Limit block bidding for COEs by dealers

There have been calls to prohibit motor dealers from bidding for certificates of entitlement ("Dealers' bids don't reflect true value" by Mr Darren Ong Soon Siong; Tuesday and "Put COE bidding in hands of buyers, not dealers" by Mr Richard Chan Yong Huat; Jan 26).

But many car owners do not have the time to bid for COEs themselves and need the assistance of motor dealers.

Unfortunately, motor dealers manipulate the market, judging by the way they dump their bids at the last 15 minutes of the bidding period, similar to what happens at the stock market.

This defeats the Government's intention of making the bidding process transparent through its online portal where bids are reported continuously.

A possible solution is to allow block bidding only during the first two days of each bidding period, that is, on Mondays and Tuesdays, and only private individual bidders are allowed on the final day, Wednesday.

In this way, motor dealers can put in their genuine bids while individual owners can have a better picture of whether to bid on Wednesdays, after the big fish have had their meals.

While this proposal may not solve the issue of high COE prices, it could certainly help to reduce the distortion caused by the last-minute dumping of block bids, making the bidding process more transparent.

Francis Zhan Jun Shun

A version of this article appeared in the print edition of The Straits Times on February 05, 2016, with the headline 'Limit block bidding for COEs by dealers'. Print Edition | Subscribe