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1989: S'pore, M'sia sever stock market links

Turn of decade brings end to Siamese twin markets, new focus on Singapore Inc, protests in Tiananmen.


THE stock markets of Singapore and Malaysia share a common past that goes back to the founding of the Singapore Stockbrokers' Association in 1930.

The ubiquity of cross-border listings and trading persisted between the "Siamese-twin" markets even after the 1965 split between the two countries, but that union began to unravel in 1989.

A number of reasons were cited for the split, including differences in trading systems, commissions and regulations. Kuala Lumpur Stck Exchange (KLSE) chief executive Nik Mohamed Din bin Datuk Nik Yusoff told The Business Times on Oct 12, 1989: "Sometimes we can't tell what's causing our market to move, whether it's something in Singapore or some local factor."

KLSE took the first step on Oct 26, 1989, giving Malaysia-incorporated companies until the end of the year to delist from Singapore. One month later, the Stock Exchange of Singapore followed suit, giving Singapore incorporated companies the same deadline to delist from Malaysia.

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To satisfy Singapore investors' appetite for Malaysian investments, the Central Limit Order Book, or Clob, was eventually created. Almost a decade later, Clob itself would become the centre of another market controversy as Malaysia imposed capital controls to battle the Asian Financial Crisis.

The turn of the decade brought changes and new directions.

To position Singapore for its next stage of growth, top civil servants and business leaders assembled to lay the foundation for Singapore Inc, a key marketing strategy as the nation wooed foreign investors.

Further afield, pro-democracy protests erupted in China as the Cold War began to thaw. The most visible demonstrations took place in Tiananmen Square, where the Chinese government ordered a violent crackdown seen around the world. The violence led to a run on the Bank of China in Singapore by depositors worried about the bank's viability and by supporters of the protestors.

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