Thursday, July 23, 2009

Hong Kong : Final Minibond Settlement Out!

"The vast majority of them will be able to get back 70 percent or more of their original investments" - Financial Secretary John Tsang. [Link]
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A vast majority of Singapore investors got back 30% or less of their investments and many got nothing back. Out of a total of $520M invested in Singapore, the compensation was $107M less than 20% of the total amount[Link]. Singapore investors now have to seek the legal route for redress and that will be a painful journey.
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Minister Lim Hng Kiang explains it best why and how we ended up with this outcome:
"The process has not been overly legalistic and is not subject to political pressure. This way we serve the interests of all parties, and also serve the wider public interest of growing Singapore’s reputation as a credible and reliable international financial centre" - Minister Lim Hng Kiang in parliament.
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I would like to thank Minister Lim for making it all so clear to everyone what the PAP govt is about. The govt serve the interests of all parties - ordinary Singaporeans being just one of the "parties". I thought they are called People's Action Party ...the word "People" is right in front sometimes makes you think that the common people are a priority above everything else and "Action" seems to tell us they will act primarily for the people. So now we know. That the interest to grow as an international financial centre takes precedence over the need to ensure that justice is served shows the rule of money in our society. They will pursue money be it investments or profits at the cost of expediently pushing aside ideals of justice and equity.

49 comments:

sgcynic said...

"They will pursue money be it investments or profits at the cost of expediently pushing aside ideals of justice and equity."

Pragmatism has always been the guiding principle and hallmark of this party. That's why it's a term with negative connotations in Singapore. Ideals and principles are but means to an end I guess. Uniquely Singapore!

Anonymous said...

Maybe we should rename People's Action Party as "All Action Party", since they fight for the interest of all, people and businesses alike.

Anonymous said...

Kudos to HK!

If not for the indirect pressure applied on our own government by HK's fierce action to help their own affected investors, it would be a near certainty that NONE of the affected investors in Singapore will even see a single cent back.

We are pro-business, remember?

Majullah Singapore Inc!

Anonymous said...

I am one of the many who received nothing for compensation.

starlight

Anonymous said...

They actively scr*w the people.
Think the name is correct.

Anonymous said...

I guess now Singaporeans will think twice about investing any of their savings is such structured products market by the banks considering the government no care a single hoot about it if the bank lost in the investment.

Anonymous said...

The problem is these ministers are not afraid of loosing their votes during the election.

skeptic said...

Moral of the story. If you have money to invest, invest it in Hong Kong.

Anonymous said...

Allow me to rant here. Here are the things that made frustrated over the past week....

1.CPF Annuity Life. It is compulsory, right? Read in the news paper that under CPF Act, we can paid nothing and the Minister can decide how much to be paid. Doesn't sound very fair to me!!!

2.Act to be amended so that Law Minister can legally appoint lawyers without going through panel. I considered to be regressive. Just imagine the happenings behind the scene.

3.I used the CTE at about 9.50 pm on one night and realised that there are ERP charges on the CTE til 10 pm. (I scrambled to insert my cash card) Really don't understand the logic and objective of it. Even there is huge traffic at that time, over time, people would also choose other routes home if they find that there is constant jam there.

Anonymous said...

funny that in singapore, the banks get protected. They also get tax breaks from the govt if they move their financial centres here.

In my mind, of all the industries and sectors in the economy, banks should be the last people who should get any form of break.

International financial Centre - should it protect people or protect the banks? Tough question indeed.

and if you look at the private banking sector, the policies are geared towards protecting the high-net worth folks.

SO...yes, it has become clear what the priorities are. its MONEY!

Anonymous said...

I think when push comes to shove, Singaporeans really must open their blinkered eyes when they are standing in front of the ballot box.

Continue to cast your vote for the lightning bolt and get ready to be screwed for more good years.

It is time for us to stand up to the tyranny and exercise our right as a people with voice.

Vote wisely, is all I call for.

Anonymous said...

anyway, as a flip to the argument, all these also clearly shows how small and insignificant we are.

We need to do all these to keep banks and FIs happy, for them to continue doing business on our shores, at the expense of the citizens, to keep singapore economically vibrant.

Anonymous said...

Lucky,
Can you share your thoughts on the CPF Life? Like what Anon 1008 commented.. I think it is like one of those linked products going by what Gan Kim Yong says. No capital guarantee, payout depends on many variables..

Thks

LuckySingaporean said...

anon 23/7/09 10:19,

I have some ideas on the CPFLife and I'll put them together with the lease buyback.

