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SCMP Article: Good Read; Very Promising.
Thursday, April 5, 2001
China seen as global trend-setter
LYDIA ZAJC in Beijing
--------------------------------------------------------------------------------
China could lead the world in making Internet Appliances (IAs), once the simple home or mobile devices surpass personal computers as the instrument of choice for hooking up to the Web, National Semiconductor executive Roland Andersson said at Comdex/China on Wednesday.
"We believe that China will be the trend-setter in the 21st century," said Mr Andersson, who is senior vice-president of worldwide sales at the chip-maker.
Mr Andersson cited company statistics that predict the PC's popularity as an Internet link will be overtaken by other devices, such as mobile phones and set-top boxes which turn a television into Web surfing instrument, in 2003. By 2005, there would be more than 300 million of PCs in use – compared with more than 800 million for all the other devices, he said.
Also, the take-up of mobile phones in China is growing extremely quickly. China was adding about three million new cellular phone subscribers every month, Mr Andersson said.
The nation already produces more than 10 per cent of the world's electronics. China's big domestic market, its strength in manufacturing electronics and its low-cost labour pool could boost it into the top country for the creation of IAs, Mr Andersson said.
National Semiconductor is in the IA business itself – it runs a joint laboratory with giant Chinese computer maker Legend to develop the low-cost devices. The international company has a line of high-quality, x86 processors called Geode for use in such gadgets.
IAs have been seen as an up-and-coming trend: from refrigerators that connect instantly to online grocery stores to re-order food, to palm-sized units which can surf the Internet and are as easy to use as phones.
China could also sell such devices abroad. "A strong home market combined with expert [manufacturing] will support export growth out of China as well," Mr Andersson said.
Mr Andersson spoke to a crowd of about 400 people at Comdex/China 2001, which runs from Wednesday to Saturday in Beijing. The theme of this year's show is "e-Solutions for the New Economic Age".
The 2001 event is the fifth annual Comdex/China, which is an offshoot of the enormous Comdex get-together in Las Vegas every year. The venture in Beijing was organised by China's Ministry of Information Industry, the Ministry of Science and Technology, and the China Council for the Promotion of International Trade, along with overseas organisers Key3Media and International Data Group or IDG.
Mr Andersson said after his speech that China's domestic market was so large, that if local manufacturers could figure out what their consumers wanted, they would have a volume "that other countries would kill for".
China's population is more than 1.2 billion.
The nation has lured electronics manufacturing away from other hot spots such as Taiwan, Mr Andersson said. "China has proven it can manufacturer at lower cost than anyone else."
"With that, they can conquer the world, because they [IAs] need to be affordable," Mr Andersson said.
Also, if Chinese manufacturers wanted to win other markets, they need to develop brand names that could be exported elsewhere, he added.
In a press conference after his talk, one journalist pointed out that set-top boxes were not that successful in China. National Semiconductor executives replied the set-top box market was still developing worldwide.
rip52 - Although your questions are both relevant and timely, I
believe the only honest answer possible to them ia a " Maybe!"
However, because of Dr. Phan's position in China and the relationships that he has established and cultivated, IMHO, if
any US based company has a chance, at this moment, in China it
is HRCT. At least, that is where I am placing my money!
thanks kiel for the update. eom
mmayr wrote:
"Anyone who is under the age of 40 should eventually see good results from HRCT. Anyone over 60 who holds this stock is probably at a higher risk level. At this point, I'm like many ~~ I just don't know. There are health variables and many other variables."
Would this not be true for any long term hold...seems rather
obvious!
Article: SOE mergers allowed
Thursday, April 05, 2001
SOE MERGERS
Foreigners to be allowed to conduct SOE mergers
Apr 5 2001 10:05AM
Homeway
Foreign investors will be allowed to conduct mergers and acquisitions of the state-owned enterprises (SOEs) in Xi'an, capital of northwest China's Shaanxi Province, the city announced Tuesday, Xinhua reports.
Foreign investors will also be allowed to buy or even hold the largest proportion of SOEs' shares, according to the announcement.
This means another big step forward has been taken to revitalize the SOEs in northwest China, local officials said.
