This beats all the interviews which the media try to squeeze out of fund managers and sophisticated investors on what they plan to do, since the trail of money does not lie.

So last week as the Nikkei-225 Index plunged a dizzying 10.55 per cent on Tuesday, and then recovered part of its losses the next day, it had me wondering about what really happened.

The standard explanation you get from any dealer is that it was a dead cat bounce, prompted by hedge funds buying back stocks to cover back the “short positions” the previous day.

But if this is the case, then how do you explain that even before Tokyo opened for trading on Wednesday, the iShares MSCI Japan fund – the most widely traded fund on Japanese stocks in New York – had already regained much of its earlier losses.

It took a few days for the mystery to be unravelled.

As the Tokyo market was experiencing its wild roller-coaster, it turned out that there was massive buying of the iShares MSCI Japan fund in New York – to the tune of almost US$1 billion in the week to last Wednesday.

Some analysts have reckoned that the Bank of Japan was behind much of the buying.

Come to think of it, that shouldn’t come as a surprise.

The mighty BOJ had injected a massive 38 trillion yen ($622 billion) into the financial system to keep Japanese banks and insurers running. It had also intervened in the currency market to stop the Japanese yen from rising sharply and escalate the already serious problems faced by the depressed Japanese economy due to the earthquake.

And why should it stop there? The equities market needed to be stabilised too, since the Nikkei-225 is one of the most widely watched indexes in the financial world – a bearer of good or bad tidings, so to speak.

So, it is not surprising if the BOJ did venture into New York to buy up the iShhares MSCI Japan fund.

Flushing the fund with cash will, in turn, trigger it to buy up more shares of the component stocks which make up the MSCI Japan Index and this will, in turn, lend support to the Nikkei-225.

This is because the Nikkei-225 and MSCI Japan share many stocks in common.

Tottering Tokyo

And as I had pointed out in my previous blog, efforts to support the tottering Tokyo market have another beneficial effect.

Just the top three Japanese banks hold US$1 trillion worth of Tokyo stocks. As such, any calamitous drop in these equities will seriously erode the capital base of these Japanese lenders and restrict their ability to lend. This would be equivalent to pulling the umbrella on a rainy day when it is needed most.

As I write, the Nikkei-225 is up 2.94 per cent, as Tokyo reopens for trading after a public holiday yesterday.

But I am not comfortable with the suggestion tossed by some analysts that the BOJ is printing Japanese yen to buy foreign assets.

When the United States central bank printed US$1.75 billion in fresh dollars in 2009 and another US$600 billion last year to try to put the troubled US economy back on the road to health in what is known as Quantitative Easing One and Quantitative Easing Two programmes, the money was used to buy US government bonds and other US assets. In other words, the money was spent inside the United States.

But analysts are raising the possibility that the BOJ should print money to buy up other countries' assets. Now, if that is the case, it is very different from the approach adopted by the US Fed. I don't believe that the BOJ should take this approach as it will not go down well with the rest of the world.

The earthquake and tsunami that had devastated much of northeast Japan is a truly horrendous human disaster. It will also be difficult to quantify the impact of the crisis brewing at the stricken nuclear plant near Tokyo.

But there will be even more chaos if printing money is seen to be the solution to all economic and financial ills. Just imagine what will happen if other countries resort to similar tactics ?

It may well spark off another round of international competitive devaluation which will be detrimental to us all.

Between Monday and Wednesday, BOJ injected a triggering 28 trillion yen ($466 billion) to stop Japanese banks and insurers from crushing under the impact of last Friday’s devastating earthquake and tsunami.

And as panic spreads over Tokyo over the possibility of radiation contamination from the earthquake-struck nuclear reactors in nearby Fukushima, the BOJ swung into further action this morning.

As I wrote this, I saw a flash on my TV screen that it is pouring another US$63 billion ($80 billion) into the financial system today.

So in only four days, the BOJ has spent the equivalent of two-thirds of the US$600 billion which the US Fed said in September 2010 that it would print, to try and jumpstart the frail US economy.

But unlike the sum spent by the BOJ in days, that sum earmarked by the Fed was supposed to be spent over several months.

The funds which BOJ is making available to Japanese banks is ostensibly to enable them to keep lending to customers. This will keep the troubled Japanese economy running.

It will also keep at bay the systemic risk that comes from banks and businesses refusing to do business with each other, for fear that some may collapse and drag them into bankruptcy too.

