In an article published in the Business Times on 9 April 2019 on retail investors blaming the ATM for offering easy access to subscribing for Hyflux perpetual securities, and hence for losing their for losing their savings following the bankruptcy filing of the water and power company, Stefanie Yuen Thio said that a potential investor should not invest without acquainting himself with the terms of the bonds and the key risks, which will be set out in painful and laborious detail in the prospectus.

She added: “I’m not sure the disclaimer language at the ATM is that significant to an investor making a decision to subscribe. Surely by the time his ATM card has been inserted, he would already have made a judgment call to put money in a security offering. I think the real problem is that while Singapore’s securities market has grown in sophistication and complexity, the Singapore retail investor has not kept up. And when there’s market excitement about a new form of security (such as a ‘perp’), the retail buyer’s fear of missing out propels him to put his money in without being aware of the risks.”

A case in point is perpetual securities, which the market loosely terms a “bond”, she said. “This can be misleading as there is no assurance when – or if – the principal will be repaid. Investors also pin too much hope on what they consider ‘too close to Government to fail’ companies, thinking that a high profile business that Temasek had previously invested in cannot stumble. Business downturns are par for the corporate course and we cannot rely on the perceived government connection to assure financial salvaging.”

The story may be found here (BT Paywall)