Lost due to collapse of Lehman Brothers

Since the collapse of Lehman Brothers (14 September 2008), the fourth largest investment bank in US, the horror of impact to investors in Singapore surfaced over the past week.


Minibond was a structured investment product linked to Lehman. Many retail investors placed money in this product hoping to receive interest payment of about 5 per cent a year and the full principal sum on maturity few years later.


The scales of these issues are estimated be into millions.

– Minibond Series 3 – S$200 million (Source: The Straits Times, 19 September 2008, by R Sivanithy)

– Minibond Series 5 – US$44.95 million (Source: The Straits Times, 23 September 2008, Advertisement by Note Trustee)

– Minibond Series 6 – US$28.12 million (Source: The Straits Times, 23 September 2008, Advertisement by Note Trustee)


Another investment product linked to Lehman which was in the news include DBS High Notes 5.


What saddened me was that retirees were putting their lifetime savings into these products. Some retirees withdrew their CPF money and invested them in these products without fully comprehending the risks. One retiree invested $125,000, part of CPF money, in DBS High Notes 5. That amount was lifetime earnings accumulated in CPF while working as a clerk for 30 years. Another invested $25,000 so as to provide for her son’s overseas study in the future. This became remote possibility now. (Source: The Sunday Times, 21 September 2008)


These are two of the many affected by the collapse of Lehman Brothers, going by the sheer size of these issues. I am sure that these investors are having a rough time thinking of their finances right now. As this is water under the bridge, life still continues and the sooner we accept the fact that investments have lost their values, the better we are in coping with moving on.


Written on 9/23/2008 11:14 AM


Copyright © 2008, the author known as LKT in Singapore.


The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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