Date: October 31, 2014
Guest of Honour – Minister Lawrence Wong Minister for Culture, Community and Youth & Second Minister for Communications and Information
Mrs Lim Hwee Hua – Chairman, SIAS
Ladies and gentlemen,
15 years ago, an elderly distressed widow whose husband had ploughed half a million Singapore dollars into the Malaysian stocks found herself stranded when the Malaysian Government froze it. She was in tears when she called me on my hand phone just past midnight and pleaded with me to get back her money or else she had no other choice but to end her life. What would you have expected me to do at that moment, with my wife sleeping next to me and another woman weeping on the phone? I instantly became a psychologist and a pastor. Hold on to that thought for a moment.
Another incident that has lingered on in my mind throughout the 15 years of my stay in SIAS is the sudden appearance of an 84 year old grandfather who could barely walk and had to be helped by his daughter and a walking stick, and who insisted on seeing me without an appointment. I met him at the reception and to my utter disbelief; he told me that he had made a bundle in the stock market after attending our investor education seminars. I was shocked but was encouraged to know that our members, irrespective of age, were in fact making money in the stock market. He then pulled out a cheque for SGD 1000, and with a smile said ‘Thank you for helping me to make money’.
It immediately reminded me of the story in The Bible about Jesus Christ when he healed the 10 lepers, only one came back to say ‘Thank you’. Well, at that time, we had about 50,000 members.
There are many more such heart-wrenching stories but time does not permit me to share them tonight.
It’s been 15 long years at SIAS. Many of you know what we have done and, therefore, I will not revisit our history. SIAS has undergone different stages of evolution and has emerged as a panacea for small investors and their needs. It has grown from a staff of 2 to 18, a member base from 49,000 to 71,000 and the annual revenue from 775,000 to 2.1 million.
A recent Business Times front page article asked this pertinent question: “15 years on, is SIAS still relevant?” The answer …….is a resounding, yes!
Tonight, I will share with you our road map for the next 15 years which will fortify this answer. Permit me the liberty of introducing the new thought philosophy behind the acronym “SIAS”.
We now envision SIAS to stand for:
S for Shareholders activism,
I for Internationalisation of investor base
A for Advocacy for governance; and
S for Smart investing
This will fulfil the objectives of SIAS hereafter, which is to build an institution that helps to empower a responsible investing community to augment Singapore’s position as a leading global capital market. Let me elaborate:
1. Shareholder activism
This is our first mission. Why is shareholder activism important for Singapore?
It provides the necessary check and balance and promotes board accountability resulting in better corporate governance practices. This in turn has a domino effect on investment and builds confidence among investors, local and foreign.
From the beginning, in seeking accountability and resolving shareholder disputes, we chose not to adopt the traditional confrontational approach to shareholder activism, instead opting for responsible shareholder activism as the first preferred option. However, our sobriety should not be mistaken as a cloak of cowardice.
That said, we will continue with our tripartite approach to resolving issues with Boards, regulators and investors to maintain the investor relations peace in Singapore. This approach of ours has won the support of the boards and the regulators here and as well as many admirers outside Singapore, such as the Committee on Economic and Monetary Affairs of the European Parliament; US Department of Treasury; International Monetary Fund; OECD; Institute of Directors, UK; US Public Company Accounting Oversight Board (PCAOB) and SEBI of India.
We want shareholders not only to be educated and ask sensible questions at meetings; we also want them to move beyond knowing just shareholder rights, and take a longer term responsible view on their investments. This will enable more companies to set longer term goals, implement sustainable developments that bring sustainable earnings to all stakeholders.
2. Internationalization of investor base
Many of our companies are responsibly run, have good governance and steered by men and women of integrity. Whist it may be that nearly 70% of our listed companies on SGX are SMEs below $300m, and may not be known to the international investor community, it does not mean they are not investable. There are many gems amongst them. We are now in a position to bring these good companies to the attention of international investors.
Tonight’s award winners are judged on international OECD standards of corporate governance practices with inputs from Brendan Wood International, a reputed corporate intelligence firm in North America. We can proudly say that, our award winners have now been incorporated into an index known as the Winners’ Circle which can be found on the SIAS website. This enables our investors, both local and foreign, to connect with them.
You would be pleased to know that the award winners for the last five years have outperformed the STI index, which in itself is a phenomenal accomplishment. Ladies and Gentlemen, may we please recognize their achievements with a round of applause.
Going forward, we intend to further build on what we have already built to connect with investor blocks abroad to promote our companies, especially SMEs which are willing to work with us.
We have already connected with Brendan Wood International, Canada, and now the Middle East and other private equity funds. We will continue to do so to bring quality investors to them in the near future. These international investors will no doubt, find our well governed companies of investible standard.
