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GREED IS GOOD! : Foreign Stock Markets

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  • Iworld Networking gets $15 million investment

    Korean ASP, Iworld Networking, in operation for four months, attracted a $15 million investment from a number of venture capital firms in its first round of funding. The ASP manages networks and servers, and provides integrated messaging services.

    The investment breakdown is as follows: $6 million from Worldview Technology Partners, a venture capital firm based in Palo Alto; $5.45 million from Softbank Ventures Korea; $1.55 million from Newton Technology Partners; $1 million from Seoul Securities, and $1 million personal investment by William Schrader, chairman of PSINet, a provider of IP-based communications services for businesses.

    Analysts say the company is an attractive investment vehicle given the burgeoning internet market in Korea which is expected to grow substantially over the coming months.
  • chinadotcom announces ASP venture

    chinadotcom has announced a 50/50 joint venture with CCIDNet.com to create a business-to-business (B2B) ASP marketplace. chinadotcom has an investment in CCIDNet.com.

    CCIDNet.com, a China-based IT product and services internet company, is a subsidiary of the Center of Computer & Microelectronics Industry Development (CCID), which formulates and develops China’s IT and internet-related plans, policies and regulations.

    Under the agreement, CCIDNet.com will help obtain the necessary permits and licences for the B2B transaction platform while chinadotcom will provide technological expertise and capital.
  • Asia2B.com site launched

    The B2B site Asia2B.com conducted its soft launch on July 27 in Hong Kong. The site’s consortium of investors includes SUNeVision, Jardine Matheson Group, i-Cable, New World China Enterprises, Swire Group, WI Harper Group, Beijing Enterprises Holdings, and Commerce One.

    Officials says the site aims to be the “WTO of e-commerce”. The backbone of the system is US-based Commerce One’s e-commerce platform and is connected to that company’s Global Trading Web.

    The new dot-com also announced its first six partnerships at the press conference, three of which are with shareholders or their related companies: 1stop-toys.com, i-Cable Communications, Jardine OneSolution, M2B e-Commerce, New T&T, and New World BioSciences.
  • Singapore MRT’s (SMRT) S$300 million ($176 million) debut

    SMRT’s IPO was successfully executed on July 26 as investors bought 32 percent of the company’s shares, priced at the high end of the indicative level. UBS Warburg managed the sale. Initially priced between S$0.54 and S$0.62, the deal was finally set at S$0.61 and, according to a source close to the company, international and retail investors snapped up the issue.

    “In the end the sale was 6.7 times oversubscribed by the institutions and 5.24 times by retail investors,” he says. “The allocation of shares was 55 percent to institutions and 45 percent to local investors.” The greenshoe of 15 percent has yet to be exercised.

    According to the source, demand was strong from institutions in Europe, Asia and, surprisingly, the US. “Not many investors in the US buy small cap issues in the region,” says the source.

    One investor said he likes SMRT for its “strong and solid recurrent income”. An analyst at a European investment bank also comments that the future for the company is bright. “It will enjoy good growth in operational cash flow and this will yield attractive dividends for investors,” she says.

    SMRT operates Singapore’s principal rail routes and looks likely to retain its monopoly until at least 2002 when its first competitor commences operations of a planned extension of the system. Most analysts expect SMRT to increase revenue by six to eight percent over the next three years. An added bonus for investors is the 50 percent dividend payout policy that starts this year. This effectively pays 4.5 percent while the average listed Singaporean stock yields less than two percent.

    “Investors like this type of old economy play,” says one investment banker. “You see solid cash in your back pocket, not the promise of exponential returns and no delivery.”
  • Japan, Korean Computer Stocks Fall, Sony, Samsung Lead Declines

    Tokyo, July 31 (Bloomberg) -- Japanese and Korean computer- related stocks fell, led by Sony Corp. and Samsung Electronics Co., tracking delinces in the U.S. on concern earnings growth in the global semiconductor industry has peaked.

    The Nikkei 225 stock average plunged 293.06, or 1.6 percent, to 15,545.51. The broad Topix index dropped 1.9 percent to 1,424.94. The Kospi index fell 0.6 percent to its lowest level in two months. The computer-laden Nasdaq index on Friday lost 4.7 percent, its largest daily decline in two months.

