Stock Exchanges – Has Singapore become the laughing stock?

We were the best, used to challenge Hongkong and Tokyo to be the Number One exchange in Asia. Today, the only thing we can crow about is being the best managed stock exchange, a lot of very good rules to protect investors from investing and losing their pants, and a very expensive super computer that can match the speed of super computers of High Frequency Traders.

Other than the above, we are now slipping down the ladder.  In an article today in the Today paper, it has this headline, ‘Thailand topples Spore as SE Asia’s king of IPOs’. If this is not bad enough, we have even fallen behind Malaysia and Jakarta. We only had 13 IPOs listed in the SGX with only one in the main board and the 12 in the Catalist board.  The funds raised in SGX are less than 10% of Thailand, one third of Malaysia’s and half of Indonesia’s.

What is happening? No one wants to list in the best managed stock market in Asia with leading edge super speed computers, computer trading and non stop trading?  Oh, the regional bourses are promoting themselves and encouraging their local companies to list at home. Great reasoning, we should also do that. The only principle that business people swear in is to make money. If the local bourses are shitty, would their companies list in them to get shit?

If SGX is where they can make money, that alone will be the reason for companies to flock here. No need any funny promotion.  What is happening to the SGX? Retail investors fleeing the market, companies refusing to list and there is a new beginning when companies are starting to delist from the exchange. And the broking houses are as quiet as the cemetery and remisiers and dealers are calling it a day with increasing numbers. Nothing to worry about, it is the new norm.

Is there anything wrong with the stock market? Why is the stock market called a moribund market? Why is the best stock market in Asia, or wanting to be the best stock market in Asia, falling into such a deplorable state? No, it is a wrong perception. The market is in the pink of health. Everything is fine. They are encouraging the remisiers to go for more training to be the best remisiers to service the clients, and maybe help the clients to make more money. There are even specialists in the business, not just ordinary remisiers.

Not to worry, everything is fine, just fine. The SGX is the best stock market in Asia. It would be nice if there is a Times Ranking system like how they ranked the universities and SGX would definitely rank at the top.

How to run down a stock market to ground zero? Impossible! We have the money to buy the best talents from the whole world to manage the stock market. We are paying very good money. We will overcome and be the best we can be.  The best is yet to come. The stock market is in good hands.

Changi Resort beckons for the pioneer generation

The new Changi Prison was built on a sprawling piece of land, landed property, with the latest security system and gadgets, costing, if I can recalled, $1b or $2b! It is a really expensive piece of property but could turn out to be a welcome retirement home for the pioneer generation in time to come. No where in Singapore is there a free charity home providing free meals, free medical, a bed to sleep on and 100% security from terrorist attacks or being robbed or walloped by the rich and talented foreigners on the streets of Singapore. This is the safest fortress for the feeble senior citizens to retire.

There is a new trend developing in Japan, where the senior citizens took on petty crimes as a way of life, to get invited to stay in prison for free food, medical and lodging. The high cost of living in Japan is forcing the seniors there to think out of the box to live and to get by.  The state pension of $9,400 per year for the retirees is just not enough to live on. The next viable and workable alternative is to get into prison for free food and lodging, and the answer to that is petty crime like shoplifting.

Singapore is now the most expensive city in the world. How can anyone expect the retirees without an income to get by? The Silver Support Scheme of $750 per quarter would just be too little to survive. And what about the super expensive medical bills in spite of the Medishield Life Scheme?

Would our pioneer generation survivors follow the trend set by the retirees in Japan? Our Changi Resort is the latest state of the art abode and is perfectly suited for the oldies, free food, free medical, good security and a warm bed to lie on. Maybe this is the foresight of the govt, to plan ahead for the pioneer generation oldies if they fall through the net.

The spacious Changi resort is beckoning to them.  Just be a little creative, and with a little effort, the pioneer generation could be invited to spend their golden years in the comfort and safety of this billion dollar complex, well fed, looked after and secure for life, protected from the elements and the beasts in the streets.

The Japanese have started it and setting the trend. We have the Korean wave for the millennial. This Japanese Wave will be very suitable for the seniors. Would it become the next craze in Sin City? A pop culture for the oldies, a revolution by the seniors.

