http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=F1QJNO2RI9J2&linkid=d00bf96d-c7e9-49c5-935e-470eb087254e&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
11 Jan 2009
Yvonne Tsui
A 69-year-old woman and her daughter-in-law are seeking a full refund and damages from the Bank of China (Hong Kong) over their losses in Lehman Brothers minibonds.
Chin Yee-ching, a retired woman living in Malaysia, and her daughterin-law Chan Lai-mei, who lives in Po Shan Road, filed a writ in the High Court against Bank of China (Hong Kong) on Friday.
The bank is accused of being negligent in failing to “ correctly and accurately disclose and explain the real nature and structure of the product” and the true risk involved in their minibond investments.
Minibonds are not corporate bonds, but consist of high-risk creditlinked derivatives. They are marketed as a proxy investment in well-known companies.
In the writ, the pair also allege the bank failed to provide sufficient information and time for them to consider and make investment decisions about the products.
It said that Ms Chin and Ms Chan were approached by Cheng Kit-yee, a bank officer at a branch in Connaught Road Central, and Ms Cheng persuaded them to buy a series 35 minibond.
The claim said Ms Cheng told Ms Chan that the minibond was very low risk and the interest yield was good. Ms Cheng allegedly told her that the product was just like a time deposit and was very safe, while the interest was a little bit higher.
Ms Chan then agreed to early uplift of her US dollar fixed time deposit of US$ 80,000 so she could buy the minibonds, and Ms Cheng helped her apply for a waiver of the early uplift penalty. The writ said Ms Chan further agreed to use HK$ 400,000 savings to purchase the minibonds.
Having allegedly suggested the product was low risk and a conservative investment, Ms Cheng advised Ms Chin to invest her HK$1.48 million savings in minibonds.
However, another bank officer, Kenneth Lam, informed the pair in late September that the collapse of the American bank on September 15 affected their minibond investments.
Saturday, January 10, 2009
Yield during the Great Depression of the 1930s
Dr. Money wrote in The New Paper:
For example, if you bought US shares in 1929, it would have taken 28 years – until 1957 – before you got back all your investment. Other markets have taken even longer.
It is true that stocks earn 10 per cent against 3 per cent for bonds – in the long-run. But that can be very long.
Here is my perspective.
For example, if you bought US shares in 1929, it would have taken 28 years – until 1957 – before you got back all your investment. Other markets have taken even longer.
It is true that stocks earn 10 per cent against 3 per cent for bonds – in the long-run. But that can be very long.
Here is my perspective.
If you buy shares now, when it has dropped 50% and it takes 28 years to reach its previous peak (i.e. 100% gain from the current price), the effective yield is 2.5% per annum. If it takes a shorter time to reach the previous peak, the yield will be higher than 2.5% per annum.
SCMP:Deadline issued for investmen
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=I3SLL39DTVA5&linkid=4f97714b-ad98-4e5a-8667-07964f5d0135&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
10 Jan 2009
Enoch Yiu and Maria Chan
The Hong Kong Monetary Authority told banks yesterday to implement seven consumer protection measures concerning the sale of investment products, and to formulate plans to separate their deposit-taking and retail securities business before the end of March.
The measures are part of a range of proposals suggested in separate reports disclosed on Thursday by the authority and the Securities and Futures Commission on last year’s Lehman Brothers minibond fiasco. On the same day, Financial Secretary John Tsang Chun-wah ordered “an immediate review” of Hong Kong’s financial regulatory structure.
The authority sent a circular to all banks yesterday requiring them to immediately add “health-warning” statements to their sales material on retail derivative products to warn of their risks. It told them to immediately introduce adequate controls to ensure sales staff were not solely rewarded for sales performance.
By the end of March, banks must instal audio systems to record client conversations on investment products sales, as well as introduce a “mystery shopper” programme – in which undercover staff monitor the behaviour of those selling investment products.
In addition, the authority told banks to formulate plans to separate their deposit-taking and investment products sales functions. Both reports said it was a conflict for bank tellers to handle deposits and sales. But the regulators have different ideas on how to solve the problem.
