They say the rat's gregarious nature and penchant for networking should spark off a fresh wave of mergers and acquisitions (M&A) among listed firms in Singapore as they globalise their operations.

But sour investors observe that at this point in time, even before the new Lunar Year arrives, the rat has already gnawed a big hole in their stock portfolios.

Billions were lost last week, as global stock markets were sent reeling on Monday and Tuesday by widespread panic selling.

Societe Generale lost a staggering 4.9 billion euros (S$10.2 billion) as it struggled to unravel the dealings of a rogue trader. Investors could only watch helplessly while banks were forced to sell the shares they had pledged as loan collateral, as prices plunged.

For many traders, it marks the start of 'annus horribilis', to borrow a phrase made famous by Britain's Queen Elizabeth II in 1992 while marking the 40th anniversary of her Accession.

But others believe many investors have been so traumatised by their recent losses that they might be missing the big picture.

Yummy morsels for eager rodents

LOCAL share prices have fallen so much that many listed firms in Singapore make attractive takeover targets, given their valuable business franchises and strong cash flows.

Just this month alone, even as share prices tumbled, takeover offers were made for three firms: The Ascott, by its controlling shareholder, CapitaLand; Robinson & Company, by a Middle Eastern group; and The Straits Trading Company, which has attracted competing bids from the Lee Rubber family and Tecity.

In each case, investors were offered hefty premiums to induce them to part with their shares.

And there is every likelihood that investors in other well-run Singapore firms will find themselves courted in a similar fashion by their own major shareholders and cash-rich investors, as the Earth Rat scampers across the market.

Take property developers, for example.

According to Shareinvestor.com, the stocks of property giants such as City Developments and CapitaLand are trading 25 per cent off their peaks.

But those of smaller developers such as Wheelock Properties, SC Global Developments and Wing Tai Holdings have plunged by more than 40 per cent from their 12-month highs.

So it won't be surprising if there is a wave of consolidation among the smaller property firms, given the sharper fall in their share prices, as the fever cools down in the residential property market and the turmoil in the stock market takes its toll.

And the merger frenzy might not be confined to a single sector alone.

Some have noted that during the recent selldown, Pacific Century Regional Developments fell below 30.5 cents a share - the price at which Hong Kong tycoon Richard Li had offered to take the rest of the firm private two years ago.

Observers also recall that previous financial crises were characterised by a wave of bank mergers in Singapore.

At the height of the Asian financial crisis, in late 1998, DBS Group Holdings completed its purchase of POSB, paving the way for it to become a regional banking giant.

And in 2001, a year after the collapse of the dot.com bubble triggered deflationary fears across the globe, there was a further wave of banking consolidation in Singapore.

United Overseas Bank (UOB) merged with Overseas Union Bank, while OCBC Bank bagged Keppel Capital, whose crown jewel was Keppel TatLee Bank.

King Rats get the choicest pickings

SOME now argue that with the current global banking crisis, the time has come for Singapore to try to create its own global banking giant to anchor its financial centre.

After all, London and New York are headquarters to some of the world's largest banks, while Hong Kong is home to HSBC Holdings and acts as the gateway for Chinese banking giants such as Bank of China.

They also note that even though local banks are well-run, well-capitalised and hardly touched by the sub-prime losses in the United States, their stocks have been subjected to the same humiliating selldown as those of Western financial institutions currently reeling from massive write-downs.

Indeed, local banks such as DBS and UOB are now priced at only 1.5 times price-to-book value, following the upheaval that started in August.

In contrast, Standard Chartered Bank (Stanchart), which is 18 per cent owned by Temasek Holdings, is still being valued at 2.5 times price-to-book value - testimony to the fact that big is beautiful in the world of global finance.

Analysts have long argued that because of this wide difference in valuations, Stanchart can acquire DBS at a hefty premium over its market price simply by issuing new shares.

And because of the way in which investors value global financial institutions, the merged bank could enjoy a higher valuation than either bank currently.

So while the outgoing Year of the Golden Pig was marked by unfettered greed, which drove share prices to outlandish valuations, the Year of the Earth Rat might be remembered for restoring the balance - a necessary evil before fresh accomplishments can be chalked up.

And for those licking the wounds they suffered recently on the stock market, take heart.

The year could yet produce plenty of positive surprises. Gong xi fa cai.

engyeow@sph.com.sg