SHARE INVESTMENT (Education and publicity)

Mr Chia Shi Teck asked the Minister for Finance, now that the Government has succeeded in getting over 1.4 million people interested in shares, whether it will spend money to further educate the population on proper share investment as against share speculation through a sustained publicity blitz.

Dr Richard Hu Tsu Tau: Mr Speaker, Sir, as part of Government's programme to promote widespread ownership of valuable national assets, Government ran a month-long share education programme just before the flotation of Singapore Telecom. The programme was aimed at educating Singaporeans on the essentials of share ownership. Its key message was that while shares would broaden an individual's range of assets and could be valuable long-term investments, there were risks involved and prudence should be exercised in selecting the companies to invest in.

The programme was successful in encouraging more Singaporeans to own shares. Before the ST flotation, only 250,000 out of 1.9 million adult Singaporeans had ever bought any shares. Of the 700,000 CPF members who qualified for the CPF Approved Investment Scheme, only 120,000 had actually bought shares under the Scheme. For the ST flotation, 1.4 million Singaporeans subscribed for and were allocated shares in the company. In view of the coverage and success of the programme, there is no need for Government to launch another programme on share investment in the immediate future. If there is a need to, it can be done again when other Government agencies are subsequently privatised.

Let me stress again that Government is not compelling or inducing anyone to buy shares. The share education programme was to help Singaporeans make informed decisions about whether to invest in shares, taking into consideration their family circumstances and financial resources. They must learn that share prices can go up and down, and choose carefully which companies to invest in. They should take a long term view, and not enter the stock market for quick gains. Most importantly, they should avoid buying more shares than they can afford, or borrow to speculate. Investors must recognise that the higher potential return from stocks and shares reflects the greater risks involved, and should therefore be prepared to risk losses when markets turn down or companies get into difficulties. However, investors who buy good quality shares in markets with strong fundamentals should be able to ride through market fluctuations, provided they have not bought beyond their means with borrowed money.