These two articles about Lehman Minibonds “victims” came out in the Singapore papers today. I think it’s a good thing that journalists are picking up the story and helping to generate more awareness about the topic.
Today Paper: Investors Turn to the Web
Business Times: Move to help Lehman “Victims” Gather Pace (Accessible only after 6pm)
I understand that CNBC will also be doing a special clip about investors who have been “burnt” from buying such credit linked derivatives.
While the outcome (how much they will lose) for current Minibond holders is still very much unclear, at least the increased publicity from the press will help to educate more people about the dangers of such structured products and prevent something similar from happening again.
10 comments
Neo says:
September 25, 2008 at 4:45 pm (UTC 8)
So much grieves, headaches and sleepless nights have been caused to poor ordindary folks by the Lehman Minibonds and DBS High Notes series. Some have almost lost their life time savings. To prevent such occurences in the future, MAS should vet and scrutinize all Pricing Documents, Prospectus, etc.
Relationship managers who push the sales must be able to expain the structures, pricing, risks and of the products they sold. It is definitely not sufficient for the relationship manger to sell the structured products by comparing the rewards against interest on savings account and fixed deposit and saying that these are low risk risk products.
sufferer of minibomb says:
September 25, 2008 at 6:37 pm (UTC 8)
if mas controlled too tight then no longer free market and if everyone keep money in fixed deposit – how is our economy going to grow…(this will be the excuse i bet – even though i do not have background in finance or banking)…
jay says:
September 25, 2008 at 5:58 pm (UTC 8)
To prevent this from occurring in the future…
RM Education – So that they can explain the workings of the products properly. Maybe they should be certified as well (if they are not already)
Investor education – So that they should not put their whole life savings on sructured products (especially if they don’t understand how it works themselves).
mewdeedi says:
September 25, 2008 at 6:29 pm (UTC 8)
v v upset with the govt n MAS. Spore definitely need a stronger opposition party. maybe then they will seriously look into our plight like HK govt.
jay says:
September 26, 2008 at 9:40 am (UTC 8)
In fairness, MAS is doing a decent job in keeping the whole banking system afloat. These structured products are just a small piece of the pie.
Imagine if the whole banking system dies and even the Fixed Deposits areat risk. That will be a major disaster.
Conman Brothers says:
September 27, 2008 at 8:10 pm (UTC 8)
The whole structured products are not just a small piece of pie for the S’pore Economy if you know $500million alone was sunk into MiniBonds by Singaporeans and there are still DBS High Notes, Pinnacles Notes, Jubilee Notes not included. They would total over $1 billion and a significant negative impact on the S’pore economy as affected people naturally react by cutting their spending which will affect on sectors of economy. Your job will be affected too.
Kenneth says:
September 28, 2008 at 12:18 am (UTC 8)
I added up the Minibond series for 1, 2 and 3 to be USD227.75 million based on Minibond Pte Ltd letter on 15 Aug 08.
My is Minibond 3 and I am expecting it to default on 02 Dec 08.
Whatever help given, I can only pray MAS and HSBC can perform some miracle or the HK MAS judicial sided the investors and Sgp has to do likewise. It is a tough battle against the banks.
As of now, however we argue on the grounds of misrepresentation, I believed the banks will use the prospectus to claim that responsibilities lies in the investor reading the prospectus.
Even if MAS find the banks guilty of misrep, it will only be a fine. Even if they return all the commission, it will still be PEANUT when compare to our lost.
The values of the Notes could be only 30% or less given the securities in USA is crashing.
Just hope the best and prepare for the worst and continue to read this site for some good news, if any.
Cheers,
VSL says:
September 26, 2008 at 10:08 am (UTC 8)
Sg does not have, and probably will not have, the social culture of HK citizens. In times of crisis, HKMA is in the driver’s seat. Their prime objective is to protect investors’ interests. MAS is a back seat passenger. It’s objective is to protect FIs interests so as to build a world-class financial centre.
I doubt MAS will come down hard on the FIs. At most a few thousand $$$ fine. Otherwise foreign FIs will pack their bags and leave. Then sg won’t be a world class financial centre anymore.
investor education pls. says:
September 26, 2008 at 2:46 pm (UTC 8)
Good logic there about the comparison of motivations between MAS and HKMA.
But in any “world class” financial center, investors should be “world class” as well. They should be “in the know” about the products and know about the risks involved. They should be smart enough not to trust the bankers 100% as there is no free lunch (they always have something up their sleeves). High yield = higher risk. I think a lot of people here just look at the rate and go for it and take the RM’s word for granted thinking that the law is with them. They should know that the law is with the Banks most of the time because they painstakingly drafted the prospectus, with the help of lawyers, where all the risked are specifically stated (most of the time). This document is specifically created to take the liabilty away when something goes wrong. We should start to be street smart in the world of finance.
I think MAS should invest in investor education going forward.
Joe-The Retiree says:
October 19, 2008 at 8:13 am (UTC 8)
Hi lioninvestor,
All my fellow retirees are suffering in the year 2008…..many are caught in the free falling Equity Markets, some in Unit Trusts and the thousands in Lehman Brothers Minibonds and other structured deposits besides LB……..And if you see the news and newspapers everyday, all they want is MAS actions………MUST ACT FAST! or else how to live with anxiety and the stress as some or rateher I am also a victim of the Equity Market fall that just suffering paper loss only with some hope at the end of the day!