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  Online share trading gains currency
Posted by: Musicwhiz - 21-06-2011, 07:18 AM - Forum: Others - Replies (2)

So as the saying goes - people now increasingly know the price of everything, but the value of nothing! Tongue

The newspapers perenially mixes up the terms "trader/speculator" and "investor", preferring to lump them into one group for convenience...

Jun 21, 2011
Online share trading gains currency

Trend driven by wealth of information available to tech-savvy investors
By Chua Hian Hou , Technology Correspondent

WIRED-UP professionals in their 30s and 40s are leading the charge as investors increasingly trade in shares online and via mobile phones instead of calling stock brokers.

The trend is less about reducing costs and instead reflects how investors have embraced digital and Internet technology.

Online trading has been growing steadily for a while now, say local broking houses. And now, 25 per cent to as many as 60 per cent of their retail clients have gone online, a trend picked up by the Singapore Exchange (SGX).

While the SGX does not track the numbers of investors who trade online, its securities head Chew Sutat said the number has been 'growing healthily'.

Broker Phillip Capital, which launched the online trading service Poems 15 years ago, has seen the number of those trading online growing at a steady clip, it said. Now, corporate development director Thomas Yeoh said, 60 per cent of its orders are executed online, with such traders tending to be tech-savvy professionals aged between 30 and 40.

Fellow broking house OCBC Securities is seeing the same trend, said managing director Hui Yew Ping.

About half of the firm's clients trade online and, again, those dealers are primarily aged between 31 and 45. While numbers have been growing over the years, it noticed a big jump in 2009, when it launched the ability to trade in foreign markets.

While fees can be as much as double for trading through a broker compared with doing it yourself online, broking houses say this is not the key reason for the shift.

Phillip's Mr Yeoh pointed to the 'democratisation of information' as the key driver behind the growth of online dealing.

Previously, stock brokers typically possessed far more market-sensitive information than retail investors, whether in the form of breaking news about a company or data about its share price trends.

Investors looking for that hot trading tip had no choice but to call their brokers, said Mr Yeoh.

But the Internet has changed all that, to the point now where 'there is more information than you have time to read'.

Civil servant Mark Lee, 32, has not contacted his broker in 'at least six months' because all his trading is done online.

'There is so much information available, from annual reports on SGX's website to my iPhone Straits Times app, that I don't have time to read it all, much less digest it,' he said.

He declined to give details of his portfolio other than saying it was doing 'reasonably well, slightly ahead of the Straits Times Index'.

Broking houses say these wired-up users are leading the way into the next big thing - mobile trading, a process that is developing strongly at all the broking houses contacted by The Straits Times.

Phillip said a 'double digit' percentage of its trades are conducted via mobile devices such as the Apple iPhone - triple the level a year ago.

Mr Yeoh said the number is expected to double again by 2013 as investors look for ways to trade anywhere, any time.

Phillip released a mobile trading app for the iPhone last year and launched one for Google Android handsets last week.

Mr Yeoh said at the launch that office workers were especially likely to use their handsets to trade as some employers might not want staff using office computers and time to buy and sell their shares.

While the mobile service allows only share dealing, Phillip is looking to add new functions like the ability to trade unit trusts and investor education modules.

But it is still too early to write the obituaries of old-style stock brokers, despite their dwindling share of the trading dollar.

Brokers say they still have a key role to play as there remain many investors who are not comfortable with technology or who prefer the personal touch.

Kim Eng's executive vice-president of retail business, Mr Jeffrey Goh, said bigger value trades are still transacted via a broker.

He said: 'Our full-service brokers will always continue to play an important part in servicing clients, as they provide a personalised touch and execution service at just a phone call away.'

chuahh@sph.com.sg

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  Chinese stocks lose their luster in US markets
Posted by: billcoke - 19-06-2011, 12:13 PM - Forum: Others - No Replies

Chinese stocks lose their luster in US markets

High-flying shares in Chinese companies have come crashing to the ground recently. -AFP

Sun, Jun 19, 2011
AFP

NEW YORK, USA - High-flying shares in Chinese companies have come crashing to the ground recently, amid a flurry of accounting scandals and a crackdown by US regulators.

