The multi-coloured glow appeared in the sky on Monday in the late afternoon, lasting for about 15 minutes, and was seen across the island.
Media reports said it was likely a fire rainbow, which occurs when sunlight refracts through ice-crystal clouds.
Others have also said it could have been cloud iridescence, which happens when water droplets or crystals scatter light.
Fazidah Mokhtar, who works in a childcare centre, told the BBC that she spotted it around 17:10 on Monday (09:10 GMT).