The authority report said banks should use separate counters and staff in a branch to sell investment products. But the SFC suggested banks be banned from using their branch networks at all for these financial instruments. Rather, they should set up a separate subsidiary, using different offices and staff.
The proposed reforms come in the wake of the collapse of the US bank Lehman Brothers in September, a crisis that left 43,700 Hong Kong investors holding derivatives it issued or guaranteed, but which had lost much or all of their value.
Many claimed they were misled by bank tellers, who sold the products as alternatives to time deposits or low-risk bonds when, in fact, they were risky credit-linked derivatives.
Raymond So Wai-man, an associate professor of finance at Chinese University, supported the idea that banks should separate deposit-taking and investment products sales.
“When bank tellers make use of depositors’ financial information and cross-sell them investment products, customers may be confused between investment and deposit taking,” he said. Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks
But Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks, said some banks were very small and it might not be easy to have separate counters.
Mr Wong said banks might face higher operating costs after adopting the suggested proposals. “It’s hard to say whether banks have to pass on the cost to consumers,” he said.
The authority and the SFC reports both noted that Britain, Singapore and Australia had “cooling off” periods of 14 to 30 days on some investment products in which customers can change their minds.
In Hong Kong, there is no such cooling off period. However, the Hong Kong Federation of Insurers does have a cancellation period in which customers can cancel their policies up to 21days after applying.
Chan Kin-por, lawmaker for the insurance sector, said this had helped to reduce complaints. He said 10 to 15 per cent of policies sold were cancelled in the cooling off period.
10 Jan 2009
Enoch Yiu and Maria Chan
The Hong Kong Monetary Authority told banks yesterday to implement seven consumer protection measures concerning the sale of investment products, and to formulate plans to separate their deposit-taking and retail securities business before the end of March.
The measures are part of a range of proposals suggested in separate reports disclosed on Thursday by the authority and the Securities and Futures Commission on last year’s Lehman Brothers minibond fiasco. On the same day, Financial Secretary John Tsang Chun-wah ordered “an immediate review” of Hong Kong’s financial regulatory structure.
The authority sent a circular to all banks yesterday requiring them to immediately add “health-warning” statements to their sales material on retail derivative products to warn of their risks. It told them to immediately introduce adequate controls to ensure sales staff were not solely rewarded for sales performance.
By the end of March, banks must instal audio systems to record client conversations on investment products sales, as well as introduce a “mystery shopper” programme – in which undercover staff monitor the behaviour of those selling investment products.
In addition, the authority told banks to formulate plans to separate their deposit-taking and investment products sales functions. Both reports said it was a conflict for bank tellers to handle deposits and sales. But the regulators have different ideas on how to solve the problem.
The authority report said banks should use separate counters and staff in a branch to sell investment products. But the SFC suggested banks be banned from using their branch networks at all for these financial instruments. Rather, they should set up a separate subsidiary, using different offices and staff.
The proposed reforms come in the wake of the collapse of the US bank Lehman Brothers in September, a crisis that left 43,700 Hong Kong investors holding derivatives it issued or guaranteed, but which had lost much or all of their value.
Many claimed they were misled by bank tellers, who sold the products as alternatives to time deposits or low-risk bonds when, in fact, they were risky credit-linked derivatives.
Raymond So Wai-man, an associate professor of finance at Chinese University, supported the idea that banks should separate deposit-taking and investment products sales.
“When bank tellers make use of depositors’ financial information and cross-sell them investment products, customers may be confused between investment and deposit taking,” he said. Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks
But Peter Wong Tung-shun, chairman of the Hong Kong Association of Banks, said some banks were very small and it might not be easy to have separate counters.
Mr Wong said banks might face higher operating costs after adopting the suggested proposals. “It’s hard to say whether banks have to pass on the cost to consumers,” he said.
The authority and the SFC reports both noted that Britain, Singapore and Australia had “cooling off” periods of 14 to 30 days on some investment products in which customers can change their minds.