Less than two months ago, US investors were eagerly buying shares in Renren, a social-networking company dubbed the "Facebook of China," and other firms that seemed poised to benefit from China's rapid economic growth.

Renren's shares jumped 29 per cent on the day of its initial public offering (IPO) on the New York Stock Exchange in May. Then they sank, closing at just US$7.03 (S$8.67) on Friday, down to about half of their IPO price of US$14.

Of the 12 Chinese companies that have debuted on US exchanges this year, only two are trading above their IPO prices, according to data from Morningstar, an investment research company.

"The drumbeat out of China right now is that certainly there's an air of fraud and of different sets of numbers for Chinese reporting versus US reporting," said Bill Buhr, an analyst with Morningstar.

"It basically is spooking investors. I think they assume that where there's smoke, there's fire," he added.

The fallout threatens even firms which have not been tainted by accusations of wrongdoing, such as search engine Baidu, which closed at US$117.68 on Friday, a drop of nearly 25 per cent from its intraday high of US$156 in April.

"Is This the China Bubble Bursting?" asked a recent headline in The Wall Street Journal.

The most recent Chinese company to fall under a cloud is Harbin Electric, whose stock has plunged more than 40 per cent since Thursday, when a research firm accused it of falsifying documents.

Harbin Electric, a machinery maker listed on the NASDAQ, has denied the accusations.

The Securities and Exchange Commission has halted trading of several Chinese firms this year, accusing them of violations like keeping two sets of books or failing to disclose that their auditors had quit.

Last week, the SEC said it was probing two more firms - China Intelligent Lighting and Electronics and China Century Dragon Media - for submitting "materially misleading and deficient offering documents."

"It will be difficult for Chinese IPOs to go forward in the US until the managements of companies decide to improve their operational and financial disclosure," said Linda Killian, a principal at Renaissance Capital, which researches the IPO market.

Many of the Chinese companies being probed by the SEC listed on US exchanges through "reverse mergers," a controversial technique in which a firm seeking to go public acquires a publicly traded shell company.

Financial reporting requirements are not as stringent for reverse mergers as they are for traditional IPOs, and the SEC issued a warning about the practice earlier this month, which singled out several Chinese firms.

"Given the potential risks, investors should be especially careful when considering investing in the stock of reverse merger companies," Lori Schock, an SEC official, said in a statement.

Other factors have also harmed Chinese IPOs, such as rising inflation in China, tighter capital requirements for Chinese banks and civil unrest in smaller Chinese cities, said Killian of Renaissance Capital.

As the craze for Chinese IPOs has waned, commentators such as stock-market guru Jim Cramer have turned their attention away from China's strong growth prospects and towards its weak record on corporate governance.

"There's very little corporate governance, informal auditing, and of course, the prospect of government intervention since, remember, it's still officially a communist country," Cramer said on CNBC television.

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  Money talks when S'pore women say 'I love you'
Posted by: Musicwhiz - 15-06-2011, 06:09 AM - Forum: Others - Replies (10)

Oh well, so much for looks or the gift of the gab! Tongue

Jun 15, 2011
Money talks when S'pore women say 'I love you'

Survey finding may be a reason for low birth rate, as materialistic people value family less
By Theresa Tan

BLAME the material girl for Singapore's baby woes.

Cupid and the stork had no luck last year, with the number of marriages and babies born dipping to yet another record low.

New research by Singapore Management University (SMU) psychology professor Norman Li could shed some light on Singapore's ever-shrinking birth rate. His study, published earlier this year, shows that Singaporean women are 'significantly' more materialistic than their American peers.

When it comes to looking for a potential spouse, the top criterion for Singaporean women is a man's social status. Next on the list is kindness, followed by a lively personality. In contrast, American women value kindness the most, followed by looks, then a man's social standing.

