Moving on...

It is indeed a sad day for me this Halloween... an uncle of mine has moved on to the next world, after a long drawn struggle with cancer. Leaving behind him 3 young cousins still schooling...

Life is fragile, and good men die young.

Halloween

Today is Halloween, and though in the past, it was never a real event in Singapore, recently, it has sort of caught up, such that people at least mention it over the radio. I guess it must be a result of globalisation, with Western traditions slowly seeping into our Oriental cities.

A theory on electricity prices

Recently, our electricity suppliers announced that they are going to increase the price of electricity. The reason? Rising oil prices being forecasted. It has raised quite some public feedback, citing that price determination in the electricity market is not transparent.

Why would they say that oil prices are rising, when they have actually fallen over the past few weeks?

I think it is due to the privatisation of our electricity market.

A successful campaign by the government to save electricity has actually resulted in people in Singapore using less electricity. What does this mean? Revenue for the electricity supplier has actually fallen.

But a private firm is governed by profit maximisation, as classic economics theory will tell you. And in an inelastic demand market such as electricity (you can only cut down your use by so much before it doesn't make sense anymore), a rise in price will see a less than proportionate drop in quantity demanded. What this means is that by raising prices, the company actually realises more revenue. And at less cost. Which means higher profits. Which for a private firm is actually not a bad thing at all.

Yet not a good thing at all for the general public. Which is why we need to avoid monopolies. Which is why we need government watchdogs to police our electricity supplier to ensure that it does not work against public interest for its own interest. Let's hope the watchdog actually does its job, rather than sing the same tune. After all, oil prices really are dropping. Just drive out to the petrol kiosk and take a look.

Treat foreigners with respect

This is a letter to Straits Times Forum page, published today, by Mr Thomas Hwang.

I guess Singaporeans need to realise that we were once all foreigners, just that our forefathers happened to come to Singapore earlier than others, and thus we are Singaporeans while others are not. Yet an immigrant nation needs to remember that we are made up of immigrants, and thus we must be willing to remain open to immigrants as they come and go, just as we come and go. At the end of the day, we are all human beings working hard towards fulfilling our own goals and dreams.

Risks of investing

The recent economic downturn has left many people in deep trouble. Such as retirees who invested in products that have since gone bust.

But to me, the real problem could well be the banks and their relations managers. Every bank wants to sell its investment products, but relations managers must not prey on the old. People are greedy by nature, but preying on greed and ignorance is downright wrong. Yes, there are risks to investments, and I am sure that the relations managers did highlight the existence of risks. But are the relations managers trying to help their customers, or trying to help themselves?

A responsible relations manager looks long term, and introduces investment products suitable for the person's taste of risk and current financial status. After all, I am sure banks would rather have returning customers, instead of having people call them asking for their money back. If all relations managers are responsible, we won't have retirees asking for their money back, since they will have understood the risks involved, and are probably able to take that risk.

So maybe this is a chance for people to relook into how they should be investing. It is a lesson with a high price, but maybe it will teach banks that they need to train their relations managers to be responsible, to introduce the right products to the right person, and not just look at churning out the dollars.