Singapore may pay $0 for water plant that cost investors millions ~ 22 Mar 2019
https://www.bloomberg.com/news/articles/2019-03-22/singapore-may-pay-0-for-hyflux-water-plant-as-rescue-falters
Loot a burning house (趁火打劫)
https://kknews.cc/history/2m6qzrz.html
趁火打劫是指趁人家失火时去抢劫。
The CLOB Revisted Is there an end in sight?October 26, 1999
If there is one business story in Southeast Asia that simply refuses to go away, it is the CLOB crisis. For those who have been on the moon for the past 14 months and have missed all the action, let me recap: CLOB stands for Central Limit Order Book, a secondary market in Singapore that traded mainly Malaysian stocks. In its heyday, transactions on the CLOB far exceeded the transaction volumes for Singapore shares listed on the main board of the Singapore Stock Exchange. At one time market value of CLOB shares was between US$15 and $20 billion. During the Crisis, Malaysian Prime Minister Mahathir and his associates accused Singaporeans and CLOB shareholders of subverting the Malaysian economy. In September of last year, when Mahathir imposed capital controls and pegged the Ringgit at 3.80 to the dollar he also banned the trading of Malaysian shares overseas -- effectively pulling the rug out from under CLOB. Since then 180,000 shareholders holding $4.3 billion in Malaysian shares listed on CLOB have not been able to trade their shares.
Malaysia now says CLOB was an illegal market -- even though Malaysians accounted for 20% of total CLOB trading and two Malaysian-controlled brokerages were among the biggest players in the CLOB market. Malaysia doesn't want CLOB shareholders to get their shares back because it believes they will immediately sell them and that will result in the depletion of $4.3 billion in foreign exchange reserves. But by denying the CLOB shareholders their right to sell the shares, Malaysia has sent the wrong signals to global investors who are encouraged by Kuala Lumpur's economic recovery story and want to invest in the bourse.The CLOB overhang is keeping them away. Realizing that the issue is hurting Malaysia, Kuala Lumpur has been at pains to resolve it. The only problem: some troubled Malaysian companies see the resolution of CLOB as a good opportunity to make money.
In the past six months, five officially-backed schemes to resolve the stalemate have surfaced and have all been rejected by CLOB shareholders. Normally, the Singapore government would not intervene in something like this, but because 180,000 or so of its 3 million citizens are involved Singapore leaders have been forced to speak out. Singaporeans want a fair and equitable solution to CLOB. They want Malaysian regulators to either a) hand the shares back to their rightful owners so that they can trade them whenever they like; or b) allow an entity -- like the Tracker Fund that Hong Kong has just launched following its own share-buying binge last year -- to buy out shares at market value.
Last week, United Engineers (Malaysia) or UEM -- a Malaysian construction and infrastructure group controlled by Halim Saad, a close friend and former business associate of Malaysian Finance Minister Daim Zainuddin -- unveiled yet another plan to entice CLOB shareholders to part with their shares. The buzz in Singapore and Kuala Lumpur is that a final solution could now be near.
Before I go any further, let me bring you up to date with all the CLOB schemes that have failed. Earlier this year, Singaporean businessman Akbar Khan, a horseriding pal of Prime Minister Mahathir and a close friend and associate of Daim, unveiled a plan to buy all the CLOB shares from Singaporeans at up to a 70% discount to the then-prevailing market price. The response was overwhelming: NO. Who in his right mind would want to sell shares at a 70% discount to the prevailing market price? Next were two funds -- one controlled by Khan, another controlled by the family of Mahathir's long-time friend and mate Tunku Abdullah of Melewar Group. They too offered to buy the CLOB shares at a discount, albeit a smaller one. Next up: a proposal by UEM and Telekom Malaysia (the state-controlled listed dominant phone company) to buy CLOB shares at 25% discount for most shares. Investors responded by hammering Telekom stock despite its own improving fundamentals. The Malaysian government, which owns over 70% of Telekom, has been trying for months to sell 30% of its shares to Japanese phone giant NTT (it would use the proceeds to reduce the budget deficit and help the economy). NTT has apparently been telling the Malaysians they like Telekom but don't understand why a fixed line telecommunications company is interested in buying CLOB shares. Evidently Telecom started wondering too, and last week, it officially pulled out of the CLOB-share deal. That allowed UEM to launch yet another scheme to buy CLOB shares. The big question: Is this any different from the all those other deals? For one thing thing, the personalities haven't changed. UEM is controlled by Halim Saad who recently married Khan's niece in Singapore. So almost every CLOB deal has involved either Khan or Halim Saad.
