach it in the right way.

Go to and click on Information tab. This article is available for reading by the public.

Secret lives of Singaporeans

Silver housing needs

E-Filing of ECI (Estimated Chargeable Income)

IRAS required me to file the ECI within 3 months of the close of the financial year. I had first to finalize my financial accounts. I approached a few accounting firms, but they are too busy handling too many accounts and their charges are quite high (for a small company). But I am not complaining, as they do have to spend a lot of time with troublesome requirements and filing procedures.

As my accounts are ready, I logged in to MyTaxPortal in the IRAS website. This is not easy for a newbie, but having file my GST returns for the past year, I became quite familiar with the complicated process.

Finding the ECI form was quite a hassle. There must be over 100 forms in the IRA website and they are hidden under different layers of links.

With some trouble, I found the ECI form and saw the webpage (see below). I was asked some difficult questions, such as "does your company qualify for tax exemption" and "what is your tax rate? I was confused with the two columns for 17% and 10%. These are matters that IRAS can check from their records, but they expect the public to know.

Anyway, I managed to file the ECI form. It is useful for IRAS but an added burden to a small business (and this is one of many burdens).

10 mins to complete a form?

I have to submit a return for an association to IRAS. The form stated that it takes 10 minutes to fill up. That is correct. But what IRAS did not realize is that it can take hours to understand what is really required and to gather the information that they asked for (which apparently includes information that is unnecessary or "just in case it is needed").

I had difficulty in getting the NRIC, date of appointment and contact number of the three office bearers. Why do they need this information?

I also have to breakdown the income of the association according to voting and non-voting members. We organize talks that are attended by members and the public. It is near impossible to carry out the breakdown. I decided to declare them as all from non-voting members, and would be willing to pay more tax - provided that IRAS does not bring me to jail for making a false declaration.

I also have to complete details of the dividend income according to various categories. Fortunately, my association did not have any such income.

There is a tendency for our government agencies to ask for more information than is really needed. They do not realize that it takes time to gather the information and adds to the operating cost.

Develop express and feeder services

In Budget 2012, the Government is setting aside $1.1 billion for the purchase of 550 buses and to meet their running cost for the next 10 years. I wish to suggest that the budget for public transport be used in the following ways:

  • Provide express bus services to operate between the major bus interchanges in the town centers, with minimal stops along the way
  • Provide feeder services to operate with the towns to provide a fast, low cost and convenient way to bring the residents from their homes to the trains stations or bus interchanges and back home
  • Consider the use of the small buses for the feeder services
  • Allow the the express and feeder services to be operated by a wider selection of operators and not be restricted to the large listed companies.
  • Regulate the fares on these services as a significant share of the cost is funded by the government

This new public transport infrastructure can complement the existing services by bringing commuters to the transport hub and can also act as a backup in the event of major disruption of our train services. By providing a viable alternative, it can also put competitive pressure on the existing operators to moderate their fare increases in the future.

If this new infrastructure makes it difficult for the existing bus operators to run viably, the Government can modify the vehicle and ERP charges for public transport to achieve a level playing field.

Increase bus capacity - what is going on?

The Government is setting aside $1.1 billion in the budget to pay for 550 buses and the cost of operating them for 10 years. A news report suggested that they will be "persuading" the bus operators to increase their bus frequency and service levels.

I do not know why the Government is giving so much money to profit-making bus operators and still have to "persuade" them. It will also be difficult to regulate the fares, to reflect the funding given by the tax payers and achieve the "revenue neutral" approach stated in the news article.

The news article could be wrong but it could also be right. So far, there is no official announcement from the Government on how the money will be used. This type of communication, through leaked news reports had been adopted in the past to test the public reaction.

It is better for the Government to use the $1.1 billion budget to set up a bus network to complement the train and provide express services between the town centers. I will give more details of my suggestion in a separate posting.

Tuesday, February 21, 2012

Book taxi for $1

TABS (taxi automated booking service) allows you to book taxi for a booking fee of $1. This is more convenient than stopping a taxi on the roadside.
You can book the taxi using the browser of any mobile phone (
Some taxi drivers may be willing to pick up the customer for $1, if the customer is nearby. It is better than sweeping the road to look for a customer (no booking fee).
Try it.

Differences between a general statement, a judgment and personal attack

Many Singaporeans may not be aware of the differences between the three types of situations described below:

1. Making a general statement
If I say, "Many Singaporeans have a negative mindset. They look at what is wrong, rather than what is right". This is a general statement, and is not targeted at any specific person. It does not imply that all Singaporeans behave in this manner; it recognized that some Singaporeans are different, i.e. have a positive mindset.