The fundamental aim of the CPF Life was to see us through old age because the PAP govt claimed that we will be luving longer. However, what good is a scheme that does not even guarantee the payment amount and vulnerable to inflation. This is just another tweak of the CPF that locks our money up longer but does not ensure adequacy of seeing us through our old age.

The whole CPF should be reformed. We should do what other competent govts do instead of locking up the minimum at a low fixed return. Hire the best managers to manage the money properly so that it will be adequate for retirement later on - that is what almost what every pension fund in the world does including Malaysia's EPF. Contrary to what the govt tells us, locking money up at a fix rate is completely unsafe and makes us all vulnerable to inflation. The PAP govt endangers us so that the GIC can borrow the money for investments from the CPF. It is very unkind, unjust and ultimate unfair to the ordinary folks who are now asked to work until they are frail and old.

Anonymous said...

Ministers are not afraid to lose your votes because they know you are too afraid to vote against PAP.

If you vote against PAP, you will bring instability to Singapore. If you vote against PAP, you will get incompetent government. That is what the Straits Times been telling us for the past few decades.

So, why would the ministers be afraid of losing votes? At least the banks can vote with their feet, if we make the banks liable for cheating and misleading for their "structured products".

Anonymous said...

you want more? LKY has pointed his middle finger at you and said: you went in with open eyes.

the pap is just good at bullying its own people. Those 66.6% are really big-time sabo king.

Anonymous said...

For those who want to understand why the MAS and the government protect the banks so much is because the banks have been given them large protection money. You know the kind of money you give to outsiders to ask for protection.
You call even call it bribery since most of the money land up for high-paying gahmen. Beside when the bank earns, it generates high GDP to which to determine the coffer's pay.

Anonymous said...

@Lucky

U realise that whatever you do, it will be preaching to the converted. i.e
Any1 with more than 2 brain cells.

The other 66% wil believe anything the msm says. I mean your beloved Khaw is almost certain to win by the widest margin in the next election. Followed closely by the beloved Mah (of the HDB, ERP fame).

Anonymous said...

If the foreign banks are unhappy with Singapore government decisions, they will downsize or pull out altogether. That would put a dent on Singapore's ambition to be one of the world's main financial centre.

The people of Singapore on the other hand are stuck with PAP government. Those who can leave (i.e. migrate) don't really need their CPF anyway.

Hong Kong government are not worried about being harsh on foreign banks because these banks want to be at China's doorstep. They have some operations in Shanghai but the bulk of their activities are still based in HK due to the many legal restrictions on the Mainland.

In the end, it's a matter of who needs who more. HK know they have more cards in their hands to play with so they are prepared to lean hard. Singapore cannot afford to do the same for obvious reason. Both governments are pragmatic, it's just that theirs have more bargaining power.

Anonymous said...

To anon 12:18,

Like that, they can be harsh on DBS bank what, of course we know majority of DBS bank shares is owned by who, at the end of the day, like what you said, they can only be harsh on Hong Leong.

Anonymous said...

23/7/09 12:18 Anon.

Singapore caters more to south east asia and the financial market here is worth many billions. To pull out because they have to compensate millions more is not something the banks will do. Even Wall Street journal, as unwilling as they are, decide to pay damages to LKY so that they can keep their market here. As long as the banks can earn money here, they won't pull out or reduce their business here.

However what you said is true, given the choice of helping a few thousand dispensable peasants and the elites that run the banks, the government would rather choose the elites. The votes of a few thousand peasants are negligible. Besides they can rely on the good old fear mongering to get votes - who knows maybe those who get cheated by banks will even vote for PAP next time!

Anonymous said...

People in HK took to the streets to protest and demonstrate. HK People will vote out politicians for this minibonds fiasco.

Singapore people dare not take to the streets to protest. Singapore people dare not vote out PAP.

No wonder most Singaporeans won't get their money back. No wonder Singapore politicians totally bochup this issue.

Singaporeans get what they deserve.

Anonymous said...

What HK do is their problem. Doesn't mean we have to follow HK compensation plan.

Anonymous said...

Yeah! Our Singaporean plan is far better than HK's.

I am sure Singaporeans are thrilled by the fact that for the same crappy structured products, they got back far less than affected investors in HK.

Anonymous said...

How come when profit is made, no one complain?

Anonymous said...

How come when PAP loses money in Wall St banks and sinking funds, no PAP minister makes a sound?

Anonymous said...

that's way it is the same rite? why make noise if you lose money? what's lost is lost.

Anonymous said...

I think the Singapore Gahmen know the people here very well.

They know what they can or cannot do to ensure that next election outcome will be no different from last election.

The way the Minibond is settled here is an example of a "can do".