The massive intervention by the BOJ has another use: It has considerably slowed down the plunge of the Tokyo stock market.

It raises the question as to whether some of the money has leaked to support the tottering Japanese markets.

Despite the Simex Nikkei-225 futures flashing red and plunging by almost 6 per cent before Tokyo’s opening bell this morning, Nikkei is down by only 2 per cent currently.

The steadying of the Nikkei-225 has also taken some of the wobble off the STI and the Hang Seng.

Tuesday’s 11 per cent plunge in Nikkei-225 may have pushed some of the weaker Japanese banks close to busting their capital adequacy ratios. This is the minimum capital which each bank must hold before it can lend out any money.

The UK-based Daily Telegraph noted that Japan’s top three banks own US$1 trillion in Japanese stocks. Thus any precipitous drop in Nikkei will carry a systemic risk as well.

The rationale is simple: If a top Japanese bank doesn’t have enough capital on its books, it can’t lend any further. This will lead to a credit crunch which will hit the broader Japanese economy.

The next 48 hours will be crucial for Tokyo.

By Saturday, we should know if the fight to contain the radiation contamination risk from the stricken Fukushima nuclear plant is successful, or whether a wider evacuation will be in the pipeline.

Now that is one scary scenario which even the mighty BOJ will find unsettling. 

My friends said I was very lucky. As of today, I am exactly back from Japan for a month.

Just four weeks ago, I was happily in the now disaster-struck Sendai region, bathing in the hot springs and enjoying the excellent food served up by the inns there.

It must be a huge nightmare now, seeing the ongoing update given by the various TV stations on the impact of the earthquake and the subsequent tsunami on Sendai and the surrounding region.

I wonder what has happened to the scenic Lake Tazawako region – an hour by train from Sendai – which I have made a point to visit each time I am in Japan.

And as I write, the tremors in the jittery Japanese stock market are beginning to be felt in other Asian markets.

In all, the Nikkei-225 Index has fallen by almost 14 per cent since the earthquake erupted last Friday.

Almost half of its loss was due to a knee-jerk sell-off Tuesday morning as the Japanese government warned that radiation levels at one damaged nuclear plant in Fukushima had reach levels which might harm human health.

And that had horrendous consequences on regional markets – with Hang Seng plummeting 3.5 per cent, Shanghai falling 1.8 per cent, and the STI here down 2.24 per cent.

FAVOURITE STOPOVER 

Now Fukushima city is one of my favourite stopovers – a modern metropolis whose train station boasts a tasty and inexpensive sushi outlet. It is only 1 ½ hours away from Tokyo and many of its inhabitants work in Tokyo.

And that is the scary part: The nuclear plant, which is located near Fukushima, is close to Tokyo, and it is threatening to spring a radiation leak.

If that unthinkable event happens, it will be a disaster of epic proportions all right, given the millions of people who live in and around Tokyo.

So, I am not surprised that the nervous Japanese stock market is reacting in the way it did this morning, with the Nikkei-225 plunging about 6.5 per cent.

The earthquake and subsequent tsunami in Japan had coincided with the second anniversary of the bull-run triggered off by the apparently successful efforts of the US Federal Reserve and other central banks in staving a collapse in the global financial system two years ago.

Now with the possibility of another huge calamity unfolding before our eyes, I am wondering who will ride to the rescue this time.

Many writers have praised the Japanese for their extraordinary discipline in the face of such a big disaster – the lack of looting, patient queuing at half-empty departmental stores and the helping hand extended to others in need.

But tough questions will also need to be raised on the use of nuclear energy. "How could it be that there are so many nuclear plants dotted in Japan, all so close to the coastline?" one Japanese professor asked.

To complete this blog, I would like to share a picture of myself at the Lake Tazawako region before the horrendous Japanese earthquake. Who would have believed one month after this picture was taken that such a huge disaster would have overtaken Japan?

SOME readers have asked me for my views on the punishment being meted out to lawyer Peter Madhavan who is the first independent director in Singapore to be given a jail sentence over a misleading statement.

Just to recap first for those who have not followed the story closely, Madhavan was on the board of a then SGX-listed company, Airocean, and the statement was related to the company's former chief executive Thomas Tay who was the subject of a criminal probe.

There are two points that I want to highlight:

First point to note is that after the probe, Thomas Tay was subsequently put on trial. But his penalty was financial in nature. He was fined $3000 for attempted bribery and another $240,000 for disclosure lapses and making misleading statement.

