Internet share rush worries Singapore PM

SINGAPORE, JANUARY 10: Heavy buying of Internet-related stocks is a cause for concern, Singapore Prime Minister Goh Chok Tong said on Mond...

SINGAPORE, JANUARY 10: Heavy buying of Internet-related stocks is a cause for concern, Singapore Prime Minister Goh Chok Tong said on Monday. In an interview with Reuters Television, Goh said the focus on Internet stocks and the investor rush to initial public offerings of such shares was a euphoria that could have side effects.

The Prime Minister did not specify any particular firms as a source of his concern, but Goh said the rush to initial public offerings of such companies in Singapore was also a source of concern. Deputy Prime Minister Lee Hsien Loong warned in August about the excesses of the IPO market, particularly the inherit risks of share ownership.

Goh had said in his new year8217;s address that the quot;one dark cloud on the horizonquot; was the lingering risk of a sharp fall in US stock prices. The Prime Minister also said that Singapore8217;s economy grew 5.6 per cent year-on-year in 1999 helped by an unexpectedly strong fourth quarter, which saw preliminary growth of 8.2 per cent on year.

Goh said on Monday robust growth in the electronics sector as well as an improving regional picture were key to fourth quarter gains. quot;The industry is doing very well8230; the cycle is on the upswing and that pulled our industry in Singapore up by several points.

quot;Confidence is returning to the region. Our neighbours are doing well and given the stable situation in the region, we see growth coming from trade and from general interest, in the stock market for example.quot;

Singapore8217;s current forecast for growth in 2000 is a range of 4.5 to 6.5 per cent. Goh said firm growth would continue from 1999, but the government was not ready to change its range prediction.

quot;I would expect firm growth for this year,quot; Goh said. quot;We have a reputation for being conservative in our forecast and I think it is the right approach.quot; quot;If our reputation remains true, than growth will be higherthan our forecast8230; but at this stage, I would not want to tinker with it.quot;