Japan was then suffering its own hangover: the Nikkei which peaked at 38,915.87 points in 1987 had collapsed by two-thirds to around 14,000 points. Yet, the Japan I recall from that 1997 trip carried vestiges of merry times all around. With the yen 50% stronger than the Singdollar then, my trip to Akihabara was confined to window shopping. An amazing robatayaki (barbecue) dinner for conference speakers at Roppongi cost a princely US$500 a head. The total tab for the evening busted expense accounts, compelling co-organisers Goldman Sachs and Daiwa to split the bill.
I made my first trip to Japan in 1997. I was just two years into the industry, setting up the first stock-lending programme in Asean for DBS. Yet, I was invited to speak at a securities-lending conference in Tokyo to espouse the wonders of what these financial instruments offer — only to hear Dr Mahathir refer to them as tools wielded by the likes of George Soros during the Asian Financial Crisis to create havoc in the very same markets I was promoting.
Up till today, I stand by my belief that instruments like derivatives, options and convertible bond arbitrage make markets more efficient and enable additional liquidity by facilitating individual stocks and index-basket hedging. For investors who are sceptical about the stratospheric valuations of small-cap cornered stocks — including many Bursa-listed ones — these are perfect shorting instruments.
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