2. Making a judgment
One makes a judgement when it is targeted at a specific person or a specific issue. I avoid making judgment, as I do not have the relevant facts and it would be presumptuous to make a judgment without being invited. If I am invited to make a judgment, I would like to talk to the relevant parties and hear them out, before arriving at a judgment. This is called "natural justice".

3. Making a personal attack
This goes beyond making a judgment of a person. It is a direct attack of a person and have a negative connotation on that person's character or reputation. It can be defamatory and have resulted in legal warnings or actions being taken by political leaders.

Because these people cannot tell the difference between the three situations, they may feel offended at a general statement (believing that they are the target of the statement) and will freely make judgment of other people (in inappropriate situations) and even make personal attacks. They take these actions under the safety of anonymity. They do not even realize that these are cowardly and despicable actions.

To avoid these negative behavior, it is best that a person should give his or her views with the actual name, and be held accountable for the views. When they ask our political leaders to be transparent and accountable, they should set the same example to be accountable for their views.

I hope that this general statement is not offensive, and that my readers will accept it in the right spirit of frankness.

Tan Kin Lian

Monday, February 20, 2012

Taxi Booking (TABS 5)

If you use an iPhone, please go to Apple App Store to download TABS 5. The earlier version (TABS 4) has been replaced.  TABS 5 can be used by taxi driver or customer.

Powerpoint presentation here:

Taxi booking

I like to ask customers to try the taxi booking service ( If there are some bookings, the taxi drivers may be more encouraged to join the service. You can try a booking fee of $1. You do not have to rely on this service alone, as there are not sufficient taxi drivers at an early stage, so you can try other waiting at the roadside as well.

Let all purchases be GST-deductible to help smaller companies

Printed in TODAY paper on 20 February 2012

I APPRECIATE the Budget payout of up to S$5,000 to small companies to offset higher business costs, especially the simple approach to determine eligibility for this grant.

Could the Finance Minister consider another measure that would help not only small companies but also bigger businesses?

The Goods and Services Tax (GST) Act allows a business with annual turnover of under S$1 million to be exempt from paying GST. This seems to help a small business but is actually a disadvantage.

When a non-GST registered company supplies goods or services to a business, the latter is not allowed to deduct the purchase from its GST liability. The small business is compelled to reduce its price by the GST amount to remain competitive.

It would help small companies if a business customer is allowed to treat all its purchases as eligible for GST deduction, regardless of the supplier's status. This would not significantly dent GST revenue.

This would also benefit the entire business community by eliminating the need to issue tax invoices and keep a separate record of GST credits from eligible suppliers. The saving in accounting work and compliance cost for the economy could be significant.

This suggestion would need to be worked out in greater detail, but I believe that it is worth the effort to take a new look at our GST administration.

Tan Kin Lian

Taxi Booking (TABS) statistics for 19 Feb 2012

Total customers logged in yesterday: 57
Total taxis logged in yesterday: 47

Total customers registered yesterday: 47
Total taxis registered yesterday: 26

Sunday, February 19, 2012

Vitamin Account (6 yrs equity linked structured deposit)

My friend invested $40,000 in the Vitamin account issued by a local bank in October 2005. He received a payout of 4% at the end of 1 year but there was no payout for the next five years. On maturity, he received back only his principal. The total payout was 4% for 6 years or only 0.7% per year.

According to this structured product, the payout in subsequent years is calculated on the following formula:
Potential payout rate = the average of the annual returns of all 18 shares for each potential payout date where the annual return in relation to each share for each of the potential payout dates is (a) 4%, if that share is one of the 15 best performing shares or (b) individual stock return
I am an actuary, and I do not understand the logic of this type of formula. I can figure out the calculation but NOT THE LOGIC. It seemed that the creator of this product was allowed to write the formula in any way that he wanted - without regard to logic or fairness. This is much worse than gambling in a casino. At least, in the casino, the gambler is able to calculate the odds and the spread.

In this type of structured product, which was approved for sale by the Monetary Authority of Singapore, it is almost impossible to calculate the odds. The empirical evidence in the past years has shown that the financial institutions had made billions of dollars from these types of products, and the investors had got a very poor deal. No wonder, the financial institutions around the world have been cursed by the ordinary people.

If he had invested the money in the Straits Times Index through a ETF, he would have obtained an appreciation of 17% for the period, plus a dividend payout of about 15% for the 6 years, giving a total payout of 32%  (compared to 4% from the Vitaman account). What vitamin!

Taxi Booking (TABS) statistics for 18 Feb 2012

Total customers logged in yesterday: 100
Total taxis logged in yesterday: 45

Total customers registered yesterday: 87
Total taxis registered yesterday: 40

Blog Archive