Madhavan was, however, handed a jail sentence. He is appealing against both his conviction and jail sentence.

The second point to note is that while the misleading statement had been put on the SGX website by Airocean’s board, the role of each of the three former directors, which had been charged for making the "misleading" statement to the SGX, was examined separately, and the punishment doled out accordingly.

This seems to indicate that while the accuracy of a statement put out by a company may have been the collective responsibility of the board, this does not absolve each director of individual blame if a mishap were to occur.

So what is an investor to make of the latest development and its impact on corporate governance in Singapore ?

The irregularities at Airocean had occurred so long ago, that few readers now remember what had transpired.

But the spate of S-chip scandals is still fresh in our memory and we had a rude reminder just last week when another two – China Hongxing and Hongwei – were suspended from trading due to accounting irregularities.

This has again triggered a big outcry among aggrieved investors here that there seems to be no way to make the errant bosses of these scandal-hit companies accountable for their actions because they are based in China.

True, there may be no way currently to bring any errant China bosses back to Singapore to face the music unless they voluntarily agree to come here, like what China Aviation Oil's Chen Jiulin did years ago, since there is no extradition agreement between China and Singapore. But the catch is that each time before a company issues its interim results, its board has to come out with a "negative assurance" that nothing had come to its attention to make the results "materially false or misleading".

So I am not surprised to find awkward questions being raised of the negative assurances which had been issued by the boards of scandal-hit firms just a few months before accounting irregularities had been uncovered in them during the annual audit.

As I observed in yesterday’s Cai Jin column, the Airocean's case sends a strong signal to independent directors to take their watchdog role seriously.

And when it comes to a weighty matter like issuing a 'negative confirmation' for a company's results, they should break ranks and refuse to go along with the rest of the board if they are not comfortable - or face possibly painful consequences.

This is in view of the precedence established in Airocean where the role played by each director was scrutinised.

One other point – I will not be surprised if some independent directors insist on getting the company’s auditors to look through the numbers and get some comfort before they issue any negative assurance – or stage a walkout.

That will jack up the costs of running a listed firm here, but that can’t be helped, given the angry mood among investors over the accounting scandals that have again resurfaced on the S-chip sector.

engyeow@sph.com.sg

FORMER US Defense Secretary Donald Rumsfeld has an amazingly simple way of describing risks.

There are known unknowns and unknown unknowns, he declared in his recent memoir which was aptly named Known and Unknown.

Now, Libya is an unknown unknown. It is quite difficult to predict at this point in time how the increasingly bloody uprising against its leader Colonel Gaddafi, is going to pan out.

As such, the world’s financial markets are obligingly reacting in a knee-jerk fashion to every twist and turn in crude oil price as it reacts to each development in Libya.

And when US Fed chairman Ben Bernanke stated the obvious that high oil prices will spook the fragile recovery in the US economy last night, Wall Street promptly plummeted on the news.

But in our own backyard, we have a known unknown – China Hongxing Sports.

For a few years now, pointed questions have been raised about its reluctance to pay out a good dividend to shareholders, even though it was sitting on an apparently huge cash hoard.

Better still, as I pointed out in today’s news analysis, its auditors for the past five years suddenly quit in October.

That, by itself, is an ominous development. Now to replace auditors just before an annual audit is conducted, a company has to convene a meeting of its shareholders to explain its reasons for doing so.

With the benefit of hindsight, it appears that the company’s shareholders had waved the change through, without probing the management deeply enough about such an abrupt change.

SUSPENDED

Still, I am amazed by the anguish expressed by them, when it was suspended from trading last week.

Some of these investors also wanted trading in the stock to continue, presumably to give them an opportunity at least to try to liquidate their ill-starred investment.

Having covered the markets for more than two decades now, I agree with the Singapore Exchange’s stand that allowing China Hongxing to carry on trading will hurt investors even more.

One key feature of our caveat emptor regime or "buyer beware" regime is to ensure a smooth flow of information so that investors can make an informed decision on whether to buy or sell a stock.

But when accounting irregularities appear on a company’s books, it is simply impossible to make any informed decision. Those who want to take their chances in the face of such unknowns, should really try their luck at the two casinos.

In any case, Sino-Environment provides one good example as to why trading in a troubled counter should have ceases, until all the problems had been sorted out.

Some readers will recall that I wrote a commentary in November 2009 asking why the counter was allowed to trade for six months, after it was obvious that it would be brought down by the problems engulfing it.