    ``Investors are still somewhat shocked about the tumble in technology-related shares in the U.S.,'' said Yun Sung Il, who overseas 6 trillion won ($5.4 billion) at Korea Investment Trust Co.

    In other markets, Australia's ASX200 index fell 0.9 percent, led by News Corp. on concern profit growth will slow. New Zealand's Top 40 index fell 0.6 percent, as Telecom Corp. extended declines on expectations the company will cut its dividends.

    In Japan, investors paid little attention to optimistic figures pointing to a recovery in the world's second largest economy. The government on Friday said industrial output rose for a fourth quarter, by 1.6 percent, while the jobs-to-applicant ratio rose 59 jobs to 100 jobseekers.

    ``The Nasdaq's slump pulls down sentiment here -- and we expect more selling from foreigners and domestic institutions,'' said Koji Tada, a manager at Tsubasa Securities Co.'s equity department. ``Our indexes seem to be falling regardless of the strength in economic fundamentals.''

    Sony, the world's No. 2 maker of electronic appliances, slid 260 yen to 9,920. Kyocera Corp., the world's largest maker of ceramic packaging used to protect finished microchips, fell 490 yen to 14,930. Advantest Corp., the world's biggest maker of equipment used to test computer memory chips, fell 600 yen to 18,580.

    Lenders such as Bank of Tokyo-Mitsubishi Ltd. also fell as companies sell off long-held equity stakes of other companies in their industrial groups, and which were purchased to seal business ties.

    Korea

    Korea's benchmark Kospi index shed 4.18 to 688.47. Samsung Electronics, the world's fourth-largest semiconductor maker, fell 0.4 percent to 287,500 won. Hyundai Electronics Industries Co., the second-largest computer memory chipmaker after Samsung Electronics, fell 2.1 percent to 16,100.

    Korea Investment Trust's Yun said the Kospi may fall to as low as 670 points at the beginning of the week, largely on declines by Samsung Electronics and other technology-related shares. He said he may add to his Samsung Electronics' holding if prices fall further.

    ``This could be a good time to buy Samsung Electronics'' because it is cheap compared with their fundamental value, Yun said.

    The spot price for the industry-standard 64 Megabit dynamic random access memory chip fell 5 percent in 11 days to $8.50 on Friday, the first such fall in four months.

    New Zealand, Australia

    Australia's ASX200 index fell 27.7 to 3227.30. News Corp. declined 1.4 percent to A$20.60. Its preferred share fell 1.7 percent to A$17.70.

    ``You would expect to see News Corp. struggle, given that it has the biggest exposure to the tech sector,'' said Jim Christensen, who helps manage A$22 billion ($13 billion) in investments at Queensland Investment Corp.

    The Nasdaq's decline bolstered similar concern for Australian companies, especially for ones such as News Corp. for which U.S. sales account for three-quarters of total sales.

    Broken Hill Proprietary Co. fell 0.7 percent to A$18.17 after the country's largest resources company said it has enough cash for a multi billion dollar acquisition and may use its stock to fund a larger purchase, as it seeks to become one of the top three resource companies for global fund managers.

    New Zealand's Top 40 Index fell 12.51 to 2100.72. Telecom, the nation's dominant phone company, fell 1.7 percent to NZ$7.03, declining for the seventh day in nine.

    ``People want to know what their strategy is for Australia and how much they will cut dividends and there just hasn't been any answers from the company yet,'' said Duncan Rutherford, a broker at ABN Amro.

    Telecom has declined 22 percent so far this year, after the company indicated it will cut its dividend payout and spend more investing to expand its businesses. The company owns 81 percent of Australia's AAPT Ltd., Australia's fourth-ranked telecom company.

    Taiwan, Hong Kong

    Taiwan stocks may fall, led by Taiwan Semiconductor Manufacturing Co. amid concerns that falling demand and prices for computer chips may mean lower profits for chipmakers. The key TWSE Index has fallen 0.3 percent last week.

    Chipmakers may fall because they face ``slowing demand and slower economic growth,'' said Minlan Tan, strategist for Asia, excluding Japan, at Merrill Lynch (Singapore) Pte. Tan has recommended clients cut their exposure to Taiwan equities.

