appConfigEntityId

bodyType

customContents

entityId

entityUuid

isVideo

articlePageQuery

article

articleSchemaContent

content

hooksArticlePageAdvertisementConfigArticle

appConfig

filter

json

liveArticle

SCMP Reporter

STATE of the art corporate finance has long been at the heart of Hong Kong's growth strategy, as anyone with a memory for new issues will attest.

Along with Deutsche Morgan Grenfell (DMG), Peregrine Capital is pushing the corporate finance boundaries back.

Tingyi (Cayman Islands) Holding, a Chinese noodle-maker underwritten by DMG, and Jingwei Textile Machinery, underwritten by Peregrine, are both at the very forefront of La Nouvelle Finance.

Stabilisation is the buying of shares in the secondary market shortly after listing in order to maintain the share price close to where the scrip was issued.

 In Hong Kong, this is called creating a false market and well-covered in Section 135 of the Securities Ordinance. The only time when underwriters can buy shares in the secondary market is to cover for over-allotment of shares as agreed between the stock exchange and the Securities and Futures Commission (SFC).

 In the basement corporate finance labs of Hong Kong, where the rocket scientists mix fizzing brews together in their computerised test-tubes, something has been found.

 What Peregrine and DMG have decided to do is simply carry out stabilising activities in London - or elsewhere with an understanding regulatory system.

 Stabilising issues in other markets isn't new to Hong Kong. Two examples spring to mind where the technique could have been used. In 1986, Hongkong Telecommunications was restructured in a deal including American Depositary Receipts and stabilisation may legitimately have been used. The 1993 flotation of Shanghai Petrochem, which also included a United States tranche of shares, also was permitted to stabilise.

 Given that neither Jingwei nor Tingyi is to be quoted in London, this latest batch seems different. But Peter Fu, managing director of Peregrine, says the wording of the Jingwei prospectus has been approved by the SFC. Yet, the same body was strongly against any stabilisation taking place here during the Shanghai Petrochem listing.

   Singapore has already legalised stabilisation and there is long-held opinion that it should be permitted here.

 Perhaps the matter has been settled by the SFC without the need for legislation. In which case, perhaps someone should tell Ermanno Pascutto not to bother completing his review of the Companies Ordinance and our corporations can simply adopt bits and pieces from other people's legislation as they think fit.

Learn to swim PICKING over the remnants of other people's meals isn't polite but 'Ship Vulture' of the Nautical Institute's local newsletter has left something tasty, and if you can't take a vulture's leavings, you can't take anything.

  The Marine Department has stepped up safety checks on vessels visiting Hong Kong so that more than 60 per cent are now stopped, to the anger and impatience of ship owners. One ship stopped recently had life-boats so bad that the company brought in to fix them said it would be cheaper to buy replacements.

  Despite the unsafe conditions, the ship was carrying a Cargo Ship Safety Equipment Certificate, except wherever they got this printed forgot to mention the word life-boat, never mind require them to be carried.

We tempt you HSBC is having the latest in a long-running series of re-organisations of its investment banking activities.

  In this case, James Capel is being merged with Samuel Montague in London, but the operation is unlikely to effect much in Asia.

  The bank has done so much messing around with divisions such as the investment bank formerly known as Wardley that we believe no one truly knows the exact permutations undergone over the past 10 years or so.

  Real histories from existing or former staffers and ludicrous suggestions from competitors or customers are equally welcomed from readers.

  First prize: A bottle of something. Second prize: We bring in the head hunters to fill your fund management post and offer it to all your competitors over an 18-month period, then act all surprised when people don't tumble over themselves to grab the job.

Real culture WHARF Cable has outdone itself in promoting its 'Penthouse Pets Bikini Photo Taking Session'. We got not one but six invitations delivered to the Business Post fax machine, including one for the editor-in-chief.

  We couldn't imagine why anyone would want to watch a load of Penthouse Pets photographing a bikini. We were even more confused by the disclosure that 'the pets will wear the wild and exotic bikini'. What? All of them at once? 



Corporate rocket scientists juggle test tubes, creating a new air of stability