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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
London Asia | LSE:LDC | London | Ordinary Share | GB0008251513 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.85 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:0079Y London Asia Capital PLC 08 June 2007 For immediate release: 8 June 2007 London Asia Capital plc ("London Asia" or "the Group") Investments by China Exchange China Exchange Ltd ("CEL"), the Singapore incorporated financial services business in which London Asia announced it had taken a 40% stake earlier this week, has made three investments in Chinese financial services businesses for a total of #7.24 million. All three investments (described below) are headquartered in Xi'an, the capital of Shaanxi Province. Xi'an Private Equity Exchange ("XPEE") CEL has acquired a 40% stake in XPEE, the leading private equity exchange in Northwest China. The tough requirements and long waiting list for companies to list on the main stock exchanges in China has meant that assets and equity exchanges have prospered to serve the needs of companies that do not meet the criteria for the two major domestic exchanges, and for the sale of assets and projects, particularly state owned. There are currently around 25 active exchanges, and XPEE is the only one that is privatized. In 2006, there were 17,074 successful transactions on China's assets and equity exchanges, worth #1.8 billion, of which just over half by number and around two third by value were state-owned assets. XPEE also provides a range of investment banking and related services, including venture capital share custodian services. XPEE manages funds for wealthy individuals and companies, providing short term financing to enterprises. It also advises on financing, equity trading services, listings on local and foreign stock exchanges, and project finance. Xi'an Jiuleong Mortgage Company ("XJM") CEL has acquired a 90% stake in XJM, a registered mortgage company that provides mortgage and pawn broking services. Established in 2002, XJM currently focuses on Shaanxi Province, but is authorized to provide its services nationwide. Following the investment by CEL, the intention is that it will expand its operations across China. China's mortgage industry is growing at an estimated 40% per annum, as increasing numbers of Chinese opt for private ownership of property. However, penetration still remains low compared to other countries, with mortgages only 8.5% of total loans and 11.1% of total GDP in 2003, versus 34.3% of total loans and 50% of total GDP in Hong Kong. Pawnshops are widely used by small and medium sized enterprises ("SME's") in China as a source of finance, given the difficulties that they face in securing adequate funding from the banking sector. With the continuing expansion of the SME sector in China, in 2006 pawn broking revenues hit an estimated RMB 96 billion (#6.3 billion), up 40% from the previous year. Approximately 50% of the industry's total turnover relates to SME's. Pawnshops are being used by investors in the stock market, with the investor borrowing up to 80% against the value of the stock pledged with the shop, paying a 2% management fee - similar to the margin finance facilities offered in other countries. With the surge in the Chinese stock market, this has been a rapidly growing segment of the industry. At the end of 2006, there were less than 2,500 pawnshops and mortgage companies in China. By comparison, in the West there is an estimated 1 pawnshop for every 20,000 residents. To reach this level of penetration in China there would need to be 66,000 shops. Shanxi Yuansheng Credit Guarantee Limited ("SYCG") CEL has also acquired an 80% stake in SYGC. Established in 2005, it provides credit guarantee services, mainly targeted at SMEs applying for loans. Demand from SMEs for credit guarantees in China far outstrips supply, due to the high growth experienced by the SME sector and tight credit restrictions and lending terms imposed by the banking sector. The amount of SME loans guaranteed by credit guarantee companies in China has increased rapidly since 2000 - guarantees outstanding reached RMB 387 billion (#25 billion) in 2005. The sector is ripe for consolidation as most of China's Credit Guaranty Companies (CGC) are very small. Of the 225 CGCs surveyed by the Chinese Government in 2004, the average asset that each carried was approximately RMB33 million (#2.2 million) and the average number of employees in each was seven. Simon Littlewood, London Asia Chief Executive, said: "In the last three weeks, London Asia has invested nearly #12 million in four new companies in which it holds 40% stakes, the combined capital of which is over #27 million, with those businesses making investments off their own balance sheets of #8.8 million. "These investments significantly extend the range of services our investee companies can offer to SMEs in China. Most struggle to secure adequate finance, given the difficulty of accessing the main stock markets, and the relatively undeveloped banking sector which tends to focus its lending on larger businesses. The range of licences the Group has acquired over the last few weeks will open up new opportunities for the Group." For further information please visit www.londonasia.com or contact: Simon Littlewood John West/Andrew Dunn Jonathan Wright London Asia Capital plc Tavistock Communications Seymour Pierce Tel: 020 7231 0282 Tel: 020 7920 3150 Tel: 020 7107 8000 This information is provided by RNS The company news service from the London Stock Exchange END MSCILFFDRLIDIID
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