PUBLICITY CAMPAIGN ON INVESTMENT IN SHARES

Mr Chia Shi Teck asked the Minister for Finance if he will state (i) the reasons for the Government's publicity campaign to get Singaporeans to invest in shares; (ii) the target group it hopes to reach; and (iii) the cost and success of the campaign so far.

The Minister for Finance (Dr Richard Hu Tsu Tau): Singapore Telecom's (ST) listing in a few weeks' time will be the largest listing so far in Singapore. Through the ST listing, and the sale of Group A ST shares at a discount to citizens, the Government is promoting long-term, widespread share ownership. This will give Singaporeans a direct stake in the country's success, and enable them to share in its prosperity.

Currently, out of 1.9 million adult Singaporeans, only 250,000 have ever owned shares. Of the 700,000 CPF members who qualify for the CPF Approved Investment Scheme, 120,000 have actually bought shares under the scheme. To promote widespread ownership, we need to raise the level of awareness and knowledge of shares among the general population. Hence the publicity campaign.

The programme is targeted at the entire adult population of Singaporeans, especially those who are unfamiliar with shares. It has two objectives: general share education, putting across the basic facts about shares as a form of investment, the potential risks and rewards, and the mechanics of buying and selling shares; and specific information about ST's listing, especially the offer of Group A ST shares.

The total cost of the public programme is estimated at $3.6 million. This is small compared to the magnitude of the education effort required, and to the size of the ST listing. As a percentage of the proceeds from the ST listing, it is less than the amount spent on similar public education programmes in other privatisations overseas, for instance, the British Telecom listing.

Our surveys have shown a high level of awareness of and interest in the ST listing. Many of those surveyed have said they intend to buy ST shares, although we will not know how many actually do so until the actual offer. We should be able to achieve the target of doubling the present number of share owners in Singapore.

Mr Chia Shi Teck (Nominated Member): Sir, it looks like the publicity is meant to get Singaporeans to invest in ST shares. Is that the case?

Dr Richard Hu Tsu Tau: Yes, that is the primary reason although in the process there is a wider education programme which is linked to it, ie, to make people understand the purpose of shares and the risks involved. Having learned how to buy ST shares, there is also definitely the possibility that they will buy other shares which are more risky and they should know the consequences.

Mr Chia Shi Teck: Would the Government openly tell Singaporeans to invest in proper blue chip shares in Singapore as 70% of daily trading are on Malaysian OTC shares and the lure of easy money may get Singaporeans burnt?

Dr Richard Hu Tsu Tau: Singaporeans who use the CPF share programme are only allowed to buy trustee stocks. To that extent, they are already limited in the range of shares they can buy. They are not allowed to use their CPF savings to buy shares on the Clob which are highly speculative, as the Member has said.

Mr Chia Shi Teck: Sir, will this euphoria, when Singaporeans make money out of these shares, lead Singaporeans to think that this is an easy way to make money rather than to actually work?

Dr Richard Hu Tsu Tau: That is indeed a risk. But we cannot totally eliminate this risk and I am afraid that some people who have a stronger gambling instinct are likely to get burnt. I just hope that people will use their discretion and get burnt lightly before they learn a lesson.

Mr Chia Shi Teck: The Minister has just said yesterday that the instinct in Singaporeans is that they would gamble and with this publicity for easy money, would it not aggravate the problem?

Dr Richard Hu Tsu Tau: The campaign is not to make easy money. It is to teach them to invest in blue chips like ST which is part of the Singapore economy. Our hope is that they will confine their purchases to the blue chips in companies like ST, SPH, SIA and so forth which are part of the Singapore economy, and not speculate on companies without any assets where they are likely to get burnt.