And while these investors were happily trading the stock, a subsequently released PWC report showed that the management made a number of further questionable deals. Sometimes, allowing a troubled counter to trade, may lull investors into a false sense of security that everything is well when it is not.

In today’s news analysis, I also mentioned that China Hongxing took a stodgy five months to report a series of sales by a then-substantial shareholder, JF Asset Management.

In September 2009, I had spotted the delay in the disclosure and pressed the company hard for an explanation.

At the back of my mind even then, I was quite disturbed by such a big lapse in disclosure, given the ugly precedent established by another failed company, China Sun Bio-chem, which also failed to promptly disclosed details of sales of its shares by Temasek Holdings some years earlier.

I do not want to wade into the huge debate over the reliability of analysts' report, following the tiff between Olam International and a CLSA analyst over her analysis of the company’s accounts.

But it takes a brave analyst any time to make a sell call when everyone in town is wildly in love with a stock.

And while traders like to boil down everything to a simple buy or sell call, the truth is that things are not so simple. I can only say that the devil is in the details. Things are never quite in black and white.

It brought to an end an astounding seven-week rally, as traders reacted to the unfolding events in Libya whose embattled strongman – Colonel Gaddafi – is reportedly trying to cling on to power.

Over here, an uneasy calm appears to have descended on the local market, with the benchmark Straits Times Index holding precariously to the 3,000-point support level.

As I noted earlier, it is too early to make an informed decision as to whether the market has fallen to an attractive level yet for investors to start hunting for bargains.

The scant information coming out of Libya does not give any investor much solace that its problems would be settled any time soon.

But the hands of history rest heavily on financial markets, as they await the outcome of the Libyan uprising against Gaddafi.

I find myself reading up Wikipedia’s account of what happened to Somalia – another African country – after the downfall of its strongman Said Barre in 1991.

Somalia is now described as a failed state, caught up in a civil war among various rival tribal factions. It also grabs our attention in a dramatic manner from time to time, as pirates operating from its long coast-line along the Horn of Africa hijack ships plying the Indian Ocean.

What I find intriguing is that Libya, like Somalia, was an Italian colony until it gained independence.

And like Somalia, Libya is divided into various tribal factions and presided by a strongman, in this case for the past 41 years.

Of course, I hope the similarities end there. More than 100 years after the European colonial powers carved up the African continent among themselves, the impact of their actions is still reverberating today.

But unlike Somalia, Libya is a major oil producer. Any disruptions in its oil wells will have dire consequences on the world’s energy supplies.

The jitters had already sent Brent crude soaring by 5 per cent to US$111 a barrel – a 2 ½ year peak.

And if energy prices stay stubbornly high, it may stir up inflationary pressure across Asia which is already struggling to cope with rising prices.

The Financial Times noted this morning that at least half of Libyan oil production might have already been knocked out by the unrest, as Western oil majors pull their staff out of harm’s way.

It also published a telephone interview it had with Saadi Gaddafi, one of the Libyan strongman’s seven sons, who claimed that the country was “very calm and very safe”.

His father would play a “big father” role in the new order, he added.

One British newspaper picked up a blog by former US vice-presidential candidate Sarah Palin asking why the White House had been swift to put out a statement about the devastating earthquake in New Zealand but nothing on the slaughter on Libya.

But the astonishing speed at which events have been enfolding in the Middle East and North Africa has caught governments and investors elsewhere wrong-footed. Mubarak, the long-time ruler in Egypt, was ousted in only 18 days. There is no easy response to a fluid situation which changes daily,

Just ask Hyflux. Three months ago, it was on top of the world as it unveiled its ambitious expansion plans in Libya. It was clear blue sky with nary a cloud in the horizon to mar its triumph in creating a bridge-head into Africa’s largest oil producer.

But investors must have been spooked by the manner in which the company had tied up its fortunes to North Africa, going by the battering its share price had taken in the past week.

And I repeat my earlier advice – stay on your toes. Libya may turn out to be one of those so-called “Black Swan” events which may have a big bearing on your investment portfolio.

One remisier sent me a note this morning to say that he got a few calls from clients asking if it was time to start picking up shares again.

It is an indication that investors view the correction as an opportunity to enter the market at a more attractive level, and not simply the start of another bear market where they will merely be throwing good money after bad.

Still, I agree with the remisier’s assessment that it is still too early to commence any bargain-hunting in earnest.

It is simply impossible at this stage to forecast how the Libyan crisis will pan out.