    In Hong Kong, the focus will be on HSBC Holdings Plc and Hang Seng Bank Ltd., Hong Kong's two largest banks, which will report their earnings for the first half of the year today.

    ``If the banks' earnings are better than expected, it will give a boost for the market,'' said Tammy Fung, a fund manager at Darier Hentsch Asia Ltd., which invests $200 million in Asia excluding Japan.

    HSBC, Europe's most valuable bank, is expected to report profit fell 3.8 percent as it incurred charges for its acquisition last year of Republic New York Corp. and its European affiliates, and as it faced rising competition for customers both in the U.K. and Hong Kong, two of its biggest markets.

    Hang Seng Bank, 62 percent owned by HSBC Holdings Plc's Hongkong and Shanghai Banking Corp., is expected to report a 12 percent rise to HK$4.77 billion ($612 million) in first-half net income, with lower bad loan provisions masking stagnant earnings from lending, according to a Bloomberg survey of five analysts.

    Around Asia

    Singapore stocks may fall or an eighth day, led by electronics and technology stocks such s Venture Manufacturing Ltd. on concern the earnings of those ompanies may fall short of expectations.

    Malaysian stocks may also fall, extending its decline for the eighth day, led by technology-related companies such as Malaysian Pacific Industries Bhd. on concern slower earnings of U.S. companies may hurt demand for Asian-made goods.

    Philippine stocks may decline, led by Bank of the Philippine Islands and Metropolitan Bank & Trust Co., the nation's two largest banks by market value, after separately reporting on Friday that their profit fell by as much as 46 percent in the second quarter because of costs from recent mergers and weakness in demand for loans.

    Thai stocks may fall, led by lenders amid concern their restructured loans will turn bad again after banks reported declines in net interest income in the second quarter.

    Thailand's SET index fell 5 percent last week and is down 40 percent in the year to date.

    Indonesian stocks will be largely influenced by continuing concerns about the ability of President Abdurrahman Wahid to reconcile disagreements between his administration, parliament and the People's Consultative Assembly which will meet next month.

    Indian stocks may fall, led by Infosys Technologies Ltd. and other software stocks, on concern the fall in U.S. computer- related stocks may prompt investors to sell Indian software shares.

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  • Asian Stocks: Japan's Fujitsu Leads Fall; Korea Chipmakers Down

    Tokyo, Aug. 3 (Bloomberg) -- Japanese stocks fell, paced by Fujitsu Ltd., as an analyst's warning that Dell Computer Corp. may miss sales growth forecasts raised concern revenue of computer- related companies here may also lag expectations.

    The Nikkei 225 stock average fell 368.55, or 2.3 percent, to 15,837.64. The broad Topix index declined 1.3 percent to 1464.09. Yamanouchi Pharmaceutical Co. extended its slide after Japan's third-biggest drugmaker said it's recalling all liquid Maalox products sold domestically because it found an unlisted ingredient in the antacid medicine.

    ``Investors took their cue from U.S. computer stocks to sell Japanese counterparts,'' said Tatsuo Inoue, a general manager at Daiwa Securities SB Capital Markets Co.'s equity department.

    In other markets, Taiwan's TWSE Index fell 1.9 percent to the lowest level this year, led by the island's biggest electronics companies such as Asustek Computer Inc., on concerns that a slowing U.S. economy will slow demand for Taiwanese goods. Korea's Kospi index shed 1.1 percent, led by Samsung Electronics Co. and other semiconductor-related stocks as some investors are skeptical about future growth in the industry.

    Fujitsu, Japan's largest computer maker and support service provider, fell 3 percent to 2,900 yen. Softbank Corp., one of the world's largest backers of Internet businesses, declined 3.7 percent to 8,500 yen. Sony Corp., the maker of the PlayStation 2 video game console, slumped 4 percent to 9,980 yen, the lowest level in a month.

    In New York, the Nasdaq fell 2 percent, led by Dell Computer after U.S. Bancorp Piper Jaffray Co. analyst Ashok Kumar downgraded the No. 1 direct seller of personal computers to ``buy'' from ``strong buy.'' Kumar said the company's forecast of 30 percent revenue growth in coming quarters isn't achievable because sales of desktop personal computers are slowing.

    Yamanouchi fell 2 percent to 5,000 yen. The company said Tuesday it's recalling about 750,000 bottles of Maalox sold with and without prescription, which are made by Aventis SA.

