CIMB-GK to buy back Lehman, Merrill Lynch-linked products

[Weiming]

Frankly, I think many people did not read the prospectus or even if they read it, might not understand if completely. They might have asked the more relevant/pressing questions to the RM serving them and have gotten either ill-advised or incorrect responses.

 

I don't think many read thoroughly or even understand completely their mortgage agreement, car loan agreement, credit card agreement etc. Also, these investment prospectus are even more complex then the examples above.

 

This blogger explains clearly why the minibonds should never have been allowed to be sold here:

http://singaporemind.blogspot.com/2008/10/...le-product.html

[Nkps]

Seriously i dun think any compensation is necessary, at least to those that can read and write.

 

You invest at your own risk, lose money? Just too bad. Misled? come on.. you should be at least be bothered to read the fine prints! Its a few hundred G's you are talking about, not like buying a spoilt vacume cleaner. If one cant be bothered with his own so called 'blood and sweat' money, why should the authorities care?

 

In my opinion, this is the best opportunity to educate the masses. What 'Moneysense'? That doesnt help. What has happened now is the best thing you can put in the textbooks to make ppl smarter.

 

With due respect, this is the stinking attitude of most singaporeans. When things goes bad, they just turn to govt and expect them to play god. No wonder we can never stand on our own as individuals.

 

My view may be rather extreme... but its my personal thoughts.

my sentiment exactly.

[Babyt]

[reply]

With due respect, this is the stinking attitude of most singaporeans. When things goes bad, they just turn to govt and expect them to play god. No wonder we can never stand on our own as individuals.

[reply]

 

pls lah...even Hongkongers also want gov to pay them back. dont blame it on 'singaporean attitude'

 

maybe u did not lose money but if u r one of them, u will also want ur money back, who cares if u r misled or not...who wants to lose money.

[Newbie_driver]

i do agree with ur point of view.

[Tkseah]

After reading the layman explanation of what the minibond is all about.. i'd be surprised if any of the RM selling it really comprehend what they are selling..

 

http://singaporealternatives.blogspot.com/...-all-about.html

[Newbie_driver]

actually dun be surprise that the RM nowadays dun even know what they are selling...

[Donut]

to those who say that these brokers or banks mis-sell to investors and they shld pay all back.... you all are talking rubbish.

 

investment is investment.... no risk, then its not investment liao

 

now lehman fails, everyone point fingers at the banks/brokers for their fault.

 

imagine now everything is smooth sailing, these minibonds are earning $$, these old people are earning $$. WILL ANYONE POINT FINGERS TO THE BANKS???

 

Of course not!! when ppl are earning $$, who cares whether the products are junk or not??

 

Those who insists that the banks are conning these old ppl, will you still voice out??

 

Its only when things go bad, ppl all want to look for scapegoats to blame.

 

Another thing, who is to prove that the RMs are mis-selling? For the investors who are losing $$, they can just say "i dun know anything. My RM just tell me this product is good. I trust the bank. And now, i lost all my $$."

 

But who is to prove it? The RMs could have done a very good job by taking time to explain everything to the investor.

 

Must remember that explaining the products are mostly in verbal and probably some brochures to show the figures. So it is my words against your words over whether i understand what the hell you are talking about.

 

The banks/brokers are buying back the investments from the investors DOES NOT prove that they are guilty of mis-selling.

 

This is called Damage Control. They look at long term business and they are doing it out of goodwill and for their reputation to remain good.

 

For those investors who just put their money into this products, well they are dumb. that's all i can say abt them.

 

we are talking abt $100,000 - $200,000 amount. Not $100-$200.

 

If you are not careful with your money, then who will look after your $$ for you???

 

its your own responsibility to take care of your own $$. As simple as that!!!

[Gearoil]

Most will not understand the Mini Bond thingy...I agree it is close to whata many called it a BIG time scam!

 

But remember one thing.

 

In those earlier period of fixed interest payout for investments, hovering around less than 1.0%...where in the world would some entity promised you an interest of 5.1%?

 

Those who went in and bite it...deserve what they get today!

[W2K_83]

I do agree with you that those who put their money in knowing that it is an investment deserve not to be compensated at all. What is investment without risk. There is nothing such as a free lunch. I would definitely protest against compensation of such people. It is not fair to use the money of those who plan their finances well to compensate these risk takers.

 

However there are some old retirees, who have just received the maturity of their FD or want to deposit money in FD, who are actually sweet talked by RMs into putting their money in minibonds, telling them they are as safe as FD and their principal sums are guaranteed to be safe. Although minibonds are deemed to be safe under those circumstances, they will never ever be as safe as FDs. Let's face it, RMs are nothing but salesmen. They will do anything to meet their sales quota. Any Tom, Dick or Harry without financial background can be given a short 2-3 months course and rolled out as RMs. Many of them (NOT ALL) have no indepth knowledge on the products at all. When I first graduated, I was appalled by how easy it is to get a job as a RM, and the commissions are really attractive. Eventually I stuck to my interest instead of going down the fast-money path. I think financial institutions should start cleaning up their act and hire the right people for the jobs. They should at least possess a level of technical knowledge in finance and not just anyone who can talk and present well at the interview. Soft and hard skills should go hand-in-hand. Otherwise these RMs will remain as nothing but mere salesmen with a nice job designation.

Edited October 29, 2008 by W2K_83

[Gearoil]

Your point is totally irrelevant with regard to the segegration of the types of ppl who make investment for added gains.

 

Monetary gains has no regard to the types of ppl who made the investment....this most if not all will fully agree.

 

So why not the reverse?...for Monetary loss?