Prof Li did not ask his subjects for their reasons but said he is not surprised by the finding. 'Maybe Singaporean women are just being realistic. Here, you need a lot of money to survive and afford an affluent lifestyle. Maybe they are just being practical,' he said.

He and his associates surveyed about 400 psychology students aged between 19 and 21, studying at the SMU and the Northern Illinois University near Chicago in the United States, on their attitudes towards marriage, children and preferences when it comes to choosing a partner.

The study found no major differences when it comes to men: Both American and Singaporean men went for looks first. The second most important trait in a spouse for men was kindness and the third was a lively personality.

'Men are wired to go for looks,' he explained, adding that a woman's physical attractiveness is a visual cue for fertility. Features such as 'soft skin, full-looking lips and colourful cheeks' are not just attractive, but also associated with youth, which indicates a woman's fertility. That is why men tend to go for younger women, he explained.

Prof Li, a 45-year-old American-born Chinese, knows this first-hand. His American wife, Ruth, is 21 years his junior. Mrs Li, now a housewife, was his student when he was lecturing at the University of Texas at Austin before he came to Singapore in 2008. They have a two-year-old son, Jasper.

His research also showed that the pursuit of material success is at odds with the desire to settle down and have babies. 'Lots of past research have shown that the more materialistic you are, the less you place value on having friends and family,' he said.

It's a simple trade-off, he added. We have only so much time and energy, and chasing one goal means giving up another ideal.

Another possible factor has to do with one's source for fulfilment, whether it is strong family ties or material success. He said: 'If you have good relationships, you may not need to value material things because you already feel good.'

However, he noted that research has not determined which comes first: 'Do people pursue material goals and then abandon friends and family, or is it because they are no good at having friends and family and so they make up for it by grabbing onto material things?'

He said he decided to study Singapore's baby woes from a psychological perspective after learning that it was an utmost national concern. By and large, he noted, wealthier countries tend to have lower birth rates. Yet 'significant differences' still occur among countries which enjoy similar levels of economic development, he said.

That is why he decided to compare Singapore and the US. Singapore ranks ninth out of 229 countries, while the US takes the 10th place, in terms of per capita gross domestic product, according to the Central Intelligence Agency World Factbook.

Yet the US' total fertility rate (TFR) at 2.05 in 2009 was almost double Singapore's rate of 1.22. Last year, Singapore's TFR, which measures the average number of children a woman will bear in her lifetime, sank to a historic low of 1.16.

Only 37,967 babies were born last year, the lowest number since 2005 when Singapore saw 37,492 births, despite the surge in the number of new citizens and permanent residents in recent years. And only 24,363 couples tied the knot last year - the lowest since 2007, when 23,966 couples wed.

In a Family Research Network forum presentation on singlehood at the National University of Singapore last month, Prof Li pointed out that Singaporeans - both men and women - are 'significantly' less satisfied with life than Americans.

Americans scored an average of five, while Singaporeans came in at 4.38 in his study. The closer the score is to seven, the more satisfied with life the respondents are. Singaporean women were also found to be 'significantly' more materialistic than American women. They polled an average of 3.98, compared to the American women's score of 3.74. The closer the score is to five, the more materialistic one is deemed to be.

While the study did not ask respondents for the reasons behind their answers, Prof Li feels that the relentless rat race and high cost of living are possible reasons Singaporeans are less happy with life and are more inclined to go after money and success.

While it is expensive to live in major US cities such as New York or Los Angeles, there are plenty of places in the US to 'live comfortably' for a lot less money than in Singapore. 'It's not that hard to buy a house and car in the US,' he said.

Besides, with the globalised economy and outsourcing, Singaporeans are vulnerable to losing their jobs to a foreigner any time. 'People can't really relax. Can you really get to the point where you feel comfortable? People just don't get to that point any more,' he noted.

Also, Singaporeans, like other Asians, tend to worry more about life than Westerners, who are 'more relaxed' and more comfortable with facing the unknown.

'I think you have to work really hard and succeed before you can relax here,' he said. 'On average, people in the West are able to enjoy life as they go along. They are not going to kill themselves to succeed.'