    Taiwan

    Taiwan's TWSE Index fell a fourth day, down 105.80 to 7811.05. Asustek Computer, which makes computer motherboards, the main circuit board for a computer, fell 0.8 percent to NT$236.00. Acer Inc., the biggest maker of personal computers in Taiwan, fell 0.8 percent to NT$39.90. Hon Hai Precision Industry Ltd., which makes electronic connectors and cable assemblers, dropped NT$2.00, or 0.8 percent, to NT$237.00. Quanta Computer Inc., a computer notebook maker, fell 2.7 percent to NT$146.00.

    Dataquest Inc. said second-quarter global PC shipments rose 18 percent, less than its forecast of 18.5 percent growth.

    Taiwan's personal computer and notebook makers face ``higher component prices'' while finding it difficult to boost their ``global market share,'' said Andrew Lu, an analyst at Salomon Smith Barney Securities Taiwan Ltd.

    Korea

    Korea's Kospi fell 7.74 to 720.59. Samsung Electronics Co., the world's fourth-largest semiconductor maker, fell 0.3 percent to 302,500 won. Hyundai Electronics Industries Co., the second largest memory chipmaker after Samsung Electronics, rose 1.3 percent to 19,800 won.

    ``Some investors are still unclear over the growth potentials in the semiconductor industry,'' said Chung Doo Sun, who manages 300 billion won ($270 million) at CJ Investment Trust Co. in Seoul. ``Everyone is hesitant about buying Samsung Electronics shares.''

    The Philadelphia Stock Exchange Semiconductor Index, which international investors track to benchmark the industry's performance, fell for a second day, shedding 0.2 percent.

    Korea Exchange Bank and other commercial lenders, rose on optimism the banking industry's reorganization will proceed on schedule. Korea Exchange Bank, the main creditor of debt-laden Hyundai Engineering & Construction Co., rose 5.1 percent to 2,765 won. Cho Hung Bank gained 2.7 percent to 3,575 won and Hanvit Bank rose 3.6 percent to 2,480 won.

    ``The government's latest plan indicates that it is still on track to reorganize the banking industry,'' said Park Joon Beom, a market strategist at LG Investment & Securities Co.

    The Financial Supervisory Commission is evaluating commercial lenders including Hanvit Bank and Korea Exchange Bank, six regional banks and five specialist lenders. Banks which do not meet the statutory minimum of holding an 8 percent capital adequacy ratio will be classified as ``weak'' and may be forcibly merged under financial holding companies.

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    Australia's ASX200 Index rose 0.1 percent to 3275.00. WMC Ltd. led gains, adding 2.7 percent to A$7.74 as the world's fourth- largest miner is expected to post its first-half profit due next week to rise more than 18 times to about A$381 million from a year earlier. The improved earnings also make WMC ripe for a takeover by either Broken Hill Proprietary Co. or South Africa's Anglo American Corp., the Age newspaper reported. Cable & Wireless Optus Ltd. fell 1.2 percent to A$5.03 after D&D Tolhurst analyst Bill Bannister downgraded the nation's second-largest phone company to a ``buy'' from ``strong buy.''

    Malaysia's 100-stock Kuala Lumpur Composite Index rose 0.3 percent to 805.10, led by Public Bank Bhd., the country's fourth- largest bank, after its earnings in the first half ended June 30 rose by two-thirds from a year ago. It rose 0.7 percent 3.02 ringgit. Leaving the market mixed, Telekom Malaysia Bhd., fell on concern profit warnings by U.S. companies may lead to weakened demand for Malaysian-made goods and hurt corporate earnings. Telekom Malaysia, the country's biggest phone company, fell 0.8 percent to 12.00 ringgit.

    New Zealand's Top 40 index gained 0.3 percent to 2132.07. Fletcher Challenge energy, the nation's largest oil and gas producer, rose 4.3 percent to NZ$7.46 as investors bet the stock is poised to rise as the company will soon decide the sale or restructuring of its remaining three divisions. The New Zealand Herald newspaper yesterday reported the company may decide the fate of its remaining three divisions by the end of the month. TransAlta New Zealand Ltd., the nation's largest electricity retailer, rose 5.9 percent to NZ$2.70, after Natural Gas Corp., the nation's largest gas distributor, said it will pay up to NZ$2.79 a share to buy the 24 percent of the business it doesn't already own.

