Banks in Singapore are known to be safe and relatively conservative institutions. But that doesn’t mean they haven’t sold products to unsuspecting people. People who shouldn’t be any where near the sophisticated instruments.

Products appealing to the Asian investor

Let’s take a look the average Asian investor, what are they concerned with? Most “investors” in Singapore seem to be concerned with loss avoidance. People are afraid to lose money. This leads to bonds being very attractive. Bonds are “safe” because of these properties

1. Principle is returned on maturity
2. The interest rate is guaranteed
3. If the company goes bankrupt, bondholders are paid first from any remaining cash

So looking at these points, it seems like a bond is almost like a fixed deposit. The main difference is point 3. A bond is a loan to a company. Have you ever had to get a personal loan from the bank? The bank ......