According to an official document, the mergers and acquisitions of SOEs by foreign investment will be achieved through contracts, equity markets, stock markets and the transfer of stock rights.
On the one hand, the government will take measures to support foreign investors who wish to merge Chinese SOEs; on the other, the government will settle the SOEs' debts, exclude non-operational capital, and make suitable arrangement for laid-off workers, the document explained.
"Mergers and acquisitions have proved to be effective means worldwide to attract foreign investment," said an unnamed official, citing the fact that over 70% of the money circulation in the world is facilitated in this way.
"If the mergers and acquisitions succeed in Xi'an, the city will attract more investment," the official noted.
He also added that the mergers and acquisitions will not incur loss of state-owned assets.
In addition, the sectors with great potential for high profits, such as banking, insurance and tourism, will also be opened to foreign investment, local officials said.
The Chinese government has emphasized on many occasions that China will revitalize its SOEs by various means and encourage foreign investors to participate in this reform.
"We hope that foreign investment, technologies and management experience will help accelerate the reform process of China's SOEs, " an official with the Chinese Ministry of Foreign Trade and Economic Cooperation (MOFTEC) told Xinhua.
In addition, the four leading sectors of information, machinery, light industry and petrochemicals have expressed a welcome for foreign investment, sources said.
Copyright (c)2001 Beijing Homeway Info.Media Ltd.All Rights Reserved
marshell - Although I fully agree with your post, I cannot help but think that we have gone down this road at least once
before.
OT: Mark - I was going for the laugh! eom
OT: IMHO, countries will continue to display paranoid behavior
under the guise of territoriality however, the real tragedy occurs when military service personnel become pawns in a nation's
gesturing.Our thoughts & prayers should be with them.
Mark - are you suggesting that the US government has engaged
in the practice of providing mis-information?
Origin of GEM IPO Funds Information: =?big5?B?pl7C0CA6IEludmVzdG1lbnQgSW5mb3JtYXRpb24gUmVxdWVzdA==?
Date: 4/3/01 9:55:05 PM Eastern Daylight Time
From: JamieLam@hkex.com.hk (Jamie Lam)
To: Minddoc7@aol.com
Our reply is: -
Thank you for you inquiry.
We are sorry to say that we don't have the statistics regarding the origin
of GEM IPO funds. Accordingly we are not able to provide you with the
information requested.
> -----Original Message-----
> From: Minddoc7@aol.com [SMTP:Minddoc7@aol.com]
> Sent: Sunday, April 01, 2001 5:07 AM
> To: JamieLam@hkex.com.hk
> Subject: Investment Information Request
>
> Hello -
> I was wondering if you could provide me with an estimate of the average
> percentage of GEM IPO funds that are of foreign origin? I realize that the
>
> range might be quite
> broad, but I am interested in an approximation. Once again, I wish to
> thank
> you for
> your time and anticipated cooperation.
> Dr. XXXXXXXXXXXX
> MINDDOC7@aol.com
OT: The Year: 2007; The Scene: Somewhere in rural NE
" Grandpa, is it true that you once had money? "
" Yes, dear, that is correct. "
" Well, where did it all go, grandpa? "
" I lost it all during the stock market crash of 2001."
" Grandpa? "
" Yes, dear? "
" What's a ' stock market? '"
" Now that's a tough one!!! "
SCMP Article: Some reason for optimism???
Tuesday, April 3, 2001
US firms see better mainland margins
MARK O'NEILL in Beijing
--------------------------------------------------------------------------------
Three-quarters of United States companies in China expect profit margins to improve this year and more than 80 per cent plan to expand their operations, according to a survey published yesterday by the American Chamber of Commerce in China.
The survey was part of the chamber's 2001 white paper, its third annual report on US business in China. The report, drawn up after extensive talks with the chamber's 650-member companies since July last year, was presented to government economic ministries last week.
About 160 companies responded, of which 61 per cent said their profit margins would improve this year over 2000, with 14 per cent saying they would improve substantially.
Asked about five-year business outlooks, 45 per cent were optimistic, 46 per cent cautiously optimistic and 8 per cent neutral. On their future plans, 61 per cent said they would expand gradually, 24 per cent expand rapidly and 9 per cent no change.