In Hong Kong, there is no such cooling off period. However, the Hong Kong Federation of Insurers does have a cancellation period in which customers can cancel their policies up to 21days after applying.
Chan Kin-por, lawmaker for the insurance sector, said this had helped to reduce complaints. He said 10 to 15 per cent of policies sold were cancelled in the cooling off period.
Friday, January 9, 2009
Life in Singapore (3)
Here is the average rating based on 25 and 100 responses.
Rating 1=very unhappy, 3=neutral, 5 = very happy
| 25 resp | 100 resp | |
|---|---|---|
| Safety | 4.12 | 4.07 |
| Law and order | 4.08 | 3.95 |
| Multi-racial culture | 3.52 | 3.47 |
| Neighbours | 3.36 | 3.34 |
| Work colleagues | 3.32 | 3.32 |
| Environment | 3.32 | 3.28 |
| Quality of life | 3.30 | 3.04 |
| Time with family | 3.08 | 2.98 |
| Climate | 3.24 | 2.88 |
| Singaporeans | 2.64 | 2.83 |
| Adequate wages | 2.92 | 2.77 |
| Education system | 2.80 | 2.69 |
| Time to enjoy | 2.68 | 2.61 |
| Transport system | 2.84 | 2.51 |
| Foreign workers | 2.64 | 2.39 |
| Government leaders | 2.64 | 2.34 |
| National Service | 2.38 | 2.32 |
| Taxes, GST, charges | 2.24 | 1.96 |
| Cost of living | 1.96 | 1.87 |
| Overall score | 3.00 | 2.87 |
The ratings for most of the items were lower based on a larger group of respondents. The inital batch had a higher proportion of the older and higher income respondents, which gives a relatively higher rating.
BBC: The financial cost of Redundancies
Making redundancies could lead to a significant financial loss for both employer and employee, an expert warns.
http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7750146.stm
http://news.bbc.co.uk/go/em/fr/-/2/hi/business/7750146.stm
SCMP:More claims for compensation by investors to be heard in court
http://www.pressdisplay.com/pressdisplay/showlink.aspx?bookmarkid=XLOJAU7GY907&linkid=277a14c9-c247-49a3-a4f1-74c1ee1008c2&pdaffid=8HM4kDzWViwfc7AqkYlqIQ%3d%3d
9 Jan 2009
The Small Claims Tribunal may refer to the District Court more of the compensation cases filed with it by investors in financial derivatives linked to collapsed US bank Lehman Brothers. Seventeen investors yesterday brought cases against four banks that sold them minibonds and similar derivatives. Representatives of two of the banks, DBS and Bank of China, requested that the District Court hear the cases. They were adjourned until March 23, when the tribunal will announce whether or not it will refer the cases. It is considering whether to transfer to the court 13 similar cases. The tribunal handles claims for up to HK$50,000.
9 Jan 2009
The Small Claims Tribunal may refer to the District Court more of the compensation cases filed with it by investors in financial derivatives linked to collapsed US bank Lehman Brothers. Seventeen investors yesterday brought cases against four banks that sold them minibonds and similar derivatives. Representatives of two of the banks, DBS and Bank of China, requested that the District Court hear the cases. They were adjourned until March 23, when the tribunal will announce whether or not it will refer the cases. It is considering whether to transfer to the court 13 similar cases. The tribunal handles claims for up to HK$50,000.
SCMP:Regulators' reports on Lehman minibond fiasco f
9 Jan 2009
Enoch Yiu, Maria Chan and Paggie Leung
Legislators and brokers are disappointed with regulators’ reports into the lessons learned from the Lehman Brothers minibond scandal.
The reports by the Securities and Futures Commission and the Hong Kong Monetary Authority carry recommendations including having a cooling-off period in which investors can cancel their investments, and tightening banks’ techniques in selling investment products.
The HKMA also recommends it exclusively regulate banks’ securities business, a role it shares with the SFC.
