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4/21/2010

SGX asking for public views

The SGX is asking the public for views on whether it is ok to let banks become trading members, ie full time brokers to trade in stocks. Is this a fair proposition to ask the public? In the case of locking up the people's CPF savings through minimum sum, CPF Life, locking them up in the Medisave, the public's view was not sought. They just do it without any need for consultation when it should as the people would have a lot to say on their own money and things affecting them directly. The issues were then more easily understood. Here we have a financial issues that have implications and consequences beyond the layman in the street. Only the academics or finance professionals would be able to give any reasonable views and inputs. But these people are unlikely to waste their time as their time and effort are expensive. So who does SGX expect to respond to their invitation for views on such a technical issue? It will be more meaningful for Sheng Siong to ask the public if it is ok for them to take over the wet markets and change them into something else. It would be more meaningful if Teo Ho Pin and other MPs affected by this wet market issue to ask their constituents for views and feedback. The public can only make reasonable feedback on things that they can comprehend at their level. The talents at SGX should be in a better position to decide whether the banks should be allowed to dabble in stocks. Is there a conflict of interests? Should banks be allowed to deviate from their core business into other high risk areas? How would it affect the businesses of other financial institutions? Would there be unfair advantages or unlevel playing field? How would it affect the jobs in the industry? How would it affect the stock market as a whole? And there are many more issues related to this move, ethical, moral and administrative etc etc. The answer is best answered by the professionals paid to do the job.

8 comments:

Anonymous said...

Chua Chin Leng Sir;

me likes to say here that You deserve the respects of most Singaporeans. I have follow You here for years now and have found that You and a few other bloggers such as Lucky Tan and Mr Leong Sze Hian doing all the relevant duties to the people.

CONVERSELY, we have a bunch of most talented leaders with their specialist henchmen asking irrelevantly for opinions, just so that when shits hit the fans, they could be exculpated and exonerated. Blames will then be directed and heaped on those who stupidly submitted their ideas.

It is common knowledge now that good and workable suggestions have always been hijacked by those who asked for them. They(the Leaders) then became the Proprietors of those ideas and take all the credits at the same time glorify themselves.

Many are able to see through the craftiness of these shameless shenanigans yet they never failed to get some to do the works for them. THE LEADERS ARE HAVING EASY JOBS WITH GIANT PAY PACKAGES WITH LITTLE NEED TO BE ANSWERABLE FOR BLUNDERS! IT' ALWAYS THE PEOPLE THAT GET THE SHITS.

We should honour the Leaders, respect their abilities to lead and bring us happiness. We must trust that they can deliver without ideas from the people. They need to be tested as well for their claims of greatness.

PLEASE LET THE LEADERS SHOW US THE WAY.

patriot

Wally Buffet said...

It is "logical" to ask the public because the banks' clientele is the public not hedge funds or other so called professionals.

Asking the public is a foregone conclusion. Letting the bank do the trade for their customers is the natural order of things. Besides, since the banks know how much a customer is worth, they have more control over unrecoverable advances.

Once, most stockbrokers were offshoots of bank broking departments. Then they merged with the independent stockbrokers. Now, they want to separate again.

I have said many times before and I will repeat it here again. The new way to dabble or invest in shares is no longer with the stock brokers or the banks. It is through online transactions as more people gets to be internet savvy. And possibly the SGX might explore doing away with the intermediaries altogether. With infotech and the net, the remisiers, dealers or other so called advisory professionals know as much as you do maybe even less because they are busier with so many clients.

Mr. Bean, you were so excited about this topic that you forgot to title this post...

Hehe.

Wally Buffet said...

Oh, now you did!

Chua Chin Leng aka redbean said...

Wally, It is proven that without the remisiers the stock broking industry will go kaput. At best it will be as big as timbuctoo. The multiplier effect provided by the remisiers allow the small number of investors here to multiply by at least 10 to 100 folds.

Secondly, no gambling in the office. No organisation will allow their employees to dabble in stocks during working hours, on office time and computers.

Thirdly, broking houses depending on the on line trade only will go bust immediately.

We don't have the critical mass to run on online trading to be a financial centre. Even now, the trading volume is fictitious in the sense that it is done by programme trading, right hand to left. Remove the programme trading and you will know how thin is the trading volume. If it goes on like this, even the ghost programme trading cannot help.

Chua Chin Leng aka redbean said...

As customers to a bank, they don't really to bother what kind of business the bank is doing. Presumably the law will ensure that the bank does not engage itself in illegal business or selling toxic products.

The shareholders may want to know. And their concern is to make money.

It is the govt and SGX to decide how much leeway they want to give to the banks, what kind of businesses they want to let the banks do. History has repeated itself many times, expansion into all kinds of businesses only to be reined back to do the core busineses.

Banks indulging in shares, in properties, in restaurants, in casinos, where is the end?

Wally Buffet said...

Mr Bean,

1. Remisiers I know are bemoaning the fact that quite a number of their clients have opted for online trading. The clients cite easy access to their trading accounts and quick execution of trades as the main reasons. Typically, it is very difficult to get to remisiers in a very hot or a very panicky market. Stock investors as in many other areas are very well informed nowadays due mainly to the explosive use of the internet. Although I have dealers in several stock brokerages acting for me, I personally find that placing my buy or sell orders online is convenient, hassle-free and pleasant with no voice contact with someone who quarreled with his wife or got up from the wrong side of the bed. Ah well, to each his own.

2. Placing a phone call is also disruptive in the course of one's work day. Of course company's intranet or internet access is logged but nowadays you can do it with your blackberry as efficiently.

3. The change to a totally online trading environment will not take place overnight but the trend is there. Nowadays, more and more daily transactions are done online e.g. banking, applying for licences, permits, etc. I do mine all online. No need to queue. No need to speak to dour counter staff.

With no one buying any more bank structured investment products at least for the foreseeable future, I think the banks are eyeing an alternative source of income. generating.

Chua Chin Leng aka redbean said...

Wally, you are just a few of the fortunate investors who could trade freely online. The employees may not be able to do so.

Oh, nowadays it is very easy to get the remisiers. Nobody is in the market. If you can't get the remisier it is because he is so bore and has gone on holiday. It is ghost town really.

As for banks, they should stick to banking. Otherwise tomorrow they also want to open MacDonald or Spa when they think these businesses can make good money. Or they can do what Goldman Sachs is doing and earn big big profit. I am still curious how they did it.

Anonymous said...

Asking for views is one thing. Taking into account those views is another.

In Singapore, those who rule and those who control generally already made up their minds about which way to go. Asking for views is just the sideshow.