    The Philippine Stock Market composite index rose 1.4 percent to 1431.79, as analysts said the 4.4 percent drop in the previous five days was overdone. Philippine Long Distance telephone Co. rose 2.2 percent to 695. Ayala Land Inc. rose 4 percent to 5.20. SM Prime Holdings Inc. rose 3.1 percent to 5.

    Singapore's Straits Times Index fell 0.6 percent to 2053.99, led by banking stocks as their results, due tomorrow, may be less than anticipated, analysts said. Oversea-Chinese Banking Corp., Singapore's third-largest bank by assets, fell 1.6 percent to S$12.60. United Overseas Bank Ltd., Singapore's No. 2 bank by assets, dropped 1.6 percent to S$12.40. Creative Technology, the world's biggest maker of computer sound cards, rose 1 percent to S$39.20 after it said fiscal fourth-quarter profit more than doubled, boosting earnings for the year to a record on investment gains and higher sales of audio products.

  • CKI, HKE Buy Powercor From ScottishPower for A$2.3 Billion

    Hong Kong, Aug. 3 (Bloomberg) -- Cheung Kong Infrastructure Holdings Ltd. and Hong Kong Electric Holdings Ltd., controlled by billionaire Li Ka-shing, said they bought Powercor Australia from ScottishPower Plc. for A$2.3 billion ($1.3 billion).

    Li's companies agreed to buy Powercor, Victoria state's largest power distributor, and may also buy a 19.9 percent interest in its Hazlewood power plant in Victoria.

    ``Funding for the acquisition will be initially provided by a combination of bank facilities to be guaranteed by CKI and HEH,'' the companies said in a statement.

    Powercor, which sells electricity to more than 575,000 customers, will add to Li's power cable and gas pipeline assets in Australia, home to 19 million people. ScottishPower acquired Powercor as part of last year's purchase of PacifiCorp of the U.S. and said it would sell it to focus on the U.K. and U.S.

    Li's companies will pay A$1.2 billion in cash, assume A$632 million of Powercor's debt and repay A$595 million to bondholders, people familiar with the transaction said. That includes A$90 million for the 19.9 percent stake in Hazlewood.

  • Asian Stocks: Japan Falls, Led by Sony, Retailers; Korea Down

    Tokyo, Aug. 4 (Bloomberg) -- Japanese stocks fell, led by Sony Corp., Toyota Motor Corp. and other companies targetted by fund managers on concern investors are selling stakes in large mutual funds that underperformed key stock indexes.

    The Nikkei 225 stock average fell 175.77, or 1.1 percent, to 15,638.67. The broad Topix index declined 0.9 percent to 1447.88. Seven-Eleven Japan Co. and other retailers extended their retreat after a report showed household spending shrunk in June from May, fueling worry these companies may not meet their earnings forecast. The retailing subindex was the third biggest drag on the Topix.

    ``It's hard to see where the selling of retailers stops,'' said Minoru Tada, a director at World Nichiei Securities Co.'s equity department.

    In other markets, Korea's Kospi index fell 0.9 percent, led by Samsung Electronics Co. as spot semiconductor chip prices fell for a sixth time in nearly three weeks. Australia's ASX200 Index slipped 0.1 percent as miner Rio Tinto Ltd. dropped after posting lower than expected earnings and raising its takeover offer for North Ltd. New Zealand's Top 40 Index rose 0.1 percent, led by Fletcher Challenge Ltd.'s energy division on hopes it may soon be put up for sale.

    Japan's Sony, the maker of the PlayStation 2 video game console, fell 90 yen to 9,940. Toyota Motor Corp., the world's No. 3 automaker, declined 60 yen to 4,700.

    Selling was accelerated by redemptions in some mutual funds such as the Big Project-N fund managed by Nomura Asset Management Co., traders said. The six-month holding period of Japan's biggest fund with capital of more than 1 trillion yen expired this week for some investors. Such redemptions may force fund managers to cut their holdings in some stocks to raise cash to pay their clients.

    Nomura's Big Project-N fund lost about 20 percent of its value in the past six months, while the Topix index declined 15 percent during the same time period. The Japan Open fund managed by Nikko Asset Management Co.'s lost 24 percent of its value in the same time period.

