MAS and SGX propose measures to strengthen the securities market

‘The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX) today released a joint consultation paper setting out proposals to strengthen the securities market in Singapore.

The proposals follow an extensive review by MAS and SGX of the securities market in Singapore. The review concluded that while the securities market remains sound, there were three areas for improvement:
• promoting orderly trading and responsible investing;
• improving the transparency of market intervention measures; and
• strengthening the process for admitting new listings and enforcing against listing rule breaches.’

It is timely that MAS and SGX finally find a need to take a look at the health of the stock exchange and are inviting feedbacks on what needs to be done to make the stock market a more resilient and sustainable institution for the long haul. The objectives of this exercise are posted above, copied from SGX.

For all intent and purpose, this is a move in the right direction, a sign that things are not doing well and to take a serious look at the problems before it falls apart. On the other hand, this exercise tells another depressing story. The proposed changes and the need to ask the layman public on such serious and technical issues that require the technical knowledge of experts and thinking people in the industry says that MAS and SGX do not know what is wrong with the stock market. It is doing fine, just a little cosmetic changes and it will look pretty again.

Or, it may be that they know what is wrong but are turning the other way, not wanting to face the uncomfortable truth and wishing that everything is fine. There is no elephant in the classroom.

The public, even the stakeholders, if they are not willing to put on their thinking caps to look seriously into the problems that led to the current pathetic state of the stock broking industry would at best scratch the surface of a systemic problem and would make a few cursory or casual remarks and suggestions and thinking the problems will go away. From my experience, many are still totally ignorant of what is happening and the real causes of the failing market.

The stock market is in the critically ill stage and needs immediate resuscitation if it is not to collapse into a coma. And the proposals made by MAS and SGX are not encouraging. It is like a patient dying of syphilis and the doctors are recommending treatments for measles, for acne, and for insect bites. Unless MAS and SGX are serious to want to save the stock market from its certain demise, this exercise would be a waste of effort and time.

To be able to come up with effective measures to save the stock market, it is paramount that they know what is wrong with the market. What are the causes that are contributing to a market in distress. If they are chasing after the shadows, what good would come out of it? If they don’t even know what is wrong with the market, what is there to do to right the wrongs?

Another very important factor that can make this exercise real, if real solutions and tough measures are to be taken to revive the market, is professional expertise. You need people who know what they are saying, to know what is wrong and what needs to be done, and most of all, have the credentials and authority to tell the SGX that these things must change. Recommendations made by the public, or the stakeholders, could simply be ‘pooh pooh’ away by the SGX for obvious reasons and by the authority vested in them as the incumbent officials. They would flash their badge of professionalism and expertise and simply claimed that they know best and what they are doing are the best, and nothing meaningful will be accepted. Who is in a better position to go against the gods?

What can the other stakeholders do when authority and power are vested in the office bearers at SGX to make them change a flawed system?
The MAS should engage foreign experts that have the knowledge and authority to tell the SGX what needs to be done to save the industry. Here we are talking about real talents, people like Paul Volcker and the critics of the NYSE, of how the NYSE has been turned into a scam, a casino instead of a stock exchange. The western model stock markets, including SGX, are no longer stock markets for investment but for pure gambling, not even for speculations.

Now who is saying that we should not encourage a gambling mentality in the stock market when the stock market has been redesigned into a casino? There is no elephant in the classroom if one does not want to look at it.

This is just my general comments on this exercise. I will submit my views on what is wrong and what needs to change, and I will submit it to MAS and SGX even knowing that it would likely end up in the thrash bin. No one, not even the broking houses, would be in any position to make serious and important changes to the right the wrongs in the stock market if the authority in MAS and SGX do not want to see the wrongs and do not want to make changes to a system they think is doing fine.

For real changes to be effected, you need the pros that could speak to the MAS and SGX on equal terms and have the clout and confidence to make them do the right changes against their objections. The govt must spend this money if they do not want to see the worse from happening.

The few proposals put up by MAS/SGX would have little impact on the general health of the stock market, and some would actually hasten its demise if implemented. It just shows the level of thinking and understanding of what is happening to the stock market. They are refusing to remove the blinkers and are trapped in an old mindset programmed by the so called experts, to see and say the right things that are really frivolous.


Anonymous said...

No matter how you upgrade the SGX.
If the companies that are listed there are of no consequence ... who wants to buy?
It's like having a Rolls Royce but only low grade petrol is available.

Even when the company is a well run company.
The IPO price is so high.
There are no profits to be made from the initial IPO price.
No wonder old timers like me are losing interest.

Anonymous said...

"The stock market is in the critically ill stage and needs immediate resuscitation if it is not to collapse into a coma."

Even if so, but that doesn't make the opposition any stronger and a better govt ready to replace PAP.

Anonymous said...

Critically ill and coma also
not much difference, tio bo?

Even though stock market critically ill, but property prices are still very high and 60% SInkies still happy and satisfied, so what's the big deal?

Collapse into coma? So?

Anonymous said...

And there is still GDP growth and so ministers will still get their bonuses which is pegged to GDP growth, tio bo?

Anonymous said...

Does the President get performance bonuses too? Many are angry that the former president pocketed $40m in office. If you add in 12 mths or 24 mths of bonuses, the payout could be $80m or $120m. What is the truth?

Anonymous said...

Many are angry that the former president pocketed $40m in office.
Anon 9:18 am

Angry angry lah. So?

Anonymous said...

Angry no use.

Anonymous said...

the wayang continue ...

are their cases of syndicates covering their short position thru private placement?

substantial shareholders lending their shares to funds for shorting selling bypassing the sgx shares borrowing accounts?

is high frequency trade a form of market manipulation, creating a false market? is this a privilege reserved for the big boys?

knnccb .... do snakes n rats nest together?

Anonymous said...

If the MAS is serious, it is time to get someone to question what the SGX has been doing to create a casino that is crumbling when all the punters have lost their money and no money to punt anymore.

There is a lost of confidence in the market and the SGX.

Anonymous said...

If the collapsing of stock and property affect you, it means you have been gambling. Gamblers must be prepared for change of fortune. No gambler should blame casino operator for their loss or even going bankrupt. Shall it be said that you have asked for it. No one force you to gamble.

Anonymous said...

The stock, property markets and any market can all go haywire. No problem. Living will still goes in.
Maybe, living will be as usual even if there are no leaders around.

Anonymous said...

Is the stock msrket operating like a casino? If yes, who designed it? Who has turned a stock market into a casino?

Anonymous said...

Remisier society, brokerages, fund managers and those in SIAS better think real hard about this and make their recommendations heard. This is the last chance before the industry go to sleep.

And MAS too. If market goes down, they can't say they dunno what happened like the lemon bonds. All the signs are an immediate collapse. They cannot run away from the responsibility for allowing it to happen.

Ignorance is no excuse.

Anonymous said...

Stock markets will not die...

Regulators, funds, syndicates, specific individuals are in the acts collectively

Only investors n traders rot in the long term.

Knnccb.... long live kuan yew.

b said...

The SGX has turned into a place for a few vicious deal makers to take advantage of a group of naive speculators. Any measures introduced are there to make sure the money goes into the right pocket, namely the few vicious deal makers.