On their biggest headaches, 67 per cent cited bureaucracy, 56 per cent the difficulty of attracting, developing and retaining talented staff, 43 per cent transparency, 42 per cent corruption and 38 per cent market access.
Chamber chairman Tim Stratford said the business environment was difficult but better than five years ago.
"Foreign businesses have become more sophisticated and are recruiting better talent. The government has become more pragmatic. The nature of our dialogue with Chinese officials has improved over the last five years," he said.
"Over the next five to 10 years, China's economy will have the highest growth in Asia, which you will not see in Japan or South Korea. As China's economy grows, there will be more [business] opportunities."
Mr Stratford said reforms to which China was committed by membership of the World Trade Organisation were critical for the country's continued economic development and would benefit US firms by fostering a more transparent and predictable business environment, and dramatically expanding market access for foreign goods, services and farm products.
"Given the breadth and depth of the numerous commitments made by China during the negotiation process, full compliance will not be easy and will not be achieved overnight.
"Over the next six years, hundreds of old laws and regulations at the national and local level must be amended to become WTO-consistent."
Mr Stratford said Chinese leaders faced the task of maintaining employment and family incomes at socially acceptable levels as inefficient state-owned enterprises met foreign competition pressures.
"If employment gets out of hand and if a viable safety net cannot be established and maintained, then Chinese leaders may be forced to choose between domestic turmoil and deferring implementation of some of their WTO commitments," he said.
CABBY, after reading what has been posted over the last 24 hrs.
I do believe that the question is more serious & much broader
than you suggest; namely, how can HRCT shareholders continue to
trust and hold for the long term if they are not kept informed
of the company's operations, but have to " discover " them only when financials are made public? Once again, we have seen very poor judgement on the part of HRCT Officers. I will con-
tinue to hold only and only if, the SA IPO occurs this month.
Article:Listing rush begins anew
Apr 3 2001 9:46AM
Homeway
While most venture capitalists are pulling stakes out of the battered high-tech stock market, Chinese software companies are doing the opposite: planning a new gold rush through getting listed on the mainland, Hong Kong and overseas markets.
The move was heralded by Shenzhen-based Kingdee International Software Group Ltd, which became the first listed software company from the mainland on the Growth Enterprises Market in Hong Kong in February.
Following Kingdee's footsteps, Top software - a Chengdu-based high-tech firm - succeeded with an initial public offering (IPO) in Hong Kong last Friday.
Officials from other major industry players including the Beijing-based Kingsoft, Start-Sunway and Federal also claimed last week on E-Shock talk show that they were going full steam towards listing in the near future.
Federal, the biggest software retailer in China, recently unveiled its IPO plan to get listed in Hong Kong later this year. Kingsoft, which focuses on office applications and game software, plans to try to get listed on the proposed second-board market on the mainland. Start-Sunway said it was gearing to get listed by the end of next year.
Analysts said behind the gold rush was nervousness of getting knocked out as most of Chinese software companies are facing two major problems: shortage of capital and small-sized operations, according to Business Weekly.
As most software companies are private firms, IPOs serve as a quick way to channel capital for long-term development and to bring them closer to the world market. It will also benefit their brand reputation and overseas business, analysts say.
Kingdee piled up US$9 million through its IPO, which the company said would be used for future acquisition, business software development and sales network expansion.
Daniel Huang, vice-president of Kingdee Software Technology (Shenzhen) Co Ltd, said the company's IPO marked the company's most critical step towards becoming the biggest industry player in China.
"What Kingdee cares more about is that our IPO will bring us to a globalized and mature capital market and elevate our reputation in the world," said Huang.
Kingdee has set up an international business department to rival its US counterparts. This year, sales of their enterprise management software overseas will contribute 7% to its total sales, Huang said.
Start-Sunway, another major software company, is even more ambitious: It announced recently it would establish a research and development (R&D) center in the US Silicon Valley and the revenue from the international market was expected to account for 30% of the total.
"We should not totally depend on the existing team to develop the international market," said He Enpei, president of Start-Sunway.
"We hope to have talents with international background in our management team and an R&D team, which will bring us a tremendous edge." However, many industry analysts doubt how far the IPO fever can carry Chinese software companies under many bottleneck problems yet unsolved, such as management and piracy.
