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Strategies & Market Trends : HONG KONG

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To: ---------- who wrote (1569)	5/12/1998 3:27:00 PM
From: Tom	Read Replies (2) of 2951

Doug: More to your #1569... where you indicate companies "will place additional shares to raise cash." For those not familiar with this, it has been characteristic of Chinese-owned corporates to do so. They have an historical aversion to debt, preferring instead to tap the local equities market. Though some do not consider this financing the best practice in all cases, their analysis is often too self-serving. New share issues, along with equity-splits, dilute share prices but also serve to provide and maintain participation in those stocks by local investors -- an important source of new capital. Not all will continue this way. There are some interesting arguments and proposals being made based upon the origins and types of financing SE East Asian companies will require, or will be offered, in the future. And just how well some will prosper with it...and without it.

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