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Old 10-08-2019, 01:41 PM   #3710
Arch-Supremacy Member
Join Date: Mar 2008
Posts: 11,852
They did indeed, but letís assume a Hyflux investor foolishly didnít read anything except ď6%!!!!Ē What on earth did they imagine to be a 6% coupon note in a ~1.5% yielding government bond interest environment? Risk free? Low risk? All you had to do was look at the promised yield! There was/is absolutely no special analytical skill required here. That number told you all you needed to know about how extremely risky these notes were. They were offered at about quadruple the yield of government bonds!

Yes, OK, the regulatory environment in Singapore is too lax, and for no good reason. In many jurisdictions DBS and Hyflux would not have been legally permitted to sell these notes to retail investors. Perpetuals are illegal in many jurisdictions, and low minimum unrated bonds/notes (i.e. retail denominations) are also often illegal. The same should be true in Singapore, in my view. If anything this nonsense is holding back the development of reasonable bond funds for retail investors. (MBH is OK, but it could be better.) And Hyflux investors have my sympathies. But, good grief, 6%!
If Perps are only allowed to be sold to AI, the same group of people will blame the government for being bias and should allow small retail investors to take on higher risk or it is a conspiracy by the government to only let the rich get richer...The problem why bonds are not even rated in Singapore is because there is no regulatory requirements for a company to get their bond rated... Whether it is a good thing or a bad thing is another debate altogether...

At the end of the day, people should only invest money that they are willing to lose...If people really want to have a nanny state, maybe the government justification for CPF minimum sum is right after all as Singaporeans cannot be entrusted with money as they will squander it all away...
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