But UEM officials say CLOB shareholders, instead of listening to analysts and investment bankers or reading commentaries in biased foreign media, should now take a serious look at the latest plan. On the face of it, the plan does look different. What UEM has done is to break up the CLOB shares, comprising of stocks in 146 companies, into four separate groups in order of stock quality. At the top tier, UEM will offer to buy shares at the prevailing market price. Second tier stocks will be purchased at a mere 10% discount. But third and fourth tier stocks will be purchased at 40% to 80% discount to the current market price. In reality while the proposal looks attractive for the handful of CLOB shareholders holding top-tier stocks, it undervalues the stocks most other CLOB shareholders own.
Analysts say even the holders of top-tier stocks are actually getting a bad deal. First, even though their stocks are repurchased at prevailing market prices, they will not be offered cash but shares of UEM. The problem is that UEM stock has actually been falling in recent months. Moreover, UEM is issuing more shares at a huge 30% premium to its current stock price to pay those CLOB holders. According to analysts, the flood of new UEM scrip will depress the UEM share price even more. One Kuala Lumpur analyst has worked out that if all CLOB shareholders agree to the proposal, fair value for UEM stock could go 20% below its current price of around Ringgit 6.50 a share.
So yes, I expect another resounding NO from CLOB shareholders to the latest proposal. But I don't expect the CLOB issue to fade from the headlines. I am told that Malaysian authorities have been sounding out their Singapore counterparts on other proposals. One of them is to let the Singapore Government Investment Corporation, or GIC, in on the next CLOB share-purchase scheme. This will dispel the notion that politically well-connected Malaysian firms are out to make a buck at the expense of middle class Singapore investors who had invested their nest eggs in Malaysia. But if GIC (along with its impeccable reputation) is to come in, it would demand minimum discounts and a fairer approach. Kuala Lumpur analysts say that even if GIC refuses to participate in a new scheme, there are several other proposals under consideration -- all with smaller discounts, all appealing and attractive. Singaporeans would like what they see, KL market watchers say.
Maybe they will; maybe they won't. Why not just hand the shares back to their rightful owners? Prime Minister Mahathir himself says Malaysia's foreign exchange reserves are now over US$32 billion. An additional $4.3 billion fleeing Malaysian shores would hardly make a dent. So why not let the market do all the talking and relegate the unfortunate episode to history? The removal of the CLOB overhang could actually spur the Kuala Lumpur bourse and bring back some of those foreign investors who have spent much of the past year sitting on the fence. In fact, that sounds like a win-win strategy for both Malaysia and CLOB shareholders.
International business, Singaporeans wait for a stock freeze in Malaysia to meltBy Wayne Arnold
July 9, 1999
Historic rivalries and a politically charged stalemate between this city's stock exchange and its counterpart in neighboring Malaysia are teaching investors here a new twist in the time-honored investment strategy of buy and hold.
Until Malaysia imposed capital controls last September, the Stock Exchange of Singapore handled a lively over-the-counter trade in Malaysian issues. Often, more Malaysian shares changed hands than Singaporean shares did.
But in September, Malaysia outlawed trade of its companies' shares off-shore as part of efforts to keep money inside the country. That left 172,000 investors in Singapore's so-called Central Limit Order Book, or Clob, as the market is known, caught with nearly $4 billion in shares they could not sell -- ''Clobbered'' as headline writers quickly punned.
Since then, the Kuala Lumpur Stock Exchange and the Stock Exchange of Singapore have clashed about how to return the shares to the Malaysian marketplace.
Newspapers here reported today that the Singapore exchange had sent a plan to the Kuala Lumpur exchange that proposes staggering the release of the shares in Kuala Lumpur to reduce chances of a shock wave of selling on Malaysia's newly buoyant market. Neither exchange would comment on the reports.
But such a plan is unlikely to solve the problem of the Clob shares, part of a larger dispute that has already touched air, water and railway links between the two nations, which were both created during the British Empire's breakup in the 1960's.
''Clob is a four-letter word,'' says Azman Mokhtar, head of Malaysian research at Salomon Smith Barney. ''Malaysian authorities hold the view that it was an illegal exchange.''
Complicating matters, Clob shares have in theory risen in value since being frozen. Malaysia's benchmark stock index has more than tripled since controls were imposed, and Malaysian authorities fear what might happen if so many investors suddenly had the chance to sell.
