1996: Curbs take property market by surprise

A RUNAWAY property market led the Singapore government to fire off a surprise barrage of measures in 1996 aimed at curbing speculation.

The array of measures followed multiple angles of attack. Some of those measures included capping housing at 80 per cent of a property's value, banning foreigners from taking Singdollar home loans, imposing taxes on gains from sales within three years of the initial purchase, and additional stamp duties. The government also lifted the supply floodgates, increasing the pace at which land for private housing was released, from 6,000 units in 1996 to between 7,000 and 8,000 in 1997.

The measures worked with startling efficacy. The private property market, which had risen sharply between 1992 and 1995, began a tumble in 1996 that stretched through the bottom of the Asian Financial Crisis in 1997 and 1998.

Beyond the property market, the Singapore government was also looking to restructure the telecommunications space by breaking Singapore Telecommunications' monopoly.

Of course, SingTel was by now a publicly listed company, and one could not end SingTel's monopoly without also hurting SingTel's shareholders - many of whom were retail Singaporeans. A price tag of S$1.5 billion was eventually agreed upon as compensation to SingTel for changing the rules of the game.

Today, Singtel operates alongside StarHub and M1 as large telecommunications operators in Singapore, and a fourth telco is in the pipeline.

The Barings collapse was now a year in the rear-view mirror, but the aftermath continued to capture interest. Liquidators of Baring Futures (Singapore) sued the firm's auditors, Coopers & Lybrand and Deloitte & Touche, for S$2 billion in one of the largest lawsuits at the time.

Coopers & Lybrand would eventually settle the suit for about £65 million, while Deloitte would be found responsible for only a fraction of the losses incurred by Baring Futures.

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