TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issu...
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Business Times Editorial
01 April 2014
One of the hallmarks of a strong economy and financial market is a vibrant domestic equity market. Not just because of its fund-raising capability, but also its investment function. But the performance of the Singapore bourse has raised concerns within local financial circles, and here’s why:
The average value of shares traded on the Singapore bourse has fallen 40 per cent to about S$1.06 billion in the first two months of this year from S$1.77 billion a year earlier, according to data compiled by Bloomberg. This compares unfavourably to the 11 per cent fall in transactions in Hong Kong in the same period, while those on Japan’s Topix index increased 17 per cent.
Meanwhile, the benchmark Straits Times Index has trailed its major developed-market peers in the past 12 months and has been flat this year. The total return on the FTSE ST All-Share Index is down 2.5 per cent year on year. And despite numerous initial public offerings, the market capitalisation of the Singapore bourse is down almost 4 per cent year on year. This is despite Singapore Exchange’s (SGX) attempts to boost market activity via measures such as extended trading hours and the move to encourage more retail investor participation. All this has also been bad news for the people at the epicentre of the market - stockbrokers.
The number of stockbrokers in Singapore fell 8.4 per cent to 3,973 at the end of last year from 4,336 in 2011 as the industry was buffeted by declining trading volumes and commissions as well as competition from online trading platforms. More continue to leave, while few are joining the industry.
Meanwhile, the market anxiously awaits SGX’s measures to implement new rules that include requiring collateral for some trades and shortening the settlement period. This comes largely in response to the penny-stock rout of November 2013, which erased almost US$7 billion in market value of three companies - Blumont Group, Asiasons Capital and LionGold Corp - over three days.
Some wonder whether such new rules could be the straws that break the already sickly camel’s back. The issue also raises some pertinent questions. Should trading risk be within the realm of broking houses, or should they be the responsibility of SGX? Should the priority be to encourage more calculated risk taking and market participation, or more risk management? Should stockbrokers, whose commission incomes have fallen by over 50 per cent in the last 10 years, be penalised by both regulators and their firms for the foibles of investors?
For a market wallowing in poor liquidity and lukewarm interest, some degree of speculative activity is necessary. It adds a dose of infectious vibrancy which can spread to the broader market and draw more equity market participation - a stated objective of SGX. While oversight is needed, neither should one take a hammer to swat flies.
Hence, bourse can't grow.
Rule by greed rather than industry benefit.