Eugene Tan – How should we honour our pioneers properly

SMU’s law professor Eugene Tan had an article in the Today paper on 29 Mar on the above topic. Here is the gist of what he said and I quote,
‘Let us ensure that the legacy of our pioneers lives on, not only to inspire us but to also provide us with new pathways to critically understand and interpret our nations, our challenges and our evolving destiny. This self knowledge is our collective intelligence that provides valuable guidance as we navigate uncharted waters.  Our nation’s life story is about our greats and pioneers, who steadfastly believed in our right to be a sovereign nation state, and who … build this little red dot to what it is today.  It is to our collective peril if this life giving belief is not nurtured and sustained.’
This is the crux of our story, the reason why our pioneers built this island into a nation state. The big question, build this nation state for who? This life giving belief is about a home, a country for Singaporeans, the descendants of our pioneers, to live a good life.  And if we foolishly dismiss this life giving belief, not nurtured and sustained it, it is to our own peril.
Anyone understand what Eugene Tan said? Our pioneers built this island for us Singaporeans, not for foreigners to come here and inherit everything they built for us. The foreigners here today did not build a single thing, not a single shit. Everything was built by our pioneers.
Are we not betraying our pioneers to give this island away to foreigners and not to Singaporeans, the children of our pioneers? Who says this island shall go to the most talented foreigners and their children?
In the minds of our pioneers, it is all about us, about their children, the future of their children. The foreigners were not in their mind, not in the equation. It was us, Singaporeans first and last.
Any silly twit wants to tell the Singaporeans they should move out and leave and let the foreigners take over their homes and their country, built by the pioneers, their forefathers? Should we bundled the pioneer generation and throw them out in the sea, rewrite our history starting today, Singapore is built by the foreign talents in the 21st Century?
How should we honour our pioneers properly?  Still didn’t get the answer? It is to make sure the children of the pioneers inherit this island and enjoy the fruits of their labour. This island is what our pioneers willed to us, our inheritance, not to be given away freely to foreigners.  The pioneers will be turning in their graves if their children could not inherit the legacy they built and left behind for them.

PS. Many Singaporeans, the daft and the new Singaporeans, are telling the true blue Singaporeans to give away this island if they are stupid and cannot make it here, cannot compete with the foreigners with their fake degrees and talents. Heard of 败家子?

A Separate, unAccountable and unEqual Singapore Elected Presidency

By MIKOspace

In Reality, the Elected Presidency is Subordinate to Cabinet and Parliament.

The Singapore Elected Presidency (EP) has a 6-year term and has veto powers over the spending of national reserves and monetary policies as well as over the appointments of key positions in the Civil Service, government companies and statutory boards.

A 6-member Council of Presidential Advisers (CPA) advises the President in the exercise of his custodial and discretionary powers. The President is obliged to consult the Council in the exercise of his discretionary veto powers in matters such as the Government’s budgets and key appointments.  If the Council agree with the President’s veto, then the veto is final and Parliament must comply. If the Council disagree, the President can still use his veto, but Parliament can override the veto with a two-thirds majority.  In other matters, such consultation is optional.

In many ways, the current Constitutional framework does not give due cognizance to the fact that the President is popularly elected and enjoys such moral weight and electoral authority that is implied from popular election.

This Post highlights the practical reality of the Elected Presidency as a separate, unaccountable and unequal “branch” of the political governance structure of Singapore.

The Constitution expressly and deliberately subordinates the Presidency to Parliament even though its s23(1) has first pronounced that “the executive authority of Singapore shall be vested in the President”.  The Constitution then proceeds to dilute the same “executive authority” by distributing its exercise jointly among the President, the Cabinet or any Minister authorised by the Cabinet. 

The Constitution [s24(2)] further explicitly vests the executive power to run the Government in the Prime Minister and his Cabinet, who “shall have the general direction and control of the Government and shall be collectively responsible to Parliament”.   

