Market watchers say greater need for investor self-education in 2010

Market watchers say greater need for investor self-education in 2010

By Desmond Wong

SINGAPORE: Market watchers said that due diligence and the need for self-education are the biggest lessons of 2009 that investors should take into the year ahead.

Citing moves like the Singapore Exchange’s corporate governance proposals, they said there is more information than ever out there and investors should take the time to understand it before wading in.

In a market facing corporate scandals and mistrust over complex financial instruments, investors have had to learn some hard lessons.

But as bodies like the SGX push for greater transparency, market players said investors will do well to take advantage of the greater amount of information that is available to them.

James Sim, president and chairman, Financial Planning Association of Singapore, said: “I think it’s a positive move towards market-based regulations.

“With the introduction of transparency in corporate governance for stock exchange listed firms, what the investors see is what they get, and this is a positive thing in that they now have greater protection and confidence in what they are buying.”

But even as the market place becomes more transparent, observers said investors should take the time to carefully assess information on companies and investment products on their own.

They added that investors should also educate themselves in risk management and corporate due diligence. They noted that many investors have yet to understand these basics, potentially putting their investments at risk.

Christopher Tan, treasurer, SIAS, said: “To me, the willingness to take risk is really the last part. You may be very willing to take risks but if you have no need to, and you can’t, then you really shouldn’t. But I think what we’re lacking here is that when investors go in to invest, they don’t consider that. They just think of the returns that they want and they go in.”

Mr Sim added: “When you do not understand the fundamentals and when there is any trouble in the market, you won’t know how to react. You tend to react irrationally and that’s the reason why you could lose more than you can afford.”

All in all, market watchers said that 2010 will be a more challenging year for investors as economies pull themselves out of the recession. And they stressed it is more important than ever for investors to do their own independent research if they want to make it through the year. - CNA/vm

Source : Channel NewsAsia - 24 December 2009

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Integrated Resorts in Singapore upbeat about outlook in 2010

Integrated Resorts in Singapore upbeat about outlook in 2010

By Wong Siew Ying

SINGAPORE: Three years in the making and Singapore’s two integrated resorts will finally open soon and the operators are upbeat about the prospects.

Resorts World Sentosa, due to open in a matter of weeks, expects to attract 13 million visitors in the first year alone.

The resort said it has been receiving thousands of enquiries from the public everyday. And one of the most talked about attractions is Universal Studios. The theme park is expected to attract some 30,000 visitors each day.

Visitors will encounter ferocious dinosaurs, Egyptian mummies and if that is not thrilling enough, a pair of duelling roller coasters should do the trick.

Resorts World Sentosa said with 60 F&B outlets, six hotels and retail options, there will be no lack of things to see and do.

Noel Hawkes, vice president, Resort Operations, Resorts World Sentosa, said: “We’ve got Michael Graves studio - Michael Graves being the man who designed the entire resort.

“We’ve got a Chihuly studio - Dale Chihuly is probably the most famous artist and maker of fabulous glass pieces, which by the way, he will have many pieces on display within the casino and in our Crockfords tower.”

And over in the downtown area, construction of the Marina Bay Sands resort is progressing well. The resort is touting its crown jewel in the form of the huge Sands SkyPark which sits 200 metres in the air, linking the three hotel towers.

The SkyPark will feature a public observation deck, landscaped gardens, outdoor pools and F&B options. Its massive convention space, at 120,000 square metres, will also bring over 150,000 delegates to the resort from 2010.

On the lighter side of things, the award-winning Broadway musical “The Lion King” will be making its Southeast Asian premiere in Singapore.

Thomas Arasi, CEO, Marina Bay Sands, said: “The Lion King is going to stimulate a lot of interest and a lot of curiosity. Once we move further down in our programming, it’s later on in the property’s development, but the same will occur with our second theatre.

“We are also getting a lot of buzz now and it will really pick up in the first and second quarter, about the compendium, the assortment of celebrity chefs restaurants that we have coming in.”

