Taming the lion city
Several retail collateralised debt obligations have been launched in Singapore in recent months, and investors have become more familiar with the products. But how well do they understand the risks?
Banks have for years been trying to kick-start the retail market for synthetic collateralised debt obligations (CDOs) in Singapore. The problem in the past was that distributors refused to market a product they felt was too complex and risky for retail investors, a perception reinforced by the spike in volatility in credit markets after the collapse of Italian food group Parmalat in December 2003, say bankers.
Yet that mindset is changing, and retail distributors in Singapore have
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