Together, we can now set a goal for these $300m market capitalization companies, which are willing to grow and double their market capitalization to $600m or even more by working with SIAS in the next 15 years on a journey together. This mission for SIAS is an import one for our capital markets. We call on these SMEs to work with SIAS to make our capital markets a robust and attractive one.
3. Advocacy for governance
Our 3rd mission is the advocacy for governance. Singapore must have a voice in the international community to shape governance laws and regulations protecting investors. In this regard, I am glad to share with you that now, SIAS is well placed in the international community.
We are on the OECD Roundtable for corporate governance, we work with the United States Public Company Accounting Oversight Board, and securities commissions in the region. Many of the capital markets in Asia are also collaborating with us to know how we are shaping the investor rights and corporate governance practices here in Singapore. It is pivotal as it builds trust and lays the foundation for investing.
To internationalise our companies and broaden our investor base, we need to advocate best industry practices. As a small yet impactful country, we need to be working very closely with the regulators worldwide and the global community to promote financial stability. We cannot achieve this alone. Whilst we research and publish companies’ corporate governance practices, it is by working with you, the corporates of Singapore, that we can achieve this vision of ours.
4. Smart investing
Over the next 15 years, the 4th and final mission for SIAS is smart investing. I am happy to tell you that through the 960 programmes we have done, we have benefited 125,000 retail investors. What we want these retail investors to learn is smart investing and how to protect their principal through investing in different asset classes and how they can better plan for their retirement.
In this respect, SIAS would like to help retail investors by publishing 3 questions from companies’ annual report for them to raise at AGMs. Through better education, shareholder activism and trust, we can unlock some $55b sitting in banks in Singapore as savings and fixed deposits. It’s not just Singapore; Asia has a high savings rate and many are very worried about investing as they see this as high risk.
Our smart investing progamme, will help educate investors to understand the various asset classes, their risks and adjust risk appetite so as to achieve a higher rate of return from their investments.
While the local retail investor community is quite dominant in the market and should not be dismissed easily, more needs to be done. Following the penny stock crash last October, the trading volume on SGX dropped by 65% year-on-year, but the value traded had also fallen less by 30% indicating that retail investors have switched away from penny stock trading in favour of blue chip companies. Nevertheless, more need to be done in Singapore.
Current trading strategies are built around rumors and tips, and people often make investment decisions based on limited, poor, and incorrect information. The average retail investor does not have access to high quality independent information, research and analytics. That explains why the privileged outperform the markets, whilst the rest keep guessing why something worked remarkably well for others, but not for them.
This is where, I think, technology plays a crucial role as the lowest common denominator and helps to democratize information in the greater interest of investors. SIAS has now partnered with Singapore-based Trakinvest.com, a global premium virtual trading platform, which allows its investors to learn the nuances of online trading by providing free analytics, free research reports and social trading.
Through this partnership, technology, expertise and insights will come together to give people – experienced and new to the markets, a virtual avenue to explore and hone their trading skills which in turn will help them make informed and more thought through decisions when they trade in the real markets. This power until now rested solely with institutional investors. However, with the help of technology and SIAS-Trakinvest.com partnership, this will no longer remain true and retail investors will be empowered by building confidence and trust. Retail investors can access the TrakInvest platform from SIAS’s website as well as directly from Trakinvest.com
SIAS will also ramp up our Investment Chapters programme, a hands on experiential leaning, under a mentor, to help investors overcome their fear of investing by understanding the risks and their own risk appetite. We are also working with People’s Association to extend our reach into the community to help educate senior citizens manage their money and young adults to grow their money wisely.
All this would not have been possible without the strong support of our sponsors, who have remained steadfast in our mission to educate the Singapore investing public. I would like to extend my deepest gratitude to SGX, CapitaLand, DBS, Keppel Corp, ST Engineering, SingTel, SMRT, Singapore Airlines, SembCorp and Hong Leong. SIAS is also grateful to sponsors of tonight’s event, all the donors to our 15th Anniversary celebrations, table sponsors and the 125 organizations who came forward readily to take part in the corporate statement of support. (They deserve a round of applause)
As a closing quote, let me remind you of an old Wall Street saying, “The market is weird. Every time one guy sells, another one buys, and they both think they’re smart.”
Perhaps, God did indeed create stock analysts so as to make weather forecasters look good. But jokes apart, the market are yours and so is the nation. We all need to form a good human huddle to make the markets tick and usher in an era of transparency, emboldened shareholder activism, reach out transnationally, wave the banner of good governance and most importantly, invest smart.
For the gentlemen in the room, you would be successful if you made more money than your wife can spend. For the ladies in the room, go find such a man.
Last but not the least, I would like to thank my staff led by Pauline Soh for their excellent hard work to make this whole week’s event, a great success.
Thank You and enjoy the evening!