‘The Monetary Authority of Singapore (MAS) and Singapore Exchange (SGX)
today released a joint consultation paper setting out proposals to
strengthen the securities market in Singapore.
The proposals follow an extensive review by MAS and SGX of the
securities market in Singapore. The review concluded that while the
securities market remains sound, there were three areas for improvement:
• promoting orderly trading and responsible investing;
• improving the transparency of market intervention measures; and
• strengthening the process for admitting new listings and enforcing against listing rule breaches.’
It is timely that MAS and SGX finally find a need to take a look at the
health of the stock exchange and are inviting feedbacks on what needs to
be done to make the stock market a more resilient and sustainable
institution for the long haul. The objectives of this exercise are
posted above, copied from SGX.
For all intent and purpose, this is a move in the right direction, a
sign that things are not doing well and to take a serious look at the
problems before it falls apart. On the other hand, this exercise tells
another depressing story. The proposed changes and the need to ask the
layman public on such serious and technical issues that require the
technical knowledge of experts and thinking people in the industry says
that MAS and SGX do not know what is wrong with the stock market. It is
doing fine, just a little cosmetic changes and it will look pretty
again.
Or, it may be that they know what is wrong but are turning the other
way, not wanting to face the uncomfortable truth and wishing that
everything is fine. There is no elephant in the classroom.
The public, even the stakeholders, if they are not willing to put on
their thinking caps to look seriously into the problems that led to the
current pathetic state of the stock broking industry would at best
scratch the surface of a systemic problem and would make a few cursory
or casual remarks and suggestions and thinking the problems will go
away. From my experience, many are still totally ignorant of what is
happening and the real causes of the failing market.
The stock market is in the critically ill stage and needs immediate
resuscitation if it is not to collapse into a coma. And the proposals
made by MAS and SGX are not encouraging. It is like a patient dying of
syphilis and the doctors are recommending treatments for measles, for
acne, and for insect bites. Unless MAS and SGX are serious to want to
save the stock market from its certain demise, this exercise would be a
waste of effort and time.
To be able to come up with effective measures to save the stock market,
it is paramount that they know what is wrong with the market. What are
the causes that are contributing to a market in distress. If they are
chasing after the shadows, what good would come out of it? If they don’t
even know what is wrong with the market, what is there to do to right
the wrongs?
Another very important factor that can make this exercise real, if real
solutions and tough measures are to be taken to revive the market, is
professional expertise. You need people who know what they are saying,
to know what is wrong and what needs to be done, and most of all, have
the credentials and authority to tell the SGX that these things must
change. Recommendations made by the public, or the stakeholders, could
simply be ‘pooh pooh’ away by the SGX for obvious reasons and by the
authority vested in them as the incumbent officials. They would flash
their badge of professionalism and expertise and simply claimed that
they know best and what they are doing are the best, and nothing
meaningful will be accepted. Who is in a better position to go against
the gods?
What can the other stakeholders do when authority and power are vested
in the office bearers at SGX to make them change a flawed system?
The MAS should engage foreign experts that have the knowledge and
authority to tell the SGX what needs to be done to save the industry.
Here we are talking about real talents, people like Paul Volcker and the
critics of the NYSE, of how the NYSE has been turned into a scam, a
casino instead of a stock exchange. The western model stock markets,
including SGX, are no longer stock markets for investment but for pure
gambling, not even for speculations.
Now who is saying that we should not encourage a gambling mentality in
the stock market when the stock market has been redesigned into a
casino? There is no elephant in the classroom if one does not want to
look at it.
This is just my general comments on this exercise. I will submit my
views on what is wrong and what needs to change, and I will submit it to
MAS and SGX even knowing that it would likely end up in the thrash bin.
No one, not even the broking houses, would be in any position to make
serious and important changes to the right the wrongs in the stock
market if the authority in MAS and SGX do not want to see the wrongs and
do not want to make changes to a system they think is doing fine.
For real changes to be effected, you need the pros that could speak to
the MAS and SGX on equal terms and have the clout and confidence to make
them do the right changes against their objections. The govt must spend
this money if they do not want to see the worse from happening.
The few proposals put up by MAS/SGX would have little impact on the
general health of the stock market, and some would actually hasten its
demise if implemented. It just shows the level of thinking and
understanding of what is happening to the stock market. They are
refusing to remove the blinkers and are trapped in an old mindset
programmed by the so called experts, to see and say the right things
that are really frivolous.
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