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
Tng Kim Bock
08 July 2015
After reading the letter “Achieving a robust and vibrant securities market” by Ong Chong Tee of the Monetary Authority of Singapore (BT, June 26), trading representatives (TRs) cannot help but feel that it will be business as usual in the equities market here even with a new CEO at the Singapore Exchange (SGX).
Mr Ong asked whether “Singapore as an international financial centre can afford not to have continuous all-day trading (CAT) as major markets including the US, the UK, Australia and Europe” have CAT. Hong Kong is a major market without CAT. There are also markets with CAT that would not be considered major markets.
CAT facilitates high frequency trading (HFT). When TRs ask for the return of the lunch break, they are not talking about food and networking; they seek a more level playing field for the man in the street. HFT is disruptive, can be destructive and does not contribute to a healthy capital market. It takes no view of company fundamentals and is predatory. Its activities can alter the landscape of individual stocks and real businesses, and hence the market. It can seriously affect portfolio management.
Mr Ong seems to think that many TRs are still living in the Stone Age. TRs do understand how advances in technology have facilitated HFT. In the Stone Age, HFT could have been regarded as creating false markets. Does technology legitimatise these actions?
On another front, SGX constantly emphasises success in its derivatives business in response to criticisms regarding the equities market. In doing so, SGX fails to recognise that promoting derivatives trading does nothing for the building of a real bricks-and- mortar economy.
Derivatives were created for hedging. So it is a means to an end, like insurance, to protect an underlying asset. Used in that respect, they are valuable tools for portfolio management to mitigate risk.
The reality, however, is that derivatives are more often used as an end in itself. The 2008 financial crisis clearly demonstrated this. In this respect, the trading of derivatives is nothing more than betting, thereby amplifying volatility on the underlying asset instead of reducing it.
The stock market needs to return to its original objective of providing an important avenue for companies to raise capital and where trading of stocks reflects real demand and supply. It cannot function as a betting centre.
The facts speak for themselves. Conditions in the Singapore equities market have clearly deteriorated despite many SGX initiatives. Half the stocks in the Straits Times Index are trading at March 2009 to September 2010 levels. Unlike other major markets, many of our stocks have descended to levels not seen since March 2009, the lowest point of the 2008 financial crisis. Fellow TRs and their clients are now driven to other markets for opportunities that they cannot find in the Singapore market.
If our stock market is attractive in the first place, many will queue at our doorstep to list. We need not continue to think of ways and places to go to attract aspirants.