"IPO could not guarantee sufficient capital and sustainable development of software businesses. This is obvious over-optimism in the industry," said Yu Fang, a Beijing-based industry analyst.
"Domestic software companies should focus on their core operations while increasing their business scale and get ready for international competitions," he said.
Copyright (c)2001 Beijing Homeway Info.Media Ltd.All Rights Reserved
Very Good ( Positive??? ) Article:
US equities
--------------------------------------------------------------------------------
Global Investor: A dash of psychology
By Daniel Bogler
Published: April 1 2001 15:53GMT / Last Updated: April 1 2001 23:33GMT
Investors: Come out with your hands up! As the world's stock markets have continued to lurch around at dangerously depressed levels, those paid to explain their gyrations have been forced to add a dash of pyschology to their analysis. The latest buzzword among equity strategists and economists, therefore, is capitulation.
Markets are capitulating, it seems, so are investors and - in a rather different sense - some companies are too. Just think of Nortel Networks, the Canadian telecoms equipment maker, which admitted last week that things were so murky it could no longer offer guidance on its future performance. The idea, of course, is that the point of capitulation and maximum gloom is precisely the point at which the market reaches its bottom - and, having flushed out the bears, the level from which it should then rally.
So what exactly are these signs of capitulation? One, rather obviously, is selling. US retail investors pulled $2bn out of equity mutual funds in February, according to fund tracker Lipper, the first net withdrawal since the Russian crisis in 1998. Institutional money managers too have taken money out of the market and are now sitting on record levels of cash, calculates Merrill Lynch.
A second indicator is sentiment. The latest investor optimism survey from UBS PaineWebber, released last week, suggests sentiment reached rock bottom around the turn of the year and confidence has started to rise again, though it is still rather shaky. More significantly, perhaps, investors have tempered their expectations of future gains. In the US they now expect an average return from stocks of 10.4 per cent over 12 months, stil high, but more realistic than the 20 per cent and more they had hoped for in 2000.
But none of this has yet culminated in the sort of climactic, heavy volume, sell-off that often signals the end of a bear market. Many analysts thought that we had reached this point three weeks ago. Between March 8th and March 22nd, the S&P 500 index dropped 12 per cent in 10 trading sessions to its lowest level for more than two years. Then it rallied 6 per cent in just four days. Unfortunately, that upswing has since petered out. It seems that capitulation is turning out to be a rather messy, prolonged process that is probably best appreciated with 20/20 hindsight.
Rather than speculating about the exact timing of a market bottom, it may therefore be more helpful to look at the fundamental building blocks needed for the start of a new bull market.
The first is undoubtedly monetary easing and lots of it. This is happening: the US Federal Reserve, the Bank of Japan and the Bank of England have all cut rates this year and the European Central Bank is expected to do so later this month (APR). An indication that this is starting to have the desired effect is the recent shift of the US yield curve from inversion - which generally signals recession - back to a positive slope. But more may be required. In the early 1990s, the Fed cut rates five times and by 250 basis points before the markets turned. So far, it has cut only 150 basis points.
A second factor is clarity on the depth of the downturn. This is gradually evolving. Hopes of a short, sharp, V-shaped contraction have been replaced by grudging acceptance that the downturn is more likely to be longer and U-shaped. The most probable scenario for the US is two or three quarters of profit (though not necessarily economic) declines, followed by several quarters of below-trend growth. This is hardly pleasant. But given that corporate profits fell 4.3 per cent in the fourth quarter of 2000 and are estimated to have dropped 8 per cent in the past three months, according to First Call Thomson Financial, the US may already be through the worst. The muted reaction to some recent profit warnings, at least in the computer and semiconductor sectors, suggests investors are adjusting to reality.
The third requirement is cheap valuations. This is a hotly debated topic. But even established bears are starting to see bargains. Peter Oppenheimer, global strategist at HSBC in London, argues that until recently, valuations had merely wiped out the excessive expectations of the bubble period. Now, however, he believes they are showing evidence of recessionary expectations and even, in some cases, the kind of overshoot that tends to be seen at the trough of a cycle. Using a discounted earnings model that has proved accurate in the past, he calculates that at current market levels, the implied real earnings growth for global equities over the next 10 years is now slightly negative - which does indeed sound gloomy. Perhaps, without realising it, investors have capitulated after all.
