Singapore considers WTO action over Clob

SINGAPORE says it has legal grounds to raise the issue of shares trapped in the city-state's over-the-counter market by Malaysian currency controls with the World Trade Organisation.

Deputy Prime Minister Lee Hsien Loong told parliament yesterday that the decision on whether to raise the matter with the trade body would depend on the outcome of talks between the two sides.

"Singapore has taken legal advice, and counsel said Singapore has valid grounds to seek WTO redress on the Clob issue," Mr Lee said, referring to the Central Limit Order Book (Clob) International shares.

Billions of dollars of Malaysian shares traded on the Clob market were frozen in September last year after Malaysia imposed capital controls.

However, Mr Lee said raising the issue with the WTO was "an issue to be considered carefully", and it would depend on the outcome of ongoing bilateral discussions with Malaysia.

Mr Lee said Singapore had been denied most favoured nation status by Malaysia by disallowing the Stock Exchange of Singapore to trade Malaysian Clob shares while recognising the trading of Malaysian shares on the stock exchanges of London and Copenhagen.

Malaysian authorities argue that releasing the shares on the Kuala Lumpur Stock Exchange could disrupt trading there.

Malaysian press reports have said the country aimed to resolve the Clob issue after next week's general elections.

"Singapore hopes that this will be the case, as it is in the interests of all parties to resolve the issue fairly and expeditiously," Lee said.