And those feeling lucky will clearly be hoping to take on Lady Luck in the casinos at the two resorts. - CNA/vm

Source : Channel NewsAsia - 24 December 2009

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MAS seeks power to seize troubled insurers

MAS seeks power to seize troubled insurers
Regulator also aims to raise compensation limits to boost protection for policyholders

By CONRAD TAN

(SINGAPORE) The Monetary Authority of Singapore (MAS) is seeking sweeping new powers to seize insurers in distress and to supervise their liquidation to protect policyholders.

It also wants to raise the limits on the compensation offered by the policy owners’ protection fund (PPF) schemes for both life and general insurers, to better protect policy owners.

The PPF schemes were introduced in the Insurance Act in 1986 to compensate policy owners if an insurer defaults, but they have never been activated. In December 2005, MAS said it was reviewing the PPF schemes to ensure that they remained relevant, and issued its first set of proposed changes to the schemes.

This included a move from a post-funded approach (where insurers pay up only after a default occurs) to a pre-funded approach - where insurers make regular payments into the schemes.

In a consultation paper published yesterday, MAS said it was proposing changes to the Insurance Act that would give the regulator powers over insurers similar to those it already has over banks in Singapore.

That would include the right to take control of an insurer, sell or transfer its assets and liabilities if the firm is failing, or - if it has failed - to force a sale of the entire company to another insurer.

Under the proposed changes, MAS would also be able to apply to the High Court to block any attempt to sue or wind up an insurer if MAS has seized control of the firm.

The main priority ‘is to secure continuity in insurance coverage, particularly for life insurance policies’, if an insurer is in distress, MAS said.

Any voluntary schemes of transfer of life insurance portfolios would also require MAS approval before being submitted to the High Court for confirmation.

For insurers that have gone into liquidation, MAS wants the power to approve the appointment of a liquidator and to impose its own conditions on the liquidator.

Liquidators would be required to sell or transfer a failed insurer’s portfolios to other insurers and continue with the business of the insurer until the transfer is completed.

The proposed changes would also give MAS the right to appoint an independent actuary to assess the value of the liabilities to be transferred, to protect the failed insurer’s remaining policyholders and other creditors.

Finally, if a distressed insurer enters into a scheme of arrangement with its creditors - in an attempt to restructure its debts to avoid bankruptcy - MAS must also be party to the scheme, under the proposed changes.

The proposals would give MAS the right to force a restructuring or outright sale of an insurer as long as it considers it in the public interest to do so. That includes situations where MAS believes that an insurer is likely to become insolvent.

‘I think this is something that has been brewing for the past few years,’ said the head of one insurance firm here, who spoke on condition of anonymity. ‘A few years back, there were some insurers that were technically insolvent. From that experience, MAS realised that they needed clearer regulation for them to act fast and decisively.’

In September 2002, MAS ordered general insurer Cosmic Insurance Corp to stop accepting new business, to protect its 26,000 policyholders after the insurer failed to maintain a large enough buffer of assets in excess of its liabilities.

In a separate consultation paper, also published yesterday, MAS proposed to provide for 100 per cent coverage of protected liabilities of all life, and accident and health (A&H) policies under the PPF life insurance scheme, up from the 90 per cent coverage limit proposed earlier. The protected liabilities of a life insurer under the scheme are the guaranteed portions of the sums assured and surrender values of its policies at the end of each year.

Similarly, MAS is now proposing to cover 100 per cent of liabilities of all general insurance lines protected under the PPF general insurance scheme.

‘The life insurance industry endorses the stated objective of providing policy owners with certainty of coverage and better protection, and hence supports the change proposed by MAS, to raise the compensation coverage from 90 per cent to 100 per cent of protected liabilities of all life and A&H policies, subject to aggregate caps where applicable,’ said Darren Thomson, president of the Life Insurance Association.

‘However, all the proposals, including the new ones on giving MAS more specific powers to deal comprehensively with an insurer failure, will be closely studied by LIA members for industry feedback to be communicated back to MAS.’

Both papers published yesterday can be found on the MAS website, and comments should be submitted by Jan 29.

Source : Business Times - 24 December 2009

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