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8/02/2012

SGX targeting the heartlanders



SGX is mounting a public campaign to educate the heartlanders to invest in the stock market. One thing unsaid is that the market is very sick and there is an urgent need for an injection of morphine before the market turns into a cold turkey. I said morphine injection and not tonic as more innocent traders entering the market, if they take the bait, will only be a temporary respite. The market would still go into a coma and then mortis rigour if nothing is done to look at the real causes of its bad health.

What has happened to a flourishing market that saw hundreds of thousands of investors vigorously trading daily but vanished into thin air and the market looking like a cemetery on a weekday? Where have all the investors gone and why?

There is something very sinister in the dying market. Is this due to the uncertainties in the collapsing world economy, the financial system, or is it something local and systemic? Or is it that the products are unworthy or unfit for consumption? It is important to understand the causes of this pathetic state of the market before bringing innocent and naïve heartlanders to trade in a market that is more like a casino, dominated by computers and the big boys. Someone once advised that traders cannot trade against Robocop or the computers and hoping to come up tops.

The heartlanders are not the super rich that have easy money to splash and to lose. Their little savings or spare cash are blood and sweat money and if they are encouraged to trade in a stock market, their interests must be protected at all cost. Does anyone want to know what happened to all the traders in the market? Where have they gone, what happened to them and why were they no longer in the market?

This could be a good place to start and the answers could reveal the causes of the dying market and what needs to be done before bringing in the sheep for the slaughter.

Is there anything wrong with the market? This is a spooky question that begs to be answered.

18 comments:

Divali said...

[SGX should not punch above its weight]
"It should focus on enhancing quality of listings through enforcement, before scandals drive away high quality foreign firms"
By mak yuen teen, vincent chen and emily sim

http://www.businesstimes.com.sg/premium/editorial-opinion/opinion/sgx-should-not-punch-above-its-weight

Divali said...

[PIMCO's Gross prophesies death of equities in August outlook]
"Bill Gross, the co-founder and co-chief investment officer of bond giant PIMCO, says it is time to write the obituary for stock investing as we know it.
Writing in his August investment letter, the manager of the world's largest bond mutual fund said lower returns on stocks -- and bonds, for that matter -- means individuals will have to work longer to save for their retirements."
http://www.reuters.com/article/2012/07/31/investing-gross-pimco-idUSL2E8IV43G20120731

Anonymous said...

I started investing in SGX more than 30 years ago.
Back then, listing criteria was very strict. Even for the 2nd tier board called SESDAQ (back then).

And then somebody in Singapore decided to change our SGX into a "disclosure based regime."
I not stupid.
I understood that to mean "buyer beware" or "you die your business."

My caution was justified.
As events over last 10 years has shown.
My investment activities on SGX is down about 95% versus before the new "disclosure based regime."

But of course;
I am a "once every 50 year type investor."
And "no amount of engineering will ever make me happy."

Anonymous said...

Bill Gross (PIMCO) should stick to bonds where he made his reputation and career.
He is making a very fundamental error in his pronouncement on stocks.

http://finance.yahoo.com/blogs/daily-ticker/dear-pimco-bill-gross-maybe-analysis-stocks-140155518.html

Anonymous said...

The truth is written all over the place. Western model stock exchanges today are nothing but disguised casinos and more deadly. They are not meant for investment but for gambling with loaded dice.

They are the snake oil sellers?

Chua Chin Leng aka redbean said...

Hi Divali, thanks for the links.

The failure of the stock exchanges and its transformation is there for all to see. The results don't lie. MAS and SGX should conduct a serious study on why the stock exchange is in such a depressed state and why the small investors lost all their money and are staying out.

Such due diligence is necessary and a responsible thing to do to protect the small investors before luring them into the market.

Anonymous said...

"They went in with their eyes opened."

Investors eyes are now wide opened.
Wallets are now tightly shut.

Some people should just talk less, and do more for their fellow Singaporeans.

Anonymous said...

Stock Exchanges are much liked Casinos and it is precisely because of the Similarity that these gambling dens are doing roaring bizness.

Gambling is highly addictive, most investors are liked gamblers.

Anonymous said...

This scheme is no more than bringing the casino to your doorstep. When skilled professionals and others who have honed their technical/chart reading skills can still lose money, the SGX is bringing lamb to the slaughter house.

CPF have data of those who used their CPF for stock tradings,and if I recall, about 65% lost money - even though they were holding, and not jumping in and out.

Any 'education' should be targetted at those who are in the market, holding losing positions and given advice. To try a blanket approach for self-serving reasons where stock trading is concerned is most dishonourable.

Also, was MAS' 'blessings' sought?

Anonymous said...

There are certain regulations to protect the small investors from the big boys who would use their muscles to beat up the small investors when they are unrestrained. Things like a level playing field which means that all players should be playing with the same rules and cannot take advantage of another by any means like using computers when others cannot, no churning, no buying and selling without change of ownership, no unfair practices, no cornering of stocks etc etc.

Are these regulations being observed or violated? Are the big boys having unfair advantages over the small boys?

The MAS and SGX are duty bound to ensure that this is the case. If not then it is failing in their responsibility to ensure a level playing field for the small guys.

Anonymous said...

The fact that most of the small investors are losing their pants is very revealing.

What is wrong MAS, SGX?

Is there anything that the small investors do not know?

Anonymous said...

Level playing field for investors?

PSLE is a level playing field?
When some students have private tutors.
While others have none.

Anonymous said...

The poor must subsidize the rich.

So it is the job of the small investors to ensure that the big investors make money.

Anonymous said...

penny stocks - played by syndicates

Midcaps - played by computer algo

large Caps - Those who can afford

Looks like heartlanders are targeted to feed computer algos and syndicates.


Good luck

Anonymous said...

Anyone see a lehmon?

Anonymous said...

Equities are dead.SGX and SIAS are just beating a dead horse

Anonymous said...

Do SGX, SIAS and MAS know? I bet they don't know. And every now and then they are still reporting how great the business is and how sales have increased by leaps and bounds, especially derivative trades.

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