 

Investments will pay out when times are good and all events came into play or the investors lose all if major credits events or unforeseen events like a diasaters causing major economic loss all over happens.

 

This should be it and it will always be so.

 

The playing field must be level to all those who wants to make gains from their investment and hit back just as well, if things don't turn out well.

 

This is true market ecomony, it reflects the eventual truth, however long it has been hidden but evntually as they say...' the truth will emerge'!

[David]

well done...takes a smaller shop to step up. and i think CIMB is a Malaysian broking house that bought over GK Goh. really a slap on our rulers man.

Did you buy?

[Chongster]

there is a liquidity trap, usually about 3-5 years. that's what people give up for the higher interest. it's not just risk vs returns.

[Sabian]

You think the banks want to allow this case to go to court?

 

The banks know that for a specific group of pple, they should not be sold the product in the first place if the advisory process stipulated by MAS had being strictly followed.

 

Somehow, the manager who was supposed to sign off with the salesperson, compliance dept, PFS Head, all were asleep on the job.

 

The last thing the banks want is for this to go to court because they know a certain group of customers have a chance of getting a court enforced compensation.

 

This will set the standard for all future selling (which banks are very keen to avoid). Better to self regulate than to be subjected to increased scrutiny.

 

So I find it difficult to buy the "goodwill" BS being spun by the bank's PR spin doctors. This move is out of self interest and fear that going to court will open a can of worms and drag their names through more mud.

 

Note that the banks did NOT voluntarily offer to compensate this group when this thing unfolded. The offer came only after they did a refresher on game theory.

 

If we only operate on the "It's your own $$, look after it youself", then why does MAS insist that banks even do any fact finding/ product suitablilty etc?

 

But if MAS does not hang some people for not doing their duty, another event of this nature will surface after the next round.

[Rickster]

I agree with you on the point that if you put large amount of $ in, you should check carefully.

 

My mom made that mistake and lost a tidy $110K. However, thats y she blamed no one but herself when she lost the money and neither does she expect the govt to compensate her.

 

But she does feel for the "vulnerable" group and is happy that they can at least get back what they had put in.

 

This is not an issue of "Deserve it" or "Greed". Its an issue of unethical business practise that preys on the "vulnerable" group. Same concept as selling cancer-curing magic stones to the elderlies.

[Rickster]

Most will not understand the Mini Bond thingy...I agree it is close to whata many called it a BIG time scam!

 

But remember one thing.

 

In those earlier period of fixed interest payout for investments, hovering around less than 1.0%...where in the world would some entity promised you an interest of 5.1%?

 

Those who went in and bite it...deserve what they get today!

 

Fixed deposit u can take out anytime, but not the minibond. Its 5 years of loss of use of cash. Thats y when the payout is 5.1%, it does not make itself stand out as a high-risk product.

 

However, to say everybody who bought the minibond deserving of what they have today is not exactly a fair statement.

[Kingcopa]

Agree. Now seem like those "educated" are ganging up to demand compensation. I mean u invest at your own risk lor, u shld know there is not such thing as risk free investment or gurantee returns.

 

When u earn $, will u kpkb???? Compensate those old n uneducated, i am fine with it but for those........... comon wake up.

[Devilmaycry]

DBS: Most of Lehman-linked notes valued at zero

 

Most of the $360 million of structured notes linked to Lehman Brothers Holdings Inc. sold in Hong Kong and Singapore - including DBS High Notes 5 in Singapore and the Constellation series in Hong Kong - has been given a value of zero by DBS Group Holdings Ltd.

 

Bloomberg reports that Hong Kong investors were notified that the securities will be redeemed on or before October 31, while Singapore notes are expected to be redeemed on November 3. Letters are being sent to investors to inform them of the situation according to a Straits Times report.

 

In a statement posted on their website, DBS said that the credit redemption amount under the notes is worth "$0.00 per Note".

 

In reference to Structured Retail Notes Series 75 issued by Constellation Investment Ltd, DBS said: "The credit event redemption amount for the Notes has been calculated to be zero, and therefore no amounts are due and payable to the beholders of the Notes on the credit event redemption date. For the avoidance of doubt, no further payments will be made on the Notes after they have been redeemed."

 

Meanwhile, a DBS spokesman also told The Straits Times: 'Unfortunately the worst-case scenario has materialised and the majority of High Notes 5 investors will not be receiving anything back.'

 

This follows a statement posted on the bank's website on October 22 wherein DBS CEO Richard Stanley said, "Regrettably, our initial expectations of the worst-case scenario whereby investors will lose their entire principal investment amount is likely to materialise."

 

Only two of the series sold in Hong Kong were given a monetary value. A Bloomberg report says that Series 36 notes linked to Lehman's $1.5 billion 6.625 percent bonds maturing in 2012 are worth $435.36 each, it said. Investors in series 37 will get HK$2,620.92 ($338).

 

The bank estimated that customer compensation in Hong Kong and Singapore will total $70 to $80 million. It says it will not gain from this process, which they had started last week.

 

 

Bad news for those on DBS High Notes 5[bigcry]

[Gearoil]

The statement is more than fair about the ppl who wanted such gains form such investment.

 

These investment are not like those made to gov bonds...the mini Bonds or whatever are a form or money used to secure against risks that Lemon bros wants to play with.

 

In simple terms, the bros used the money to hedge against higher risk ventures to secure themselves a higher payout then 5.1% that they need to pay back to these investors....which is a gain they make in difference from the higher % they can make from 5.1% ...if things work out and behold!...it wasn't their money that they are exposing to such risks anyway!...even if they lose!

 

Those ventures are highly risky.

 

But do the investors care or want to know?