The Singapore Business Federation's (SBF) suggestion to use Central Provident Fund (CPF) money to "liven up" the local stock market and provide more capital for local companies is not sustainable ("'Use CPF money to help liven up local stock market'"; yesterday).
Listed companies are already capitalised via their earlier initial public offerings. If there is a need for more funds, cash calls from shareholders can be made via rights issues or private placements of stocks. These additional funds can help pay off debts and support further expansion of companies.
Injecting CPF funds and boosting trading volumes and increasing share prices are of little help if a company's fundamentals are not properly addressed in the first place.
Moreover, the current global downturn of financial markets is not a "Singapore-only" phenomenon.
The SBF's suggestion also lays unwarranted risks on CPF members as compared with the fund's current, almost risk-free, structure.
CPF members are already investing in equities via the CPF Investment Scheme.
Unfortunately, a report last year found that only 15 per cent of members bested the CPF's underlying rate of return of 2.5 per cent while 40 per cent lost money ("Many CPF investors get their fingers burnt"; June 15, 2015).
Singapore and its local companies have gone through a number of financial downturns in the past few decades, including the 1997 Asian financial crisis, Sept 11, 2001 terror attacks on the United States, 2003's Sars health crisis and 2008/09's Lehman Brothers meltdown.
Yet, local companies showed much resilience in such trying times. Business associations, such as the SBF, also stood steadfastly alongside their small and medium-sized enterprise members without asking for the Government to inject CPF money to simply "liven up" the anaemic stock market.
Many countries and central banks have tried to meddle unsuccessfully with their financial markets. Let us not go down this road, much less with CPF money.
Ewe Seow Chie (Ms)