So what is the bottom line?

He pronounced: 'Materialism is a double-edged sword.' While materialistic values spur the economy to greater heights, they dampens people's desire for family and children.

His research shows that people who are less satisfied with life and value material success more are less likely to view marriage and procreation 'favourably'. For career-minded women, having children - or more children for that matter - is a drain on their time and resources.

With more women taking on high-flying jobs and their expectations of their partners rising as their own earning power soars, he reckoned getting the dismal birth rate up will be 'very, very difficult' unless a shift in values away from materialism towards more pro-family values occurs.

But beyond saying that more monetary incentives are unlikely to spur the stork to visit more often, he refused to delve further into pro-natal incentives that will work, insisting that is not his area.

His research mainly explores 'what do people really look for in mates' and the science of attraction, love and lust in people, he maintained.

So has knowing all about women's psyche helped in his own pursuit of happiness? Prof Li is the first to admit he has had 'mixed success' and made 'lots of mistakes' in his love life, despite his vast research on the topic. His first marriage, to a former postgraduate course mate, broke down after four years due to 'different values'.

'There's a difference between knowing what you should do and doing it. Doing it is not always easy,' he said. 'I'm reasonably confident that I can tell when someone is interested in me. I can generally interest someone who might be interested in me but I could use more work in the relationship maintenance department.'

theresat@sph.com.sg

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  ASEAN Exchanges a step closer to trading interconnectivity
Posted by: Nick - 14-06-2011, 06:55 PM - Forum: Others - Replies (4)

http://info.sgx.com/webcoranncatth.nsf/V...F003ADA49/$file/06142011_ASEAN_Exchanges_a_step_closer_to_trading_interconnectivity.pdf?openelement [SGX Press Release]

Any views ?

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  Meet the supercar junkies
Posted by: Musicwhiz - 08-06-2011, 03:10 PM - Forum: Others - No Replies

Interesting way to spend your millions eh? Tongue

Tue, Jun 07, 2011
The New Paper
Meet the supercar junkies


By Joyce Lim

THEY do not need a test drive or even a viewing.

Some of them simply walk into a showroom and pay for their their million-dollar toys with cold, hard cash.

Welcome to the world of supercar buyers.

They are your property developers, top bank executives, lawyers, doctors and entrepreneurs. And they do not stop at just one car.

Take Mr Victor Ow, chairman and chief executive officer of the Clydesbuilt Group of Companies, for example.

Just last month, the 57-year-old property developer bought a limited-edition Lamborghini Murcielago LP 670-4 SV.

He already owns a Lamborghini Murcielago LP 640 model, a Ferrari F430, a Bentley Azure convertible, a BMW 7 series and a Chrysler Grand Voyager, which was delivered to him last Sunday.

He declined to reveal how much they cost.

Last Wednesday, just before The New Paper on Sunday met him at his home, he had placed yet another order.

It was for a Ferrari 458 worth over $1 million with COE.

Small fraction

He said of his love for wheels: "Each car I buy costs a small fraction of what I made in my property investments and projects. Seeing my car collection motivates me to take on my next project."

Mr Ow, who is married with a daughter in her 20s, is the only one in the family allowed to drive the supercars he owns.

His daughter drives a convertible which he bought her but his wife does not drive. She is happy to have him ferry her from place to place or simply hail a taxi.

Mr Ow has been in the property business for the last 30 years and has developed more than 10 residential projects. His latest is a cluster-housing project called Eleven@Holland.

He said: "Every night before I go to bed, I would walk around my garage to appreciate my cars. They are like art pieces to me."

Asked what his dream car is, Mr Ow replied: "All the cars I have now are my dream cars. I always tell my family that if one day, I don't wake up from my sleep, I want them to know that I have lived a happy life."

Mr Ow is not the only one with a fleet of supercars.

Industry sources said there is a Singaporean businessman who owns over 20 supercars and he does not drive all of them.