Kenny Lee Yiu-sun, the chairman of the Hong Kong Stockbrokers Association, said there was a danger the cooling-off measure could be abused. He said some people who lost money because of market movements instead of mis-selling might take advantage of such measures.
“There should be some preventive measures if the recommendation is implemented,” Mr Lee said. He disagreed with giving the HKMA the sole role of regulating banks selling securities products.
Lawmaker Kam Nai-wai, who has actively helped Lehman minibond investors fight to get their money back, expressed dismay at the report: “It does not include any help to existing victims, as there are no measures addressing their concerns.”
However, Mr Kam supported recommendations including establishing a financial services ombudsman and not allowing banks to sell investment products over deposit counters.
Peter Chan Kwong-yue, the chairman of the Allied Victims of Lehman Products, said the reports failed to solve the key problems.
“They are just speaking after the fact,” Mr Chan said. “Someone gets shot by an arrow and [the HKMA and SFC] are not going to save the injured but ask where the arrow came from to avoid getting shot in the future. It’s nonsense to talk about this now.”
Asked about the plan to give the HKMA more authority to regulate banks, Mr Chan said it could help prevent incidents similar to the “misselling” of Lehman minibonds.
A senior banker said it would be clearer if the HKMA took on the role of regulating banks’ non-banking business, but it would be difficult to implement the cooling-off period.
Billy Mak Sui-choi, an associate professor in the department of finance at the Hong Kong Baptist University, agreed the HKMA taking on a sole role was one way to improve the current two-regulator model.
“Regulators who are responsible for the supervision will have to bear all the responsibility, and they can’t blame the other.” Mr Mak said a cooling-off period would allow customers who buy products impulsively to reconsider their decision, helping minimise future disputes.
A spokesman said the SFC would work with the government and HKMA to improve the regulatory structure and investor protection.
Enoch Yiu, Maria Chan and Paggie Leung
Legislators and brokers are disappointed with regulators’ reports into the lessons learned from the Lehman Brothers minibond scandal.
The reports by the Securities and Futures Commission and the Hong Kong Monetary Authority carry recommendations including having a cooling-off period in which investors can cancel their investments, and tightening banks’ techniques in selling investment products.
The HKMA also recommends it exclusively regulate banks’ securities business, a role it shares with the SFC.
Kenny Lee Yiu-sun, the chairman of the Hong Kong Stockbrokers Association, said there was a danger the cooling-off measure could be abused. He said some people who lost money because of market movements instead of mis-selling might take advantage of such measures.
“There should be some preventive measures if the recommendation is implemented,” Mr Lee said. He disagreed with giving the HKMA the sole role of regulating banks selling securities products.
Lawmaker Kam Nai-wai, who has actively helped Lehman minibond investors fight to get their money back, expressed dismay at the report: “It does not include any help to existing victims, as there are no measures addressing their concerns.”
However, Mr Kam supported recommendations including establishing a financial services ombudsman and not allowing banks to sell investment products over deposit counters.
Peter Chan Kwong-yue, the chairman of the Allied Victims of Lehman Products, said the reports failed to solve the key problems.
“They are just speaking after the fact,” Mr Chan said. “Someone gets shot by an arrow and [the HKMA and SFC] are not going to save the injured but ask where the arrow came from to avoid getting shot in the future. It’s nonsense to talk about this now.”
Asked about the plan to give the HKMA more authority to regulate banks, Mr Chan said it could help prevent incidents similar to the “misselling” of Lehman minibonds.
A senior banker said it would be clearer if the HKMA took on the role of regulating banks’ non-banking business, but it would be difficult to implement the cooling-off period.
Billy Mak Sui-choi, an associate professor in the department of finance at the Hong Kong Baptist University, agreed the HKMA taking on a sole role was one way to improve the current two-regulator model.
“Regulators who are responsible for the supervision will have to bear all the responsibility, and they can’t blame the other.” Mr Mak said a cooling-off period would allow customers who buy products impulsively to reconsider their decision, helping minimise future disputes.
A spokesman said the SFC would work with the government and HKMA to improve the regulatory structure and investor protection.
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