S'pore, KL markets agree on CLOB shares

S'pore, KL markets agree on CLOB shares

SINGAPORE (AFP): Singapore and Kuala Lumpur's stock exchanges have unlocked an impasse over frozen Malaysian shares worth billions of dollars, exchange officials said.

In a joint statement late Friday, the Singapore Exchange and the Kuala Lumpur Stock Exchange said an agreement had been reached concerning shares of the Central Limit Order Book International (CLOB) held by Singaporeans.

The two exchanges "are pleased that they have been able to reach a comprehensive and amicable solution to the CLOB issue," they said.

The shares, worth an estimated 17 billion ringgit (US$4.86 billion), were frozen when Malaysia imposed capital curbs in September 1998 during the Asian financial crisis, banning trade of its listed shares outside the country.

The deadlock has been an irritant in often-testy relations between the neighbours.

Singapore had warned it had legal grounds to raise the issue with the World Trade Organization if no solution was found.

Two schemes were agreed upon Friday, the first being an amended proposal made by Malaysian firm Effective Capital Sdn. Bhd. for a staggered release of CLOB shares.

It calls for a three-month waiting period for the opening by Singapore shareholders of individual securities accounts with the Malaysian Central Depository, followed by the release of the shares over 13 months.

The statement said the deadline for shareholders to accept Effective Capital's offer was March 31.

Under the second scheme, the CLOB shares can only be traded 33 months after the March 31 deadline. They will be released on a staggered basis over a nine-month period.

The statement said the Singapore Exchange had recognized a proposal by Effective Capital to handle the transfer to the Kuala Lumpur stock exchange of the frozen shares "as part of a comprehensive and expeditious solution to the CLOB issue."

The Singapore shareholders would decide which of the two schemes to accept.

The bourses said the agreement met the Kuala Lumpur exchange's "duty to maintain an orderly and fair market for securities trading in Malaysia."

It also met the Singapore exchange's and investors' concerns that an alternative be provided in case some shareholders did not accept the Malaysian firm's offer.

The schemes are legally binding on all parties involved, the statement said.