Contact Daniel Bogler
Good Morning, Mark-
Although I believe that you may have decided to trade some
HRCT shares at the wrong time, I have always respected your
apparent frankness and willingness to " lay it out there " for
us to do what we might with your posts. I salute you for that!
However, would you please do us LONGS a big favor; if and when
you decide to have that " wheelbarrel " full of HRCT shares
turn into a Little Red Wagon, give us the heads up!!! TIA :)
To belabor the point:
Sunday April 1 6:01 PM ET
IPO Market Ends Slow Quarter
By Emma-Kate Symons
NEW YORK (Reuters) - The first quarter was the slowest for new stock offerings in more than a decade, despite this week's multibillion-dollar spinoff of Lucent Technologies' Agere Systems Inc.
Only 25 companies went public in the first three months of 2001, a low unseen since the fourth quarter of 1990 when 19 initial public offerings were completed, according to figures provided by Thomson Financial Securities Data.
More than $7 billion was raised from IPOs in the first quarter, compared with $16.9 billion in the same period a year ago, when more than 100 companies went public.
Most of the first-quarter IPO proceeds, however, came from two spinoffs. KPMG Consulting Inc.'s (NasdaqNM:KCIN - news) $2 billion debut and Agere's $3.6 billion IPO contributed $5.6 billion to the total.
The deal flow is unlikely to pick up anytime soon, fund managers and analysts said.
``The market won't pick up until Nasdaq can stabilize and start to show it can hold above the levels where it is now,'' said Alan Loewenstein, assistant portfolio manager of the John Hancock Technology Fund, with $1.3 billion under management.
``If the market stays where it is, redemptions pick up and then there's no cash. There's a lack of liquidity.''
Year to date, the Dow Jones industrial average (^DJI - news) has fallen 8.4 percent and the Nasdaq composite index (^IXIC - news) -- the barometer for IPOs because it is the exchange where most new companies list -- has tumbled 25.5 percent.
For the Dow, it was the worst first quarter since an 8.9 percent drop in 1978. On the Nasdaq, the drop was the worst since the fourth quarter of 2000, when the composite fell 32.74 percent.
WHY BUY AN IPO WHEN BIG NAMES ARE BARGAINS?
Investors have turned to established technology companies, rather than riskier new public companies, while technology stocks remained deep in bear market territory and concerns about the slowing U.S. economy remained.
``Why buy (an IPO) if you can buy a Cisco (NasdaqNM:CSCO - news) or Oracle (NasdaqNM:ORCL - news) at $15?'' Loewenstein asked.
``I'm not saying these are the bottoms, but these are good prices to get involved with high-quality companies.''
When chief underwriter Morgan Stanley Dean Witter & Co. (NYSE:MWD - news) took Agere (NYSE:AGRa - news) to Wall Street this week with a debut price of $6 a share for 600 million shares, it raised less than half of what it originally expected. And this was after three price reductions and one delay.
What was touted as potentially the second-largest U.S. IPO ever, after last year's $10.6 billion spinoff of AT&T Wireless (NYSE:AWE - news), wound up in fifth place.
Morgan Stanley -- the top underwriter of U.S. equity sales in the first quarter -- also co-managed Loudcloud Inc.'s (NasdaqNM:LDCL - news) IPO earlier in March, with Goldman Sachs Group Inc. (NYSE:GS - news) The stock began trading at a reduced offering price of $6, but barely managed a rise in its debut. On Friday, the shares of the infrastructure services company closed at $5-23/32.
``This is the first time that they have had IPOs at $6 -- such a low price -- since 1987,'' said Thomson Financial Securities Data analyst Richard Peterson.
``It's rock-bottom prices.''
At the risk of being redundant another article mentioning that
companies have decided to postpone listing due to poor Market
conditions.
Friday, March 30, 2001
Pacific Broadband sets target of US$200m
HUI YUK-MIN
--------------------------------------------------------------------------------
Taiwan-based Pacific Construction Group plans to spin off its cable-television arm for a listing on the Hong Kong main board, according to banking sources.
