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 issue manager
Comments
R Sivanithy
09 February 2015
Some BT readers and investors may be wondering how the dealing community’s view of the local stock market could be so diametrically opposed to that held by the Singapore Exchange (SGX).
On the one hand, 1,225 trading representatives (TRs) last month took the unprecedented step of voicing their concerns in a letter to the finance minister (“Remisiers write to Tharman to resolve issues plaguing market”, BT, Feb 5). The basic contention was that retail public confidence in the Singapore equity market is poor and is unlikely to improve without drastic changes.
The letter also listed recommendations for moving forward, such as better short-selling disclosure rules, a higher-quality bar for CPF Trustee stocks, less onerous rules for trading sophisticated products, faster resolution of investigations, and regular updates when there are official probes into possible market rigging.
Apart from noting that these are all very reasonable suggestions - one dealer described them as “low-hanging fruit” that can be easily implemented quickly - two points should be noted.
First, the gist of the Jan 15 letter is broadly consistent with a statement released by the Small and Middle Capitalisation Companies Association (SMCCA) last month recommending that companies look to markets other than Singapore when planning fund raising, a recommendation which in effect was an indictment of the local stock market.
It would be possible to dismiss SMCCA’s views as being held by only a minority since it has only 30 members, but one could quite easily argue that if at least 30 CEOs of public listed companies hold a dim view of conditions in the local market and its outlook, and are recommending other exchanges instead, then there may be a real problem simmering which should not be ignored.
Second, the depth of emotion - frustration, anger and helplessness - must have been pretty severe to prompt a relatively large number of investment professionals to put their name on a letter to the government calling for change. This depth did not develop overnight; instead, it has been brewing for many months, possibly even years.
On the other hand, however, is SGX’s view that this is a quality market. When replying to a letter carried by BT last November from the president of the Society of Remisiers which was critical of the local market, SGX in a letter to BT published on Nov 14 cited the Straits Times Index’s (STI) impressive annual returns over the past year, strong growth in assets under management (AUM) in exchange-traded funds (ETF), money raised via public listings, a new market maker/liquidi- ty provider programme, smaller board lots and various other initiatives as indicating not just existing vibrancy and confidence but also the promise of better days to come.
In response to the Jan 15 letter, SGX last Thursday also highlighted an increase in new Central Depository accounts set up by younger investors, suggesting that the demographics of stockmarket investing are changing. It is also worth mentioning that the traditional retail model of stockmarket trading is undoubtedly undergoing some change: more retail investors are trading through other platforms and private banks, possibly lured by lower transaction costs and a wider array of products in which to participate, and this transitionary period is bound to have an adverse impact on TRs’ income and, by extension, their view of the market.
So who is right? Our column two weeks ago (“Local stocks: is the glass half empty or half full?”, Hock Lock Siew, Jan 27) suggested that there are many ways of looking at the same problem, and depending on one’s vested interest, all numbers and arguments can be tweaked or skewed accordingly.
It is important, however, for SGX’s critics to be reminded that it is in the exchange’s interests to build a robust, active market that enjoys plenty of liquidity and offers a large variety of quality products.
The fact remains, however, that there is a growing voice of discontent on the TR side of the debate which has, in a manner of speaking, decided to go for broke and reach out to the highest levels in order to be heard. Clearly born of desperation, it would have taken a lot to push TRs who are generally reluctant to openly criticise officialdom - especially officialdom which wields disciplinary powers over the TR community - to appeal to the government for help.
It is therefore time that this voice is heard and not dismissed as coming from a disgruntled minority that is deemed unable to adapt to change, or unable to compete or is a victim of shifting demographics.
In this regard, perhaps the best advice on how to move forward is for everyone to ask themselves how things could have deteriorated to such an extent and then to note (as one of the petition signatories was quoted as saying in our Feb 5 article) that this is not the time for blame or criticism. Instead, it is the time for all relevant parties to work with - rather than against - each other, with open lines of communication and a firm commitment towards improvement.