There are many "can dos" too. Need another essay or posting to describe it.

soojenn said...

"What HK do is their problem. Doesn't mean we have to follow HK compensation plan.

By Anonymous, at 23/7/09 18:06"

Sure what HK do is their problem...no none is saying that Singapore has to follow this compensation plan. The problem here is that the Singapore government is doing pittance in comparison to what HK did for their people, and would have been even worse if HK has not done this much. The bottom line is that they have not taken the interest of the minority investors and merely paying lip service - no punitive penalty for the misbhaving FI's, allowing them to get away with making pittance in comensation, and then coming out to claim that they have done their best?

Anonymous said...

Singapore's PAP Government will standby those Banks they licensed TO CHEAT the commoners.

The PAP Government paid millions to Mediacorps to tell Singaporeans to seek medical treatment early for flu. (PAP propaganda)

This is what i got from a worried mother

""NTU Student was feeling terrible 3 am this morning and called her Dad. Student's Dad asked her to call ambulance. guess what the ambulance reply? Unless u cannot walk or stand, then they will come.

So this morning Student's Dad fetched her to the h1n1 clinic n they did not even give her medicine. just tell her to go back n monitor the fever and if bad, go hospital. so evening go hospital and doctor say go home n rest. Student's Dad ask them to check if got h1n1, they say they cannot check. gave some medication n ask the mto go back n if fever dun subside in 3 days, then go back to hospital again! So irresponsible, right?""

Anonymous said...

Does the NTU student has medical conditions? So big still act like baby. Time to grow up. Symptoms of flu and fever must dial ambulance? The mortality rate of N1H1 is only slightly higher than the common seasonal flu. Let's not waste resources. NTU somemore...sigh..how she/he made it there?

Anonymous said...

There are 4 parties in Singapore: the Party, the Company (ie Singapore Inc, Temasek and GIC, etc), the People and the Family.

There are inherent conflict of interests, with probably the Family's interests reigning and overriding all things, which is in turn closely tied, if not integral, to the Company's.

The Party is not only the People's but also the Family's and the Company's too. Thus the need to meet "all" parties' requirements.

The Party has some power to challenge the Family and Company, but it is also rather entangled with the Company.

Last and least and almost forgotten is the People, without any power - castrated and prostituted - and are just digits in the economic calculations, which are, naturally, designed for Company's objectives. (eg the IR is nothing for the People but all for the Company.)

And when Party says people are our only and most precious resource, they mean any people in the world, and may not be talking about you.

(And as quality, like IQ, is naturally a bell curve, to depend on a skewed curve as an economic strategy, will naturally be unsustainable.)

So if you are not Family, then next best is Party. You are not deemed smart if you are just the People.

But of course, in theory, the People is the State. But that may be entirely meaningless, an irony repeated every year on 9th Aug.

Anonymous said...

So why would i buy investment products in SG under the pro-FI MAS? How to go about investing in HK? Must I fly to HK personally to open account?

Anonymous said...

"What HK do is their problem. Doesn't mean we have to follow HK compensation plan.

By Anonymous, at 23/7/09 18:06"




Are you still in secondary school? Back in '08 HK and Taiwan are the first to guarantee bank deposits. And within a week Spore quickly followed suit.

Anonymous said...

watch you say Lucky, "They" could make your life difficult when you are being so "frank and direct", and I really hope to carry on reading your Blog, not many left to tell us things as they are now.

K

Anonymous said...

"Are you still in secondary school? Back in '08 HK and Taiwan are the first to guarantee bank deposits. And within a week Spore quickly followed suit"

By Anon 23/7/09 22:49

Sorry to disappoint you. I am not in Secondary School. Way past that.

That's the point. If it is for the well-being of Singapore as a whole, than we should follow and that doesn't mean that we should follow blindly for this case. Let's not be myopic. The impact of not giving the guarantee during 08 will have big impact on Singapore in general if funds begin to flow out. The recession will not be so mild like now.

Kudos to the gov for taking the risk here by not matching HK compensation plan eventhough we may risk to loose some future investors like Anon 22:43.

Anonymous said...

@Anon 23:35

Well being for Singapore as a whole? Are you f*cking kidding?

GDP may go up, but what about GDP per capita? GDP per capita per hour worked?

And where did the distribution go? Do you call GDP growth progress if 70% suffer worse standard of living as a result?

I'm sorry. This minibond saga just shows that to woo foreign investors, to grow gdp, our government would not mind prostituting the average citizen.

Anonymous said...

Oh btw,

Not even a prostitute will claim that sex with multiple partners can 'diversify' away HIV risks.

