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Thursday, September 18, 2003

Chinese firms line up for Singapore's IPO market

Reuters
Singapore, September 17

An increasing number of Chinese firms are sizing up Singapore's fast-growing
market for initial public offerings and are likely to list this year,
investment bankers said on Wednesday.

About S$1.2 billion ($685.3 million) has been raised by 22 companies that
have gone public in Singapore so far this year, excluding real estate
investment trusts.

About half of these companies either have manufacturing facilities in China
or customers mostly in China.

Singapore was the fastest-growing IPO market in the world in the first half,
with issues growing more than 18-fold to $566.40 million, Thomson Financial
data shows. It ranked eighth in the world by value but was the fourth
biggest by number of issues.

Part of that expansion is due to emerging businesses in China, where the
economy is expected to grow by eight percent this year.

"The IPO market will remain buoyant for the remainder of the year and many
months to come," said investment banking head at HL Bank, Khong Choun Mun.

The bank has underwritten eight IPOs this year in the city-state, with most
of the companies having operations in China. He is looking to bring two more
China-related companies to the market.

One possible drawback could come from the deadly SARS virus. Singapore
suffered a SARS scare last week when a laboratory worker tested positive for
the virus, raising fears of a resurgence of the disease which killed more
than 800 people worldwide earlier this year, including 33 in Singapore.

But the man is believed to have caught Severe Acute Respiratory Syndrome at
the laboratory where he worked, and the case is widely seen as isolated.

"Once people are aware of SARS, I don't think they will be so much alarmed.
A lot of countries have contingency plans," Khong said.

SINGAPORE MARKET REPUTATION

"Singapore has a reputation for transparency. The quality of stocks seeking
listing are closely monitored and approved," Lim Seck Yeow, the 64-year-old
director of China Food Industries Limited, told Reuters.

Frozen food supplier and pig farm operator China Food Industries, launched
on Wednesday a 27-million-share IPO to raise about S$4.3 million partly for
a new feed factory and to upgrade its pork production facilities in China.

"It's not easy to get qualified by the MAS (Monetary Authority of
Singapore). You can understand one of the gambling companies, they did not
(get approval)," Lim said.

The MAS, which regulates the Singapore Exchange, last week blocked the
initial public offering of Cambodian casino operator NagaCorp Ltd, as it has
reservations over the firm's ability to avoid money laundering.

NagaCorp has until September 29 to decide whether to file an appeal with the
MAS.

Meanwhile, boutique investment bank SBI E2-Capital Pte Ltd, a unit of
Japan's Softbank Investment Corp which has managed 13 IPOs in Singapore this
year, said it is set to launch the IPOs of three China-linked companies and
one Malaysian firm.

SBI E2-Capital chief executive Choo Chee Kong said one of these firms is KXD
Digital Entertainment Limited, a designer and supplier of DVD players and
digital home theatre systems, which has manufacturing operations in China.

Choo said the company seeks to raise at least S$30 million from the share
offer.

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