Mr Francis Lee, general manager of Stuttgart Auto, the official distributor of Porsche cars in Singapore, said it is not uncommon for their customers to own more than one Porsche.

"These customers usually come from affluent backgrounds or have higher incomes," said Mr Lee. Dealers of supercars here are doing a roaring trade. Just how good is business?

Well, in many instances, some of these models are sold out even before they hit the showroom.

Mr Ian Gorsuch, McLaren Automotive's regional director for the Middle East, Africa and Asia-Pacific, said that all 40 units of McLaren's first supercar allocated to Singapore have been sold out until the end of next year.

The highly-anticipated model, the MP4-12C, from the British manufacturer, was unveiled to prospective customers at the Red Dot Design Museum last week.

It is expected to cost close to $1 million with COE.

The Ferrari FF, which is said to be the world's fastest four-seater car, is also sold out.

The car, which costs $1.175 million (without COE), can go from 0 to 100kmh in 3.7secs and has a top speed of 335kmh.

Ital Auto, the official dealer of Ferraris here, would not say how many units have been sold, but disclosed that the wheels will arrive here only at the end of the year.

Last year, Ferrari's sales here more than doubled to 69 units.

As for Lamborghini, 54 units of Murcielago and Gallardo, including four unregistered Reventon limited-edition cars, were sold here.

Not bad, considering that Lamborghini delivered only about 1,300 cars globally last year.

No need to bargain

Unlike the typical car buyer who bargains when shopping for a set of wheels, those who splurge on supercars do not blink at the prices.

A Ferrari spokesman said: "Singapore has quite a mature market for supercars. Buyers are very well informed and most would have done their homework and made their decisions before coming to the showroom.

"Normally these buyers would know about the latest model at the same time as us. And when they call, the only thing they need to ask is usually the price."

Supercar buyers also do not need much time to mull over their million-dollar purchases.

Mr Brenur Ooi, 39, manager of Garage R, which imports supercars, said: "Supercar buyers usually know what they want. They would issue us a cheque right away if we are able to bring in the car for them."

"Price is seldom a deciding factor for them. They want to get the latest model in the shortest time. Some of them are even willing to pay more for us to parallel import the cars from the UK or Hong Kong, just so that they can get them earlier."

Singapore's leading race driver, Mr Melvin Choo, has also observed that supercar buyers here want the latest model.

He said: "When it is a limited edition or one that is hard to get, everyone will want to get it.

It's just like other luxury goods - there is always a nicer one around the corner."

Mr Choo has noticed how car makers are replacing models a lot quicker these day, in order to keep their buyers' interests.

Mr Ooi, who has sold supercars like the Nissan GT-Rs, Ferraris, Lamborghinis, Porsche, Aston Martin and Lotus, said that most of his clients do not keep their cars for more than three years.

Mr Francis Cheng, the owner of Supercars Concepts, which sells both new and used supercars, said that he has clients who sold their supercars after owning them for only three months.

He added that not only do supercar buyers not ask to test-drive the wheels, they would also buy them, new or used, without even seeing them.

Asked if these buyers take up loans for their purchases, Mr Cheng, 37, replied: "About 30 per cent of my buyers do not take a loan. Even when they do, they take up a loan of only 50 to 60 per cent of the purchase price."

Mr Cheng, who set up his supercar import and export business three years ago, said that in a good month, he can sell about 15 used supercars, including Lamborghinis and Ferraris. And 25 per cent of his buyers buy the wheels even though they cannot drive them.

He said: "Some of these cars are left-hand drives. These buyers can't drive them on the roads here. They still buy the cars and keep them in their garages.

"When the cars break down (through the lack of use), some of them would arrange for the cars to be shipped back to the manufacturers for repairs."

This article was first published in The New Paper.

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  The urge to trade could hurt
Posted by: Musicwhiz - 08-06-2011, 07:44 AM - Forum: Others - No Replies

Interesting study. It goes to show even the super-rich are not immune to human emotions of fear and greed, resulting in over-trading.