    Seven-Eleven Japan, the nation's biggest convenience store chain, declined 320 yen to 7,270. Fast Retailing Co., a clothing retailer, fell 1350 yen to 34,000.

    Japanese households spent less on food, clothes and household goods in June, the government said.

    Korea

    Korea's Kospi fell 6.72 to 715.36. Samsung Electronics, the world's fourth largest semiconductor maker, fell 1.2 percent to 298,000 won. Hyundai Electronics Industries Co., the second largest memory chipmaker, fell 0.5 percent to 19,700 won.

    ``Semiconductor shares such as Samsung Electronics are falling as investors are worried that the decline in chip prices could hurt their profits,'' said Suh Hong Seok, a strategist at Daishin Economic Research Institute.

    The spot price for the industry-standard 64 Megabit dynamic random access memory chip fell 0.5 percent to $8.46, marking a three-week decline of 5.6 percent. Although local chipmakers export the bulk of their products on a contract basis, the spot price often determines future contract prices.

    The Philadelphia Stock Exchange Semiconductor Index, which international investors track to benchmark the industry's performance, fell for a third day, shedding 0.4 percent.

    Investors were also reluctant to buy stocks before the release of U.S. job figures later today.

    ``Foreign investors are waiting for the report, which may lead to an interest increase in the U.S.,'' said Jeon Sang Pil, a strategist at Samsung Securities Co. ``Until then, investors won't be willing to trade aggressively.''

    Australia

    Australia's ASX200 index fell 0.20 to 3274.90. Rio Tinto, the world's second largest miner by value, fell 2.5 percent to A$24.90.

    The company yesterday said first-half profit rose a smaller- than-expected 33 percent to $677 million as global demand for industrial metals such as copper pushed prices higher. Analysts had forecast net income of around $721 million.

    Rio Tinto also raised its hostile bid for rival iron ore producer North Ltd. by 25 percent to $1.75 billion, trumping rival Anglo American Plc's bid.

    ``This bid is getting closer to the real value of the assets,'' said John Sevior, who includes North shares in the A$8 billion of equities he helps manage at Perpetual Investments in Sydney. ``These are prize assets in the world market. North is very important to Rio, given their aspiration to be a bigger player in the iron ore industry.''

    North rose 5.4 percent to A$4.86.

    New Zealand

    New Zealand's Top 40 Index rose 1.32 to 2132.44. Fletcher energy rose 4.3 percent to NZ$7.78, after earlier trading at a 32- month high of NZ$8.01.

    ``It's speculation that Fletcher energy will probably be the next takeover target'' among the company's four divisional stocks, said Grant Williamson, operating partner with broker Hamilton, Hindin, Greene.

    Fletcher energy has gained more than 15 percent in four days as investors bet the company could decide by the end of the month whether to sell or establish the business as a stand-alone company.

    That speculation, coupled with proceeds of the company's $2.5 billion sale of its paper division to Norske Skogindustrier ASA, is boosting demand for the stock, said Williamson. He adds many brokers value the stock at more than NZ$10.00 a share.

    Warehouse Group, the nation's largest retailer, fell 2.1 percent to NZ$5.63. The company, which today posted a 10 percent rise in fourth quarter sales, said sales growth slowed amid rising interest rates, low consumer confidence, and rising petrol and tobacco prices.

  • HSBC to buy bank

    HSBC is considering buying a bank in the Philippines to expand its retail banking operations in the country, says Philippine central bank governor, Rafael Buenaventura.

    He told Bloomberg that HSBC's unit in the Philippines would like to buy 100 percent of a Philippine bank. HSBC has been operating in the Philippines since 1875 and currently operates five branches, four in metropolitan Manila and one in the southern city of Cebu.
  • Bank merger announced

    Banco de Oro Universal Bank, owned by Philippine retail tycoon Henry Sy, will merge with Dao Heng Bank Philippines, a subsidiary of Dao Heng Bank, Hong Kong.