Elsewhere, the Constitution also empowers Parliament ie the Cabinet and Members of Parliament (MPs), but not the President, to “enact laws conferring executive functions on other persons”, and the President is mandated to give his assent as long as such laws did not interfere with his discretionary powers [s22H(4)]. 

The Elected President does not have any law-making powers. In other words, the Constitution did not provide the EP with any tool or “tooth” for the execution of his Constitutional “executive authority”, the bulk of which were “separated” and delegated or assigned by the Constitution to the Prime Minister (and his Cabinet).  And in their exercise of such executive powers supposedly vested in the Presidency by the Constitution [s23(1)], the Prime Minister and his Cabinet is accountable to Parliament, not the Presidency.

In further clear and unambiguous language, the Constitution in s21(1) pronounces that the President shall, "in the exercise of his functions under this Constitution or any other written law, act in accordance with the advice of the Cabinet or of a Minister acting under the general authority of the Cabinet".  The President cannot behave or act unilaterally without Cabinet’s approval.

This “distribution” of executive powers by the Constitution among the Elected President, Parliament and the Prime Minister (and his Cabinet) impacts the efficacy of the Presidency by confusing their separation of powers and frustrates the EP’s critical role as the national reserve watchdog vis-a-vis government’s financial prudence and possible indiscretion.  In fact, many of the EP’s powers, and its decisions even on critical discretionary matters are not absolute and can be “overruled” by a two-third majority vote in Parliament acting in accordance with Constitutional provisions.  

The popular election of the President was meant to imbue the Office with moral weight and democratic electoral authority for the exercise of its functions, especially on matters relating to past reserves and the appointment/removal of key office holders.  This is however misconceived and an exaggerated expectation of democratic elections.

The Elected President may be popularly elected, but it is not a “democratic” institution by any measure since nothing in the Constitution requires the EP to be responsible and accountable to the electorate.  There is also no key performance indicator (KPI) to assess the EP performance during his tenure. This further confirms the lack of executive function and authority in the EP.

Unlike MPs, as well as the Prime Minister (and his Cabinet) who must regularly renew their electoral mandate, the Elected President faces no such prospects even though there is nothing in the Constitution preventing the EP from being elected again, as indeed President SR Nathan.

To what extent therefore is the Elected President “accountable” to his electorate?

Answer: The Elected President is NOT accountable to the electorate.

To the extent “approved” by the Prime Minister (and his Cabinet), the EP can publish in the Official Gazette his opinion and the case for his support or veto of the Government’s request to use the national reserves.  No provision exists in the Constitution for the EP to engage in public communication or debates in order to allow questioning and probing by the electorate regarding his opinion to agree or his grounds for veto, whichever the case may be.  It is clearly not the intention of the Constitution for the Elected President to be an alternate political power centre to that of the duly-elected Government.   

The Singapore Elected Presidency, with its Constitutionally-vested “executive powers” tremendously diluted by the very same Constitution, is a separate and unequal branch of the political governance structure.  Constitutionally, it is also not accountable to its own electoral constituency.  

Having “consulted” his CPA, should the Presidential use of veto power be absolute? There is no constitutional provision for the President to obtain a second opinion outside the CPA.  The Constitution creates an anomalous and ironic incongruity by requiring an Elected President to accept the opinion of his unelected members of his CPA; but where they disagreed to his veto, the Elected President could very well face a two-third Parliamentary veto overturn.   

Should a veto by the Elected President in his discretionary decisions be challenged and over-ruled by Parliament?

Or only by a National Referendum? 

A simpler mechanism is to bypass the need for Presidential approval for the spending from national reserves if, and only if, two-thirds of Parliament has already approved the expenditure.   

Separate, unaccountable and unequal, whither the future of Singapore Elected Presidency?

A “big picture” perspective is necessary to remove the anomalies in the Elected Presidency innovation.  The EP remains very much a work-in-progress in Singapore’s political governance landscape.  A custodial Presidential oversight responsibility over sovereign reserves and appointment of senior public officials does not necessarily confer any viable executive authority onto the Elected President.

