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Old 10-08-2019, 02:14 PM   #3712
BBCWatcher
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And the ones who could disapprove it approved it.
To repeat (and in fairness), they didn’t approve anything. They simply didn’t disapprove. The absence of disapproval is not approval.

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...
Perhaps, but ministers in Singapore are well compensated to act in the public interest, even in the face of criticism. Besides, retail investors have bond funds (MBH for example), and a junk bond fund is obviously possible.

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...
That didn’t matter in the case of Hyflux. Their bonds were junk, even stinky junk. A competent rating agency would have confirmed that reality, well telegraphed with 6% promised coupons, and in all likelihood the same gamblers who couldn’t afford to lose would have still pressed their luck.

The development and growth of bond funds would encourage more bond issuers to get ratings, at least at the margins. The regulators and ministers could do more to foster the development and growth of bond funds. For example, the government still hasn’t acted on the last CPF review that recommended revamping the CPF Investment Scheme to offer low cost, well diversified, prudently invested stock and bond funds — “target date” funds, I’d suggest.
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