Business Times - 08 Jun 2011

The urge to trade could hurt


New poll finds that 41% of Singapore's rich believe they have to trade frequently to make money, reports GENEVIEVE CUA

NUMEROUS academic studies show that frequent trading can be damaging to your wealth, but the affluent in Singapore may be oblivious to that.

A global survey by Barclays Wealth has found that 41 per cent of Singapore respondents - with at least £pounds;1 million (S$2 million) in wealth - believe they have to trade frequently to make money. Yet they also wish they had more self control.

Says Peter Brooks, Barclays Wealth behavioural finance analyst: 'People want more discipline. When you have sizeable wealth to manage, the lack of discipline can be pretty harmful . . . Because people trade frequently, the returns they achieve can be lower than when they buy and hold.'

Barclays polled 2,000 wealthy individuals globally for the study, Risks and Rules: The Role of Control in Financial Decision Making. There were 500 respondents from the Asia-Pacific, and Singapore accounted for a fifth of that, or 100.

The report looks into different financial personality traits among the wealthy, and the self-imposed rules and strategies they use to deal with those traits. It says 'emotional' trading can cost investors nearly 20 per cent in returns over a 10-year period. Those who use some control strategies, however, have an average 12 per cent more wealth than those who do not use rules.

Control strategies include a cooling-off period that is typically a feature of investments funds, or a self-imposed practice of waiting a few days before making a decision. Yet another strategy is to set deadlines to avoid procrastination.

In Hong Kong, the proportion who feel they need to trade frequently is 46 per cent. The global average is 32 per cent; and those individuals are also three times as likely to think they trade too much. In Hong Kong, 55 per cent believe they are over-trading, compared to just 15 per cent among Singapore respondents.

Not surprisingly, 47 per cent of Singapore respondents are willing to bear high levels of risk to achieve higher returns. But 61 per cent are actually more concerned with preventing bad things happening than ensuring that good things happen.

'There's a slight disconnect between how people think about taking risk and achieving returns, and their focus on prevention. Those (elements) shouldn't really exist together; there is tension between the two.

'If you go down that road, you could become very stressed which can lead to a poor financial experience.'

Singapore respondents, in fact, report that they are more likely than their global counterparts to become stressed. They are also less likely to delegate financial decision making.

Paradoxically, the Singapore wealthy are the most satisfied with their financial situation (76 per cent) compared to the rest of Asia. The proportion in Hong Kong who are satisfied is 55 per cent, and in Japan it is 52 per cent.

Mr Brooks says the findings suggest that wealth managers have opportunities to provide advice on investment discipline and reduce the damaging effects of over-trading. 'Asset allocation and diversification are great for the long run but for individual investors the route along the way is important.'

Almost half of Singapore respondents wish they had more control over their financial behaviour, compared to the global average of 41 per cent. Globally, the need for increased financial discipline is likely to be felt by those at the wealthiest end of the scale (more than £pounds;10 million in wealth).

An earlier Barclays study found that 73 per cent of Singapore respondents felt financially responsible for their children - the highest in Asia. Mr Brooks said: 'These findings reflect the fact that Singapore HNWIs may let their emotions influence their investment decisions because of a deep sense of family. Even though local investors historically focus on careful planning, they should not shy away from seeking financial counsel.

'In many cases it may not only help them pass on wealth to future generations, but possibly grow their wealth by providing alternative investment options that are aligned to their personalities.'

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  SGX Proposes Rule Changes To Enhance Corporate Governance
Posted by: Nick - 02-06-2011, 07:59 PM - Forum: Others - Replies (1)

http://info.sgx.com/webcoranncatth.nsf/V...300397357/$file/06022011_Reg_Annmt_SGX_Proposes_Rule_Changes_on_General_Meetings.pdf?openelement - What do you think ?

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  New luxury online shopping portal - Clout Shoppe - launched
Posted by: Musicwhiz - 02-06-2011, 06:06 PM - Forum: Others - No Replies

Singapore is a big market for the rich and well-heeled!

