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Financial markets rise in bug-free world

SINGAPORE: Asian financial markets opened seamlessly on Monday, the third virtually trouble-free day for the world's computers since the rollover into 2000, prompting some to wonder if the world had been conned into Y2K panic.

Communist-run Cuba even suggested the millennium bug was nothing more than a capitalist-hatched plot.

US futures dealers executed the first major market trades of 2000 on Sunday and the Chicago Mercantile Exchange reported a trouble-free start.

"Everything is running smoothly," said CME spokesman Bill Burks.

Joining the CME in leading the planet's top capital markets into their first fully fledged live test for Year 2000 glitches, the Chicago Board of Trade launched Treasury bond, grain and soybean dealing .

Tokyo and London markets will wait until Tuesday to open because of holidays. European bourses, central banks and regulators reported all systems were ready to go when trading resumes on Monday in most continental European countries.

ALL-TIME HIGHS: The first major stock, bond and foreign exchange trading of the millennium began in Singapore and Hong Kong where no Y2K problems were detected. Shares in both cities rose to all-time highs in early trade.

Asian currency markets were subdued with Tokyo and Sydney shut and players still cautious about computer upsets. China said there would be no problems when its markets open on Tuesday.

"The Singapore (stock) exchange had sent out an electronic message a minute before the market opened saying everything was (all right) and wishing all a happy new year," said a dealer.

The Singapore International Monetary Exchange reported no computer-related difficulties. "But it is still early in the day," an official said.

"The chaos that had been predicted was merely a scare," said a front-page editorial in Cuba's Juventud Rebelde (Rebel Youth) newspaper.

The billions of dollars spent fixing computers so that they accurately read the rollover from 1999 to 2000 "raised the suspicion that the immense investment in computers was due to an audacious market manoeuvre", it said.

Prof Anthony Finkelstein, head of software systems engineering at University College London, described the response to the Y2K bug as panic.

"There's an element of people being taken advantage of (but) I think that's not really the story," he told Australia's ABC Radio.

"The story is of a panic which scrambled out of the control of all the parties, even those that sought to make money from it. I believe greed was an element of it."

Minor millennium computer glitches cropped up in Japan's nuclear power plants, medical equipment in Scandinavia and data-processing systems in Israel, but were fixed quickly.

Britain said on Monday that the country was functioning smoothly but that it remained on the alert.

The government's Millennium Centre issued its statement 24 hours before Britons return to work on Tuesday after the long millennium weekend holiday.

Analysts are so confident the Y2K bug has been squelched for now that they predict a euphoric rally in global markets.

FLUSH WITH CASH: "We start a whole new year; people are flush with cash. That money is going to seek a home in the markets," said Peter Cardillo, director of research at Westfalia Investments in the United States.

The US central bank, the Federal Reserve, said its 24-hour command centre was keeping up the vigilance. But staff were relieved after no problems turned up processing checks and electronic payments with several hundred customers. The US Treasury even held a successful mock bond auction.

"Obviously we are confident, but there is still a question mark," said Doug Tillet, spokesman for the New York Fed.

Top Wall Street officials are optimistic.

"The evidence suggests there probably will be very little disruption," former US Treasury Secretary Robert Rubin, now chairman of Citigroup's executive committee, told CNN.

Bug-free trading proceeded in a handful of stock exchanges that were open over the weekend-Bangladesh, Oman, Kuwait, Egypt and Bahrain-with many reporting modest gains as Y2K jitters eased. Japan's financial watchdog, the Financial Supervisory Agency, reported minor glitches at one foreign bank and 15 domestic brokerages. But it said 14 of the 15 brokerages had already fixed the problems and predicted no major headaches.

Away from the technical headaches, a sense of millennium anticlimax could see some people sink into deep depression, a British charity said on Sunday.

The Samaritans, who provide confidential emotional support to people in crisis, expect their busiest ever weekend following the festivities, with thousands of calls from people for whom life remains miserably unchanged. -Reuters