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2009: Dealing with a crisis

Property cooling measures; first dip into national reserves; S-chip scandals.


THE world spent much of 2009 dealing with the impact of the global financial crisis, and Singapore was no different.

Residential property prices shot up in the immediate aftermath of the crisis as Singapore’s economy proved its resilience and interest rates fell to historic lows amid unprecedented central bank accommodation. Having hit a post-crisis low of 95.3 in the second quarter of 2009, the non-landed private residential property price index quickly rebounded to end the year at 118.4, close to pre-crisis levels.

The climbing prices showed no signs of slowing, and fears of a bubble grew. The Singapore government imposed the first measures aimed at cooling the market to the chagrin of many developers. It would take about four years before private residential property prices would finally recede, and many of the cooling measures remain in place today.

Extraordinary times called for extraordinary measures, and the traditionally fiscally conservative Singapore government sought to calm its own waters by dipping into the nation’s reserves for the first time.

The budget’s request to draw S$4.9 billion was also the first test of the elected presidency’s "second-key" power over the reserves. Then-president SR Nathan promptly gave his approval, and that fiscal initiative has earned commendation for helping to maintain confidence in the Singapore economy during the crisis.

The worst of times also tend to reveal weaknesses that are easy to hide in the good times. Scandal after scandal from China-based issuers on the Singapore Exchange finally prompted the market regulator to propose a number of changes to the listing rules aimed at addressing questions about governance, accountability and recoverability.

But the damage had already been done. The flood of S-chip listings that had generated excitement and optimism in the past several years had turned out to be tainted.

The Business Times has been there to report and analyse the most significant news since 1976. Every week, this feature will showcase excerpts from the biggest stories for each year that the paper has been in operation. The full text of all the stories can be found online at

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