2000: Millennium bug bites

SINGAPORE might have survived Y2K, the programming bug that threatened the operations of global corporations due to fears that computers would not correctly interpret the new year as 2000. But that start-of-the-year relief soon yielded to three disruptions of a different kind.

Tech stocks came crashing down in the early part of 2000, the height of the dotcom bubble. Tech-heavy Nasdaq in April saw the single biggest overnight selldown of 7.6 per cent or 349 points, following which regional tech stocks took a hammering. Singapore tech stocks such as Creative Technology that were soaring just before this plunged up to 50 per cent from their recent highs.

Analysts pointed to a deflating dotcom bubble, and cautioned Singapore investors to stay clear of tech stocks until the turbulence in Nasdaq subsided. One said: "When 60-yearolds who have never touched a computer start piling into Tom.com, you have to start worrying."

There was a shakeout in Singapore's stockbroking industry by end- 2000, barely three months after stockbroking commissions were lowered and liberalised, while overhead costs remained unchanged.

Summit Securities was first to call it quits on falling margins, dismal trading volumes, and failure to find a larger partner with which to tie up. Meanwhile, UBS Warburg and OCBC Securities had finalised talks on a joint venture, making it the second JV in the market after Kay Hian merged with UOB Securities to form UOB-Kay Hian.

Local banks were made to shed their non-financial businesses under new rules designed to strengthen the domestic banking sector. This meant the sale of equity stakes valued at some S$1.5 billion in 11 listed companies, including OCBC's interests in Robinson & Co and Straits Trading and UOB's in Haw Par.

In April 2000, then Deputy Prime Minister Lee Hsien Loong, who was also chairman of the Monetary Authority of Singapore, said that banks were "not property companies", and that the separation of their financial and non-financial activities would be a major change for them.

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