The Asian financial crisis started in 1997 and spread vastly over other sectors of the economy. The crisis started in Thailand with the collapse of its national currency the Thai Baht. The government was forced to cut its fixed exchange rate (PEG) to the US$. As the crisis spread, currencies slumped, stocks and other assets devaluated and private debt rose by a huge margin. Indonesia, South Korea and Thailand were the most affected by the crisis. Countries like China, Malaysia, Taiwan, Vietnam and Singapore were less affected.
The Association of Southeast Asian Nations(ASEAN) had a ratio of foreign debt-to-GDP of 100%, which rose during the crisis to a whopping 167% and to 180% at the worst of the crisis.
The Straits Times Index, Singapore’s index fell by 60% as the government did not intervene in the capital markets.
In late 1998 Singapore started a temporary recovery in wave (B), which lasted several years and its end coincided with the 2007 real estate crash in the US. That third leg down completed the running flat corrective pattern, that started in 1997. The bear market ended in early 2009, touching the multi-year trend channel from late 1998. This clearly marks the start of wave V of Super Cycle degree. Since 2009 there has been a brief move to the upside, which suggest, that wave 1 of wave V is forming and is setting the mood for a multi-year uptrend. Not only Singapore’s, but Asia’s stocks as a whole should be on every investor’s stock watch.
