A long time ago, in the annals of Malayan history, when Singapore was merely a little sleepy fishing village, there was a bloody event that stained the soil of the (present day) Red Hill red with blood. In these early years, fish that had sharp, sword like mouths used to swim up to the shore and attack fishermen, making it unable for them to venture out and fish. Nobody had any idea what to do, the Sultan tried ordering soldiers to attack, but these attempts only made attacks more frequent and causing the soldiers themselves more harm than the fish.
Then one day, a young boy, who lived on the hill came up with a solution. He advised the Sultan to use banana tree trunks as a wall to ward off the attacks, as the fishes mouth would get stuck in the tree and they can kill the fish more easily. This plan worked very well, and the fish eventually stopped attacking.
However, the boy became a hero in the eyes of the villages and the Sultan became threatened by him, growing paranoid that the villagers might want this young boy to become the next ruler and overthrow him. His paranoia increased day by day, until one day, he ordered a small squad of his elite guards to assassinate the boy in his sleep. That night, the head of the this team took out his kris (wavy blade dagger) and stabbed the boy in the heart. Killing him instantly.
The blood that flowed out would not stop gushing out of the wound, this scared the soldiers and they ran away as fast as possible. This young boy’s blood coated the hill that he lived. None of the villagers knew who ordered the boy kill, but that it was a tragic event, and to commemorate this event, they called the hill Bukit Merah (Red Hill) to remember this boy by.
My informant was informed of this legend when he was a boy in Singapore during the 1990s. This was told to him by one of his older cousins at a family reunion, when they were watching a TV special on the origin of place names in Singapore. He suspected it was partially to scare the living daylights out of him, but nevertheless, it stuck. Because of the story though, he went to look up the actual reason what made the soil on that hill red, and it was because of the soil type on that hill tended to have a reddish hue to it.
Fishermen in rural villages are not the most rational or scientific of people, and the most likely reason for the name would be that as the soil, without any plants or crops growing on it would look like blood soaked soil to these uneducated villagers in the early part of the last millennium. Therefore naming the place, Red Hill or Bukit Merah.
There are many versions of this story. In some versions, like this one, the species of fish attacking the village is unknown, others name it as swordfish and some call it Gar fish. In another version of this story, the boy does not die and it the blood coming out was the blood of the earth from a homunculus which, a witch created to throw off the guards from actually killing the boy.