    The two banks announced that the merger would be executed through a share swap arrangement. Under this plan, Dao Heng Bank will get a minority stake in Banco de Oro and will be represented in the management of the merged bank with Banco de Oro being the surviving entity. Banco de Oro president, Nestor Tan, said Banco de Oro would benefit from Dao Heng's expertise in consumer banking. Dao Heng Bank managing director, Randolph Sullivan, said an alliance with Banco de Oro would strengthen Dao Heng's competitive position in the Philippines and provide the group with a wider access for its extensive range of financial products and services.
  • Asia Online applies for US listing

    Undeterred by weak markets, provider of dial-up and high speed internet access, Asia Online has filed the first draft for registration of its US IPO this week. The company is looking to raise as much as $100 million from the issue according to a source close to the deal. The source also says Asia Online is different from recent listings in that it is not a ‘pure’ portal and looks to generate what he terms “genuine” revenue.

    “This is a company that is developing its web design business and hosting capabilities,” he says. “It will benefit from being an outsourcer.”

    However, Asia Online has yet to make a profit. For the first six months of this year, for example, it posted a loss of $20 million. According to its filing, the company expects “to remain unprofitable for the foreseeable future”.

    There has been no set date for the listing. Credit Suisse First Boston is managing the deal.
  • When press conferences go wrong

    Tom.com’s press conference on August 1 — in which chief executive officer Sing Wang outlined Tom’s half-year results to June 30 — was less than a total PR success.

    The presentation started smoothly, with Wang putting the best possible spin on the HK$197.9 million ($25.37 million) operating loss the company has reported for the half year. About HK$146.5 million of this was spent on marketing and web development. Against these towering figures, Wang announced an unaudited consolidated turnover, for the three-month period ended June 30, of HK$5.279 million.

    The company’s biggest revenue generator by far is the interest earned on the $876 million it raised last March, listing on Hong Kong’s Growth Enterprise Market (Gem). The company reported HK$54.109 million in interest income for the six-month period.

    Wang, sitting beside a silent Guy Look, the company’s chief financial officer, announced that the Li Ka-shing helmed portal has cut operating costs by about 50 percent and that the website is attracting four million page views daily.

    Wang also announced that the Chinese government has granted Tom.com an investment holding company licence, which allows the company to invest in mainland telecommunications and technology firms.

    Now journalists are usually lulled into a stupor at these affairs. Q&A sessions are a time for a few polite queries, following which reporters are dispatched to write stories with facts straight from the press release.

    This press conference was different. Reporters queued to ask Wang how the company could reconcile its cheery forecasts with the fact that it laid off 80 of its staff the week before. The company announced the redundancies in a statement that said the firm was preparing for “rapid expansion in the mainland through acquisitions and internal growth”.

    When one journalist asked Wang to give a breakdown of revenue, the CEO said such detailed information would be provided at an analysts meeting later that day. The reporter, clearly annoyed at being thus dismissed, spluttered that Wang would “not get away with that”.

    This was soon followed by another reporter’s question, likewise tinged with annoyance, in which Wang was asked if he intended to disclose the most market sensitive information to the analysts — and therefore the investment banks and their institutional clients — before it intended to fully brief the public at large.

    Things became unhinged from there, as journalists began to ask questions out of turn and in raised voices. Wang and Look, looking lost, quickly shut the press conference down.
  • The aftermath

    Tom.com’s share price closed at HK$5.00 on August 2, down 9.3 percent for the week. It has since recovered to HK$5.30.

    “I think they’d better reduce their cash burn rate. The personnel costs are quite high, the web development costs and high, and we haven’t seen much content from them,” says Jonathan Iu, head of internet research at SG Securities.

    Tom.com won’t give a detailed description of the type of people that were made redundant, but has said in a statement that they are mainly from the content, production and technology departments. On July 17, the company announced that Carl Chang, the CEO that was centrally involved in Tom.com’s IPO, was reassigned to a new role within Hutchison Whampoa.

    “They have recognised that their strategy has not been working,” says Iu. “They are getting rid of some of their web development people, they are probably going to hire people,” most likely from the mainland, through acquisitions made via their investment holding company licence.

    “They still have about HK$700 million. Because it is a Li vehicle, financing is not a problem. I don’t think they will go back to the market. If they need more money they might seek a parental solution,” says Iu.
  • Singapore puts cash into Warburg Pincus fund

    The Singapore government has pledged to put up part of a $2.5 billion venture capital fund being set up by Warburg Pincus, a New York-based private equity partnership. Warburg Pincus did not identify the specific arm of the Singapore government contributing to the fund.