The current review of the Elected Presidency should examine all the constitutional provisions relating to the EP, Cabinet and Parliament. To avoid ambiguities with regard to who has final and ultimate executive authority would require expressed and explicit statements to the effect. In a democracy, it is the Cabinet, supported by Parliament, who has true electoral mandate and therefore the ultimate executive authority to be responsible and accountable to the electorate. 

Computer trading - When Indians fear...do not tread

Below is a Bloomberg article on the danger of HFT and computer trading and how this new animal is frightening the Indians and their calls for actions to curb the beast. The only shortcoming is that there is this denial to call a crime a crime. But anyone in the business could figure out from the comments of the article how criminal are HFT and computer trading, how they cheated the innocent investors and how they are ruining the stock market from their gambling tactics instead of trading on stock fundamentals. As a result the stock market is in ruins and tatters. It is unbelieveable and criminal for stock market operators to continue with this destructive crime against the investors and the imminent destruction of the stock market industry. Here is the gist of the article with some of the irrelevant being deleted to shorten the piece.

Hottest Emerging Market for Algo Trades Wants to Cool Down (1)
2016-03-28

By Santanu Chakraborty
     (Bloomberg) -- India’s flash boys are discovering that even the biggest emerging market for computerized trades has its limits.

In just five years, high-speed and algorithmic traders have gone from bit players to a dominant force on Indian exchanges, enabled by a technological arms race between the nation’s top exchanges that cut transaction times to tiny fractions of a second. Now, as some of the country’s largest brokerages call for tighter regulation, those same bourses are starting to explore whether speed traders should be reined in.
    
National Stock Exchange of India Ltd. is considering higher fees for traders who flood the market with unfilled orders, while its cross-town rival, the BSE Ltd., has called for “corrective action” to address the harmful side effects of high-speed strategies. Critics of India’s supercharged market structure say it’s raising costs for long-term investors, introducing little-understood risks and distracting exchanges from what should be a priority: getting more of India’s 1.25 billion people to put their savings to work in the country’s capital markets.
    
 “It seems that man is losing out against the machine,” said Jitendra Panda, a governing board member of the Brokers Forum, an association of 800 broker-dealers in India...

Both bourses have introduced co-location services -- allowing traders to put their computers in exchange data centers so they can execute faster -- and offered monetary incentives for derivatives transactions. India’s fragmented markets, where many of the same securities trade on multiple venues, also makes it attractive to high-frequency traders looking to arbitrage price differences. In October, the BSE reduced its average processing time for trades to 6 microseconds from 300 milliseconds, the fastest worldwide, according to Ashishkumar Chauhan, BSE’s chief executive officer.
    
While Chauhan says India has been among the world leaders in setting regulatory standards for high-speed trading, he sees scope for creating a more level playing field.
     
“We are doing a lot of HFT compared to the size of market and we need a clear understanding of the risk,” Chauhan said in an interview. “We need to take corrective action so that the good part of HFT is maintained and the harm that can come can be reduced to the maximum extent possible.”....

Exchange officials are quick to point out that their goal is to accommodate all types of investors and that computerized trading has brought important benefits to Indian markets, including smaller spreads and higher trading volumes.
    
But detractors claim that those measures don’t tell the whole story. They say some high-frequency traders are profiting unfairly at the expense of long-term investors by spotting their orders, then pushing up prices before the slower trader has time to react.
    
“Investors are being forced to pay more to buy or sell stocks due to HFT and algo systems,” said Panda....
    
    
The NSE is “continuously addressing concerns about different HFT models and their potential to distort markets,” Narasimhan said.
    
The Securities and Exchange Board of India, which issued broad guidelines on computerized trading in 2012 and 2013, said in December it’s considering new restrictions, but has so far taken no action....

For Deven Choksey, managing director of Mumbai-based K.R. Choksey Shares & Securities Ltd., India’s stock market would be better served if exchanges focused on attracting more of the nation’s growing pile of household savings instead of luring ever-faster traders and the higher fee income they bring. The base of individual investors has shrunk from about 30 million in 1991 to less than 25 million today, BSE’s Chauhan said.
    
“Exchanges won’t be able to help channelize household savings into the capital markets if their focus is only profit maximization,” Choksey said. “We will invite trouble if there’s no structural solution.”