Jun 2, 2011
New luxury online shopping portal - Clout Shoppe - launched

By Branden Ho

SINGPOST on Thursday launched Clout Shoppe, a luxury online shopping portal.

Clout Shoppe is targeted at the fast-growing market of discerning and internet-savvy consumers 'who appreciate value shopping for new luxury and designer goods without having to pay the high price', said SingPost in a media release.

Highlights of Clout Shoppe include time limited private sales, exclusive access to brands which are unique or unavailable elsewhere in Singapore, and a selection of internationally renowned designer brands exclusively for members. Maison Takuya, a luxury label famous for its exquisite range of exotic leather and Aurelio Costarella, a leading Australia designer label favoured by Rihanna, Eva Mendes, Tina Arena, Naya Rivera, Dannii Minogue and Dita Von Teese, are just two of these brands.

The public is assured of the products' authenticity as well as efficient delivery of orders, added SingPost.

Currently, Clout Shoppe offers women's fashion, accessories, beauty and skin care, with products catering to men, children and households to be added at a later stage.

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  Penny stock trading may get a boost
Posted by: Musicwhiz - 01-06-2011, 07:00 AM - Forum: Others - Replies (4)

Jun 1, 2011
Penny stock trading may get a boost

SGX's move to cut bid size could encourage more participation
By Goh Eng Yeow, Senior Correspondent

TRADING in penny stocks could ignite next month after Singapore Exchange (SGX) rule changes slash dealing costs.

The SGX will cut the bid size - the minimum difference between a buyer's bid and a seller's offer - for stocks priced below 20 cents to just 0.1 cent from 0.5 cents now.

The bid size for stocks priced between $1 and $1.99 will be cut from one cent to 0.5 cents, while it will go from two cents to one cent for stocks costing $10 or more.

In practical terms, the changes - which kick in on July 4 - mean stocks will move up in smaller gradations, which saves investors money when they buy while providing more options when selling.

Take a penny stock like Artivision Technologies. It ended six cents lower at 15.5 cents on a volume of 73.3 million shares yesterday.

Under existing rules, if it moved up one bid during the trading day, it would rise to 16 cents, as the minimum bid now is 0.5 cents.

But under new rules it would go up to just 15.6 cents so an investor would save $40 if he bought 10,000 Artivision shares under the new regime.

The SGX, which has been mulling over the changes for almost two years, said tightening bid sizes will result in an estimated $1.7 billion in annual savings, based on last year's market turnover.

Its head of securities, Mr Chew Sutat, said yesterday: 'Tighter spreads will encourage investors to increase their participation in the SGX. This will enhance liquidity in Singapore.'

The local stockbroking community has also welcomed the move.

Phillip Securities managing director Loh Hoon Sun said: 'It will promote trading in penny stocks and improve market liquidity... With the reduction in the bid size, a day trader will not have to wait as long for a stock to go up in order to sell.'

Many dealers also believe the reduced trading costs will offer another incentive to attract high-frequency traders - or algos - to the local bourse. The SGX plan to launch what is believed to be the world's fastest trading engine later this year has already raised hopes that this group of highly sophisticated dealers will make a beeline for Singapore.

Algos employ lightning-fast computers to try to make money on millions of swiftly executed trades.

Having a low bid size is crucial as they can use their computers to issue, then cancel, orders almost simultaneously in order to get the best pricing.

But trader Peter Ong is unhappy with the SGX's move. 'Currently, if I buy a stock which costs one cent apiece, I can try to sell it at 1.5 cents. I will make 50 per cent profit if the order is executed. With the revamp, I do not have this fat margin anymore.'

engyeow@sph.com.sg

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Business Times - 01 Jun 2011

LETTER TO THE EDITOR
Reducing securities minimum bid size may backfire


IT was announced yesterday that the Singapore Exchange (SGX) would reduce the minimum bid size for securities with effect from July 4.

For securities below 20 cents, the new bid size would be 0.1 of a cent; for securities from 20 cents to $1.99, the new bid size would be 0.5 cent; and for securities from $2 onwards the new bid size would be one cent.

