KL blames Singapore for market rumors

KL blames Singapore for market rumors

KUALA LUMPUR (Reuters): Prime Minister Mahathir Mohamad said many of the rumors swirling around Malaysia's financial markets originated in Singapore.

"From Singapore you get at least three rumors in a day and Malaysians react completely (to them)," he told a news conference on Thursday night after chairing a special meeting of his political party to discuss ways to bolster the country's weak currency.

"You would rather believe in Singapore rumors than in what I say," he said in response to a question on market speculation that the government would suspend trading on the Kuala Lumpur Stock Exchange.

He added: "Malaysians are very good. They never start any rumors. But Singapore, they only start rumors about Malaysia. We are famous for shooting ourselves in the foot."

Asked why he thought the market rumors originated in Singapore, Mahathir said: "I don't know but I think it's natural. I suppose we are competing economies, so the rumors come."

The Malaysian stock market lost some 20 percent of its value this week amid a spate of negative rumors which some dealers and analysts said emanated from Singapore.

They included speculation about Mahathir's health and allegations of a run on deposits at several Malaysian banks.

Mahathir described talk that he had fainted in a recent cabinet meeting as a "deliberate lie," while the central bank said on Thursday that rumors of a run on banks were "baseless."

Deputy Prime Minister Anwar Ibrahim, who was also at the news conference, said the government had no plans to suspend trading on the stock exchange.

Malaysia aspires to be a financial center for Southeast Asia to rival Singapore and relations between the two countries have not always been smooth.