    The new fund, Warburg Pincus International Partners, is set to close in September with its target size more than double the $1.2 billion originally planned.

    Warburg Pincus says the fund has already received commitments totalling $1.9 billion from investors including the Singapore government and Credit Suisse Group. The fund will invest in European internet start-ups.
  • Keppel, SFK form $100 million venture fund

    Singapore’s Keppel Telecommunications and Transportation has formed a 50-50 partnership with Israeli investment group, Shrem Fudim Kelner (SFK) Group, to manage a $100 million venture capital fund.

    The fund, to be launched in the last quarter, will invest in technology, media and telecoms companies. SFK Technologies chief executive, Shuki Gleitman, says the fund size could increase to $150 million and he expects 50 to 60 percent to be invested within two to three years. It will make most of its investments in Israeli, American and European companies that need expansion and mid-stage funding.
  • Creative Technology to acquire more IT firms

    Singapore’s Creative Technology says it is spending $50 million every three months to buy stakes in companies as part of its internet strategy.

    The investment will be “very strong on personal digital entertainment (PDE) and broadband companies,” says the company. It also expects to promote the sale of its sound cards and PDE products such web cameras and MP3 players.

    Last year, Creative established a $100 million fund for internet, broadband and PDE companies and doubled its size earlier this year. The entire $200 million fund was spent by June in 40 internet, broadband and PDE companies.
  • Indiagames.com on second funding round

    Games portal, Indiagames.com, is in negotiations with international investors to raise between $5 million and $10 million for its second round of fund raising. In the first round, Indiagames.com raised 60 percent of the total $1 million from Infinity Technology and the balance from IL&FS Venture.

    Apart from its internet and touch-screen kiosks where its games can be accessed, the company has developed a game called Yodha, which will soon be available in CD-ROM format.

    Company officials say a number of strategic tie-ups are in the offing and that it is negotiating with several international search engines that have recently entered India. Indiagames’ projected revenue for the year 2000-2001 is at around $1.5 million and has pegged its worth by end-2002 at $46 million.
  • Sybase links up with Hong Kong firm

    Sybase, an e-business solutions company and North 22 Technology Services Group (Hong Kong) have formed a joint venture to target Asia’s enterprise portal market.

    North 22 is the parent company of 8layer.com, an application services provider (ASP). Earlier this year, North 22 formed an alliance with Sybase to provide application services utilising Sybase’s Enterprise Portal (EP) solution. The Sybase EP personalises information and transactions to each specific user and integrates applications across the enterprise.

    Sybase says it expects the enterprise portal portion of its business to represent more than 50 percent of its customer base within the next 12 months. Analysts consider enterprise portals as the next evolution of intranets.
  • iAsiaworks raises $117 million listing on Nasdaq

    iAsiaworks, provider of internet services for companies doing business in the Asia-Pacific region, sold 23 percent of its outstanding stock on August 3, generating $117 million from the transaction. Goldman Sachs managed the sale.

    Indicatively priced between $13 and $15 per share, the issue’s offer price was eventually set at the low end, at $13 per share. iAsiaworks sold nine million shares. According to one US investment banker, the fact that the stock finished its trading debut at $9.50, registering a fall of 26.9 percent was indicative of poor investor sentiment towards internet-related stocks. A source says that the books were four times covered but this could not save the share price from falling.

    “You would expect slightly better performance with the books [covered] as they were,” he says. “But it [the share price] didn’t touch its listing price. Opening a dollar down meant everyone wanted to sell immediately. I think there’s only one direction for the stock now.”

    Recent internet issues emanating from Asia have fared even worse, in particular China portals Netease and Sohu, currently trading at 50 percent and 45 percent below their respective offer price. Korean portal, Daum Communications postponed its Nasdaq capital raising plans earlier in July as investor interest in Asia’s new economy companies was clearly on the wane.

    iAsiaworks’ target customers are local and regional enterprises, dot-coms, and multinational corporations. Its services are delivered from data centre facilities that are being established across the Asia-Pacific region and in Silicon Valley. Proceeds from the sale will be spent on increasing iAsiaworks’ data centres and acquiring other companies.
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