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Chinese blow to Singapore’s hub ambitions
By John Burton in Singapore
Published: March 13 2009 01:38 | Last updated: March 13 2009 01:38
Plans by the Singapore Exchange to become a regional trading centre for Chinese stocks suffered a setback on Thursday as one of the last two Chinese shares included in the main Straits Times index was dropped.
In addition, new allegations surfaced about possible accounting irregularities involving one of several Singapore-listed Chinese companies, or S-chips.
The SGX said Yanlord Land, a Chinese property company, had been removed from the STI because of its falling market value.
Cosco (Singapore), the last remaining S-chip in the STI, also appeared at risk of being removed at the next review in the six months since the Chinese shipping group now has the smallest market capitalisation among the 30 stocks in the index.
S-chip investors, meanwhile, were shaken by news that trading in Oriental Century, a Chinese-based education provider, had been suspended after the company said in a statement that its chief executive had allegedly “substantially inflated” the company’s balance sheet for its 2008 full-year financial results.
The SGX succeeded in attracting more than 100 Chinese companies, most of them medium-sized businesses, in the past five years as it sought to compete with the Hong Kong stock exchange for Chinese listings. The S-chips proved popular with local retail investors because of their cheap valuations and they were among the most heavily traded counters on the SGX.
But the strategy has been affected by the sharp fall in the shares of most mainland companies over the last year. The slowing Chinese economy meant 30 of the 109 S-chips reporting full-year 2008 results posted losses and analysts believe more will suffer earnings declines this year.
Investors also turned cautious recently after questions about accounting practices among several of the S-chips emerged. Trading in Fibrechem Technologies was recently suspended after auditors reported difficulties in confirming its cash balance.
Other S-chips could face potential financing problems.
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Chinese blow to Singapore’s hub ambitions
By John Burton in Singapore
Published: March 13 2009 01:38 | Last updated: March 13 2009 01:38
Plans by the Singapore Exchange to become a regional trading centre for Chinese stocks suffered a setback on Thursday as one of the last two Chinese shares included in the main Straits Times index was dropped.
In addition, new allegations surfaced about possible accounting irregularities involving one of several Singapore-listed Chinese companies, or S-chips.
The SGX said Yanlord Land, a Chinese property company, had been removed from the STI because of its falling market value.
Cosco (Singapore), the last remaining S-chip in the STI, also appeared at risk of being removed at the next review in the six months since the Chinese shipping group now has the smallest market capitalisation among the 30 stocks in the index.
S-chip investors, meanwhile, were shaken by news that trading in Oriental Century, a Chinese-based education provider, had been suspended after the company said in a statement that its chief executive had allegedly “substantially inflated” the company’s balance sheet for its 2008 full-year financial results.
The SGX succeeded in attracting more than 100 Chinese companies, most of them medium-sized businesses, in the past five years as it sought to compete with the Hong Kong stock exchange for Chinese listings. The S-chips proved popular with local retail investors because of their cheap valuations and they were among the most heavily traded counters on the SGX.
But the strategy has been affected by the sharp fall in the shares of most mainland companies over the last year. The slowing Chinese economy meant 30 of the 109 S-chips reporting full-year 2008 results posted losses and analysts believe more will suffer earnings declines this year.
Investors also turned cautious recently after questions about accounting practices among several of the S-chips emerged. Trading in Fibrechem Technologies was recently suspended after auditors reported difficulties in confirming its cash balance.
Other S-chips could face potential financing problems.
----------------------------------------------------------------------------------------
Other news updates at Singapore News Alternative:
1. Spore & HK May Face Greater Scrunity On Tax Issue
2. Spore, Japan & Mauritius Contribute To Spike In India's FDI
3. Tax Havens Makes Concession As Pressure Mounts
News Video Added:
1. The Obama Deception
2. Ex-Financier Madoff jailed after gulity plea
3. Debt-Ridden Romania Asks For Bail-Out