The rationale is that this would improve cost efficiency and provide more trading opportunities.

The general feeling among industry participants is that this new policy might actually do otherwise, by further reducing trading volumes.

Fewer people will be inclined to trade as it will be much harder to break even or make money due to tighter spreads. Retail participation is already quite low. This new policy might exacerbate the problem.

Perhaps, if SGX is really interested in reducing trading costs, it could reduce its clearing fees from 0.04 per cent to 0.0025 per cent and do away with the trading access fees of 0.0075 per cent.

The Australian Exchange is currently charging clearing fees of only 0.0025 per cent.

In recent years, the Singapore Exchange has introduced new products such as Extended Settlement Contracts and Depository Receipts. So far, the market response to these products has been rather lukewarm.

Again, without adequate consultation with the industry, the Singapore Exchange decided to do away with the lunch-break, though this has not been implemented yet.

It would have been wise to follow the Hong Kong Exchange's policy of gradually reducing the lunch break instead of removing it at one go.

After the recent general election, the government has stated that it would communicate more with and listen more to its citizens.

Likewise, the Singapore Exchange should adopt a more consultative approach with industry participants as well as the investing public to establish a robust Singapore market.

S Nallakaruppan
Singapore

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  Trader admits to stock market manipulation
Posted by: Musicwhiz - 31-05-2011, 06:25 AM - Forum: Others - Replies (3)

Naughty boy! Some people are really desperate to make money, the illegal way!

May 31, 2011
Trader admits to stock market manipulation

He used real-time data to turn quick profit from buying, selling warrants
By Khushwant Singh, Court Reporter

A TRADER pleaded guilty yesterday to manipulating the stock market.

Sim Tee Yang had access to real-time data, including bids and asking prices, through his job with CIMB-GK Securities.

He used this information to quickly sell large quantities of a certain share. This pushed down the price of warrants, which are financial products linked to shares.

Sim snapped up the warrants at the lower price. He then pushed their value back up by buying shares, and sold the warrants for a profit.

The 44-year-old worked as a proprietary trader for the securities firm, a district court heard. This means he was trading with the company's money as opposed to customers'.

Profits would be shared equally between him and his employer.

In 2005, Sim started buying shares in CapitaMall Trust, which was traded on the Singapore stock exchange. The price of these shares was closely linked to the price of CapitaMall warrants.

According to one of the charges, he sold 37,000 shares in 47 seconds. This caused the price of the warrants to dip by three cents.

Seconds later, he bought 180,000 CapitaMall warrants.

Sim waited two minutes, then started buying CapitaMall Trust shares, driving the price up from $2.34 to $2.38, and increasing the price of the warrant from 53 cents to 55.5 cents.

He then repeated this trick. By the end of the day, he had made a profit of $3,840.

Sim used the trick again on 11 other days.

Between May and August 2005, his profit was $16,511.

The court heard that CapitaMall Trust had been listed and traded on the Singapore stock exchange since 2002.

When the offences were committed, its portfolio consisted of shopping malls such as Tampines Mall, Junction 8 Shopping Centre and Funan DigitaLife Mall.

The CapitaMall warrants were issued by Calyon Financial Products.

Its Hong Kong office would issue the market quotes for these warrants to brokerage firm CLSA Singapore.

CLSA would then transmit these quotes to the Singapore stock exchange trading platform.

Sim had access to this real-time data, and used it to help him commit his crimes.

The trader pleaded guilty to four counts of market manipulation.

Eight charges will be taken into consideration when he is sentenced on June 21.

Deputy Public Prosecutor James Lee told the court that on the days when Sim manipulated the market, he was responsible for between 97 per cent and 100 per cent of the trades in CapitaMall warrants.

Defence counsel Andy Yeo said he would need three weeks to prepare the mitigation because of the complicated nature of the case.

Sim, who wore a business suit in court, is out on bail of $100,000. He can be fined up to $250,000, jailed for up to seven years, or both.

khush@sph.com.sg

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