Some banks like DBS essentially did just that. Lower your risk by 'exposing to a vast array of solid banks', while silently having a first-to-default clause on their CDS.

Buay Tahan said...

To Anon 23:35,

Hey... i feel your argument is way off... are you a clonie of the pappies?
Based on your arguments, everything must be based on pragmatism? Everything must be based upon monetary rewards and gains?

In this case, just because the banks are worth more than the people, the government should and must side with the banks, despite the facts that the banks are clearly in the wrong as well?
Where is the social justice then?
Are you suggesting that the government should act in this manner, forsaking social justice for monetary gains? Then what difference is there between bandits and governments?

I am totally surprise by such one sided argument. And to think that you are not in secondary school puzzles me even further...
If you continue to think in this kind of manner, I hope you will face some kind of social injustices... and I would like to see your response when someone tells you that... oh... it is your only fault to have step on the toes of the rich and elite.

Anonymous said...

@Lucky

Must say u are one ungrateful bugger given that u are in the top 10% and one of the few actually benefitting from the PAP policies...

Anonymous said...

@Buay Tahan

U will be surprised. Anon 23:35 is obviously educated and therefore he strongly believes he is smarter than u and therefore he is correct (according to his textbooks he could be).

Unless u have Ivy League creds ...

Anonymous said...

Hi All,

I'm based in HK.

Have a read of BOC and what they did.
http://www.bloomberg.com/apps/news?pid=20601087&sid=anj.l5ZzaIUQ

and guess what.. HK stock market rose yesterday after banks agreed to pay back.

Confidence has risen, and more China liquidity flowed into the market.

Look at Singapore, who tries to attract China through our Mandarin policies, easy foreign talent immersion, etc etc, and protecting the banks rather than the people in this minibond issue.

Did our market gain confidence?

The results speak for itself.

Anonymous said...

when is china going to give us a pair of pandas as a gift?

Anonymous said...

why are the ministers and top officials being paid millions for...if they're not going to handle feedback and complaints?

Buay Tahan said...

To Anon 10:39,

Yes... the results speak for itself... and it further shows how short sighted and shallow Anon 23:35 is.

When he says funds will flow out if we are to compensate the people, he conveniently forgets that why the banks are here in the first place... They are here to tap the massive market opportunities in SEA.
In order to tap these people, a good system must be in place to ensure potential investors that their concern will be well taken care of.
Hence, by not compensating the minibonds victims will definitely result in a huge dent in the confidence of these potential investors, as well as the present investors... hence the end results is more likely to be net funds outflow.
As long as the market opportunities are there, do you think that banks is likely to let this piece of fat meat go away just because they are being force to compensate the minibond victims?

Anonymous said...

From Anon 23:35 to all,

Hey, those comments are just my personal view and based on my observation on SG as a whole. Cinema, shopping malls, property launches etc. are full. Cannot be supported by just 30% of the same people all the time right?

Yes, there are people not doing as well, but please remember that this is happening all over the world. If you think our bank is bad, what about those investment banks that created this mess in the first place? What happens to millions of American who lost their $$?

Who says our market not moving? Just look at the run for the last 7 days and the property market.

I am not sure about the people here but if you have been diligent enough, you would have made some good money ;-). Any idea why i still post at 23:35?

Anonymous said...

@ Buay Tahan

Well said! MAS is being a penny smart pound foolish...

They are losing big $$$ from Chinese investors not only HK is near China, their policy of protecting investors are much better..

Look at the mess SGX created that allow sub-standard China companies to go listed and then go bust the folowing years...

Now the minibond thingy put another dent in Singapore investment scene...If government still thinks that protecting investors is not impt, wait till US economic picks up...funds will flow to US & in asia Hk...Singapore would be out of the billions $$$ picture...

haiz...

Anonymous said...

Consumer protection is very important, especially if you are a high net-worth investor. Who on earth would want to invest their money in a place where money once cheated or lost, can't be claimed back in full?

Look at Oei Hong Leong. If he was misled or given wrong advice as he alleged, and he can't get back his money, than other rich folks would be spooked off too.

We can't have consumer protection laws that only protect the rich and not the poor. Anyway, if the law doesn't protect the poor, then it won't protect the rich either, especiall if the rich goes against someone else who is even richer and more powerful.

Anonymous said...

i dot understand..when they needed money, jus raise the 'toilet fee' lar or add more tax to water, then add ADDITIONAL GST to tax on water again lar...tax on tax..is so easy to make the money, give first then take back again mah...this way, they good pple sure win election mah,u kow, just 'toilet fee' how much they can make? think how many toilet bow u have lar...!