Unlike Egypt or even Tunisia, where the revolution now sweeping the Middle East started more than a month ago, Libya is an enigma with a regime which has been in power for the past 40 years – and no conceivable alternative leadership in sight.

And reading some of the Western newspapers, you get a sense that the country may simply break up into its various warring tribal factions, if the present government loses power.

Given the lack of clarity of the situation, it is going to be difficult to make an informed investment decision on whether it is time to enter the market again, hence the note of caution.

What compounds the problem is that, again unlike Egypt and Tunisia, Libya is a major oil producer and its problem is causing crude prices to rock and roll as they react to each development filtering out of the country which is now closed to the Western media.

While most of its oil is shipped to Europe, any disruptions in its oil supplies will have worldwide reverberations.

The volatility in oil prices is, in turn, sending shock waves across bourses across energy-hungry Asia which is heavily reliant on Middle East crude.

As I write, the benchmark Straits Times Index has fallen 48 points, or 1.6 per cent, its worst one-day loss in two weeks.

It would be interesting to watch how Wall Street reacts tonight to the latest conflagrations in the Middle East, since it was closed for a public holiday yesterday.

The Year of the Golden Rabbit has turned out to be anything but tranquil so far. We are having to cope with wild hops in the market which give us vertigo.

Exchange-traded funds are pools of money raised from investors which aim to invest in baskets of stocks which track widely-watched market indexes, or precious metals like gold which require cumbersome security measures and storage space.

It may come as a surprise that highly-paid professional fund managers, who spend all their time poring over stocks, should underperform the stock indexes.

Out of curiosity, I decided to go one step further, and looked up the Bloomberg data on how the most highly-rated STI stocks at the start of last year actually performed.

The results turned out to be quite startling, and gave the sub-editor the opportunity to put a catchy headline to it: Bull's eye or just bulls ?

Some of the best-rated stocks like those of United Overseas Bank and DBS Group Holdings actually fell in value in the past 12 months, even though STI chalked up double-digit gains.

Better still, some of the least favoured STI stocks among analysts last January like Genting Singapore and Jardine Matheson turned out to be big winners.

I am not suggesting that investors should look for the ugly ducklings among this year’s STI component stocks and take a bet that they will outperform the STI again.
But I suspect that there may be some correlation between the two observations – ETFs outperforming unit trusts and analysts’ judgement getting awry over their most highly-rated calls.

But ETFs – which track stock indexes – reflect the workings of an efficient market, with its price tracking the movement of the index each time it reacts to fresh news affecting the component stocks in its make-up.

For analysts and professional fund managers, the best way to make money is to find gems which have been mispriced as they have been overlooked.

But there is likely to be a time lag to them reacting to any major news break affecting the counters which they are holding.

Like the rest of us, fund managers are also human beings – and their investment decisions may be coloured by emotions too. There may just be a natural reluctance for them to take losses immediately in the event of a negative newsflow.

In the past few months, I have taken a more investment education approach in my columns. The best way to ensure that a Lehman-style rip-off does not recur is to make sure that investors understand the ABCs of what they are getting into. And if even I don't understand a certain investment, despite having tracked the financial markets for the past 25 years, I am sure that most other investors will be in the same quagmire.

The United States (US) Fed has kept interest rates at almost zero for almost two years now – and that is unprecedented in modern history including the dark days of the Great Depression more than 80 years ago.

With so much liquidity awash in the financial system, fears have arisen of the asset bubbles that may spring up in Asia.

As such, I highlighted in Monday’s Cai Jin column that the smart money appears to be switching out of outperforming markets like Indonesia – as measured by the redemptions out of funds investing in Asean markets, and into the depressed markets of Europe and the US, given the perception that regional stock prices may have run ahead of valuations .

But as I suggested in Sunday’s Small Change column, there is no need for investors to fret about missing out of the stock market rally, as there will be plenty of buying opportunities any time a spate of bad news hits the market.

I like the advice from CitiBank that the grind higher must always mount walls of worries.

It appears that the advice may be apt for Citi investors too. After an exuberant run-up which sent Citi’s share price soaring past the US$5 mark last week, disappointment over its quarterly results sent its share price tumbling by 6.43 per cent last night.

Buying the dips may be sound advice. But it is easier said than done.

In the past five years, the first week of trading had always been a good guide on how the market will behave for the rest of the year.

Thus, in 2007, when a tidal wave of foreign money swept across Asia in the first week of January, regional markets went on to experience record high levels for that year, even though August that year marked the start of the Asian financial crisis.