Pacific Broadband, the third- largest cable TV operator in Taiwan, hopes to raise up to US$200 million from the flotation.
The proceeds would mainly be used to roll out its cable broadband network in Taiwan. The company, which is a subsidiary of Taiwanese conglomerate Pacific Construction Group, has a subscriber base of 600,000 households.
ING Barings has been appointed the sole bookrunner on the deal.
Sources said the company originally planned to merge with Taiwan Broadband Telecoms Corp, but later decided to seek an individual listing instead.
Pacific Broadband is waiting for Hong Kong Exchanges and Clearing approval and hopes to see its shares begin trading in the middle of this year.
If the listing plan progresses smoothly, it will become the biggest initial public offering on the Hong Kong market so far this year.
A number of companies have postponed their listing plans due to the sluggish market.
The Pacific Broadband move is the latest effort by a key Taiwan conglomerate to spin off a unit for a Hong Kong listing.
In January last year, Taiwan's largest textile conglomerate Far Eastern Textile group spun off its Shanghai polyester manufacturing unit, Far Eastern Polychem Industries, for a listing on the Growth Enterprise Market.
Investment bankers said Taiwanese companies were interested in listing their businesses in Hong Kong as the Taiwanese listing regulations had too many constraints.
"It takes a far longer period for companies to get listed in Taiwan, and companies need to apply for a quota before they can list," a banker said.
Investment bankers also said the Taiwanese Government's restriction limiting domestic companies to domestic investment also discouraged companies from seeking local listings.
**IPO/Stock Offerings Not Uncommon** The below is the major part
of an article from SCMP which seems relevent to the suspected SA/IPO delay.
Monday, April 2, 2001
Global slump shelves listing
DENISE TSANG and ENOCH YIU
--------------------------------------------------------------------------------
Manufacturer Prosperity International Holdings has shelved a HK$54 million share offering at the last minute, due to the downturn in the world's stock markets.
Yesterday, the laminate maker said it had frozen its share offering - which began on March 22 - and indefinitely shelved plans to list on the Growth Enterprise Market (GEM).
Just two days earlier the company was inviting reporters to a press conference to explain its plans. On Saturday night officials said the press briefing would be cancelled. In February, 11 GEM candidates scrapped listing plans even though approvals had been granted.
But unlike them, Prosperity not only had approval to list but also had launched its offer.
The turnaround comes in the wake of Friday's decision by the Government not to seek any alternatives to the Tracker Fund for disposing of its remaining HK$70 billion stock portfolio amassed during the market intervention in 1998.
Global markets have fallen dramatically in the first quarter, and as a result listing candidates are likely to generate lower funds.
United States stocks have taken a battering since the beginning of this year, with the Dow Jones Industrial Average losing 8.4 per cent and the Nasdaq 25.5 per cent.
It has been the Dow's worst first quarter since an 8.9 per cent drop in the 1987 crash. The performance of Hong Kong's Hang Seng Index has been even worse. It declined 14 per cent during the first quarter.
The Prosperity issue, sponsored by Oriental Patron Asia, had aimed to sell some 120 million new shares to professional and institutional investors via a private placing.
The offering price, ranging between 25 HK cents and 45 HK cents a share, was originally scheduled to be fixed tomorrow.
Under that timetable the company's debut on the GEM was planned to occur next Monday.
Yesterday, a company official said Prosperity was changing its flotation timetable even though the date of reviving the issue had yet to be determined.
Insiders said the share offering might be frozen until the stock market rebounded.
Prosperity, which has its headquarters in Hong Kong and a production base in Guangzhou, had planned to spend the proceeds of its offering mainly on installing additional production lines and buying equipment for making decorative sheets or high-pressure laminates.
Investment bankers said it was more common to see listing candidates trying to entice wary investors by slashing offer prices, instead of pulling out of share offerings such as Prosperity had done.
Software provider Epro slashed its share price 30 per cent below the low end of its indicative range, computer-system designer Beijing Beida Jade Bird Universal Sci-Tech cut its initial public offer (IPO) price by 41 per cent and Internet portal 36.com offered gift warrants to sweeten its IPO.
EZ - I went " toward the light " and look where I am!!! Looking
forward to our new forum.