Malaysia has proposed that Singapore shareholders swap their Clob shares, which represent 104 Malaysian companies, for nonvoting shares in two Government-linked companies, Telekom Malaysia and United Engineers (Malaysia) Bhd. The shareholders object because it would require them to accept the equivalent of a 42 percent discount.
''It's unfair,'' said Chia Yeng Boo, a 52-year-old Singaporean who has owned his Malaysian shares longer than he can remember, but now considers them ''a total write-off.''
The Clob dispute is about people like Mr. Chia, small-time local investors who bought their first Malaysian shares a decade or more ago. But it also has implications for Malaysian efforts to woo back foreign investors unsettled by the Government's financial meddling.
''Everyone's watching what's going on here and how it's going to be resolved,'' said David Lum, who advises American clients as director of banking and strategy at Prudential-Bache Securities in Singapore.
Singapore and Malaysia struck out together from under British rule as the Federation of Malaysia, but differences between the Malay-led Government in Kuala Lumpur and Singapore's predominantly ethnic Chinese politicians led to a split in 1965. The two countries' stock exchanges did not split until 1973; even then, they kept listing each other's stocks.
In 1990, a more assertive Kuala Lumpur exchange ordered all Malaysian companies to shed their Singapore listings. The move was seen as potentially devastating to Singapore's financial industry: though Singapore was the dominant market, most of its stocks were Malaysian.
Singapore's exchange blunted the impact by setting up Clob, to let investors in Singapore trade foreign shares the way investors in New York can trade some foreign stocks as American depository receipts.
Malaysia never approved of Clob. ''We've objected since 1990,'' Mohamed Azam Ali, a Kuala Lumpur exchange spokesman, said.
Malaysia decided it could no longer tolerate Clob last year, when the Government imposed economic changes that banned outflows of its currency. That meant closing the back door Clob had provided. ''You can't have capital controls if you have this loophole,'' Mr. Azman said.
The move further strained relations between the two nations: bickering over a Malaysian railway immigration post in Singapore had already escalated into disputes about air and sea lanes. Last year, when Prime Minister Mahathir Mohamad of Malaysia visited Johor Bahru, a city across a causeway from Singapore, residents shouted ''cut! cut! cut!'' referring to the water Malaysia pipes to Singapore.
Most investors snubbed an offer in May to sell Clob stocks to a friend of Malaysia's finance minister at what the Singapore exchange called half the market value. Other plans to swap stock for shares in offshore trusts also seem to have fizzled.
Perhaps the only firm indication of what Malaysia will accept comes from Prime Minister Mahathir, who has accused Clob investors of contributing to the Malaysian market's fall last year. ''I don't think it is morally right,'' he was quoted as saying in May, ''for them to gain benefit from something they didn't help achieve.''
Singapore has a moral responsibility to CLOB investors: Malaysian politicianAgence France-Presse in Singapore
May 13, 1999.
A MALAYSIAN politician argued Thursday that Singapore's government had a moral responsibility toward investors in the city-state stuck with frozen Malaysian shares.
Singapore was forced to stop over-the-counter trading in the shares after eight years when Malaysia imposed capital controls in September, leaving in limbo tens of thousands of Singaporeans who still owned Malaysian shares.
Abdul Azim Mohd Zabidi, a member of the ruling UMNO party, argued the over-the-counter market called Central Limit Order Book International had been set up with the tacit approval of Singapore authorities.
"When Malaysia imposed selective capital controls on Sept 1, 1998 and announced other measures that made it impossible for CLOB to continue its operations, this would seem to be a case of market failure.
"Given Singapore authorities' pride in their efficiency, organisational skills and meticulous planning, it is difficult to believe the Singapore authorities made no plans nor did they allocate a budget for such contingencies," Abdul Azim was quoted as saying by the official Bernama news agency.
Abdul Azim also said the Malaysia had made known its displeasure regarding CLOB's existence, the Singapore authorities must have had a reasonable expectation that Kuala Lumpur would try to put an end to the market.
"It is therefore highly inappropriate for Singapore Deputy Prime Minister Lee Hsien Loong to try and disclaim moral responsibility for CLOB."
"Assuming all his arguments are valid -- that CLOB was an over-the-counter trading facility, that its shares were not listed on the Singapore stock exchange and the shares were not subject to Singapore's disclosure rules or corporate government standards -- the fact remains that Singapore was the mid-wife to CLOB's birth.
"The umblical cord may have been severed, but a mid-wife cannot deny her role in the delivery process," said Abdul Azim.
Some 100 Malaysian issues were traded under CLOB until September 15 last year, when trading ceased after Malaysia imposed the capital controls.