And the start of trading in 2008 was dampened by a huge fall in stock prices. Markets ended that year with its biggest drop in percentage terms in nearly a decade.

The past two years had been marked by rises on the first few days of trading, and prices had obligingly ended higher in 2009 and 2010.

So if the trading trend in the past two days and this morning is any guide, markets are likely to be marked by alternate bouts of exuberance and pull-backs, before ending higher for the year.

In other words, it will be a good year for investors who want to hold on to their purchases, or traders who can ride on the price swings to generate trading profits.

MORE INTEREST

What is also telling is the number of calls I get from friends and contacts asking about the stocks they should pick up in the coming months.

As a market writer, I do not make stock recommendations, but the phone calls I get is a gauge of the buoyant mood among investors. The risk aversion has been banished and people are looking forward to trying to make some money again.

With cash giving almost zero returns and property prices hitting sky-high levels, I am not surprised that people are rediscovering the fun of stock investing once more.

CNBC’s Jim Cramer observed that investors should use the pull-backs like those sales held regularly by huge departmental stores, to draw in the crowd. "When they throw a sale at Macy’s, you buy more stuff. You don’t panic and run screaming from the mall," he said.

Still, I will advise investors not to treat any market pull-back as a signal to buy across the board.

Investors should still do their homework before making any foray into the stock market.

In a globalised trading environment, they should not confine themselves to the local bourse, but scout around for bargains across different markets.

Happy New Year – and invest wisely in 2011.

OCBC fired the first salvo earlier this year when its newly acquired private banking unit Bank of Singapore, started to partner with carriers like Cathay Pacific and Singapore Airlines, to get its name out to well-heeled travellers.

This is how it works. You recline in your airline seat and when you switch on the in-flight entertainment system, out pops a short clip extolling the virtues of the Bank of Singapore.

The awards the bank picked up this year are also prominently highlighted in the video.

Bank of Singapore chief executive Renato de Guzman says the campaign – it amounts to a quarter of the bank’s advertising budget this year – has worked so well that it is in talks with other airlines to explore similar opportunities. It is targeting not just travellers living in Singapore, but also people in the greater China region.

Not to be outdone, DBS announced this month that its new TV commercial will also run on the in-flight entertainment systems of Asian airlines like Singapore Airlines, Cathay Pacific and China Airlines (note: these airlines all fly frequently to the mainland).

This is all part of the bank’s new $30 million branding campaign across Asia to help drive its expansion plans.

The campaign – which will go out across television, print, cinema, radio, online and outdoor – will target the key markets of Singapore, Hong Kong, China, India, Indonesia and Taiwan.

I don’t doubt the benefits of branding. It increases awareness and recognition for one’s products and services, differentiates a firm from its competitors, and creates a positive spin in the minds of the targeted markets that is emotionally connected with their daily lives.

BRAND IDENTITY

Don’t forget, it could increase sales and enhance customer loyalty too. But it won’t be easy to build brand identity in certain markets.

Take China for example. China’s Big Four banks come up in the top 10 most valuable Chinese brands in the latest report by Millward Brown’s BrandZ Top 50 Most Valuable Chinese Brands.

Their network and distribution channels make them more entrenched in the lives of people there, so Singapore banks, which lack the presence and reach of Chinese banks, will find their ongoing brand building initiatives challenging.

As HSBC has found, it can have ads plastered on airport walls and street corners about how it is the “world’s local bank” but at the end of the day, it isn't going to guarantee performance in all markets.

In Europe and Asia, HSBC is thriving, but in the US, its showing has arguably been quite a disappointment. In 2008 and 2009 alone, HSBC’s North American operations recorded a combined pre-tax loss of US$22.8billion.

One thing about branding is that it has to be consistent. It is pointless having a good vibe for a few weeks that cannot be sustained over a longer period of time.

DBS should know about this. In the same month it announced the branding initiative, it was caught squarely in the news about how an Australian client is suing the bank.

The client claimed that DBS made fraudulent and negligent representations that a US$1.5 million ($1.96 m) Lehman Brothers-linked investment was “sound”.

To be sure, DBS has denied the allegations, but bad publicity indubitably erases much of the wonders a $30 million campaign can achieve.

Another thing that calls for some attention. United Overseas Bank has been conspicuously lying low this year with regards to branding.

Maybe it will show its hand in 2011.

gabrielc@sph.com.sg