About 800,000 people have cashed in part of their allotment of state-issued shares, up from 6.6 percent on the eve of the November 3 election, the Straits Times reported Monday (Nov 12).

"It has really gone up quite significantly," Lee said.

The shares were part of an economic stimulus package announced just before the election. The government called it a wealth redistribution scheme. The opposition said it was vote buying.

Throughout the election campaign, the ruling People's Action Party warned Singapore faced a prolonged downturn with wage cuts and reduced income.

"The next two years will be very tough years," Prime Minister Goh Chok Tong said in a frank election victory speech.

Many people off-loading their shares said they were desperate for cash as the Singapore faced its worst economic downturn in 37 years of independence.

But Lee said the number of people cashing in early was not cause for concern.

"It is not a bad outcome because half of it is kept. You are not taking everything out straight away, and more than half of those who received the shares have kept them," Lee said.

"My advice is if you don't need the money, keep the shares because the interest is good."

Under the novel scheme Singaporeans received cash-convertible shares worth between S$200 and S$1700 dollars with the lower the income the bigger the share.

Up to half the shares can be sold in the first year and then all restrictions are lifted.

The shares are insulated from market fluctuations and their dividends exempt from tax.

They will earn a guaranteed minimum rate of three percent a year on top of bonus dividends depending on gross domestic product growth, and when they mature in 2007, the government will redeem all outstanding shares at one dollar each.

The Singapore economy is forecast to shrink 3.0 percent this year compared with growth of nearly 10 percent last year due to the global economic slowdown, especially in the United Statees which is the island's key export market.

Job losses because of the slump are expected to total 40,000 by the end of next year, many of them middle-level managerial workers from the hard-hit electronics sector. Many companies have already slashed or scrapped bonuses, cut salaries, and imposed a freeze on hiring.

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