KL must end S'pore frozen shares saga: Paper

KL must end S'pore frozen shares saga: Paper

SINGAPORE (Reuters): The fate of billions of ringgit worth of frozen Malaysian shares, formerly traded in Singapore on its CLOB exchange, should be settled soon for the sake of Malaysia's economy, the Straits Times said on Wednesday.

"For its own sake, Malaysia must stop the political game, the sooner the better for its economy," the newspaper said in a strongly-worded editorial.

The editorial said the CLOB issue had become "hostage to politics, and its resolution was dependent on wider political considerations, among them the looming general election in Malaysia."

It said Malaysian Deputy Prime Minister Abdullah Badawi's recent comment that Kuala Lumpur was not too concerned over the issue was an indication that "some quarters, evidently have not gotten over their pique with Singapore yet."

The trading of Malaysian shares on Singapore's over-the- counter market or CLOB (Central Limit Order Book) was halted last September when Malaysia announced its capital control measures and declared the trades illegal.

The fate of the shares of 172,000 investors, then worth some S$2.6 billion, was left hanging in the balance.

Singapore officials have said that Malaysia initially wanted to discuss CLOB as part of a bilateral package of issues -- including water supply and airspace -- to be resolved by the two countries, but later decided to remove it from the agenda.

The newspaper said international investors watching the CLOB saga unravel would draw lessons from the "frequency with which deals are reneged upon by Malaysians", referring to agreements signed by the Malaysia and Singapore stock exchanges over CLOB.

"Can a country that plays puck with small investors be a truly professional player in the international economic arena? It must be highly doubtful," the paper said.

It added that "cussedness on the part of Malaysians out to punish Singapore over the CLOB issue is misplaced, and ultimately self-defeating."

It said Malaysia could gain nothing from "flogging CLOB investors -- except, perhaps, transient gratification."

Two proposals have been tabled by parties in Malaysia to free the CLOB shares and a third is said to be in the offing.