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Daily Dispatches – Chinese IPOs test the water

IPOs dip a toe in the water

IPOs dip a toe in the water

Finance Asia says that a number of companies will start marketing Hong Kong IPOs in the next few weeks after a lull during the mid-summer holiday season.

Chinese foot retailer Tenwow, which is backed by US private equity firm Carlyle Group, and online gaming company Forgame are first up before investors.

CICC, Deutsche Ban and HSBC are involved in the Tenwow float while JPMorgan and Morgan Stanley are arranging the Forgame listing.

Finance Asia says the two public offerings are expected to gauge the appetite for IPOs in Hong Kong, which has been toppled as the top IPO destination on concerns about China’s slowing economy.

UOB expands Indonesian operations

United Overseas Bank said the new advisory unit in Jakarta is part of its plans to double its lending to companies wanting to enter Indonesia for the first time, according to a report in Asian Banking and Finance.

UOB’s new advisory unit in Jakarta is the fourth bank that has opened since late 2011, when it created its first in Singapore. The others are in Kuala Lumpur, Bangkok and Shanghai. UOB is one of Singapore’s three largest banks by assets.

Last year, UOB saw an increase of 23% in the value of its loans to Chinese companies in Southeast Asia, contributing 25% of its total cross-border loan portfolio from only 3% in 2010.

Park parks KDB listing

Bloomberg reports that South Korea has scrapped a five-year-old proposal to sell Korea Development Bank, a signal President Park Geun Hye will use the nation’s biggest policy lender to channel more funds to companies.

The government proposes merging the lender with Korea Finance Corp. by July 2014 while selling the brokerage unit and other assets, the Financial Services Commission has announced.

The regulator will submit a revised version of the KDB Act, a mandate to break up KDB Financial Group Inc., this year to get parliamentary approval for the plan, it said.

China Construction Bank warns of bad debts

China Construction Bank suffered a surge in overdue loans during the first half of the year and could face a “hidden crisis” if the situation worsens, according to a report by Reuters quoting China Construction Bank chairman Wang Hongzhang.

His comments underscore rising concern in China about heavy debt and the increasing potential for sour loans as economic growth slows.

Wang said nonperforming loans remained a small portion of outstanding total loans, nonetheless NPLs had risen rapidly compared with a year earlier.

At the end of June, China Construction Bank held 90.4 billion yuan (US$14.77 billion) in overdue loans, accounting for 1.12% of the lender’s outstanding loans. The overdue loans were 13.4 billion yuan higher than at the beginning of the year, the bank said.

ING’s third time lucky

Netherlands-based financial conglomerate ING has signed an agreement with private equity firm MBK Partners to divest ING Life Korea, its South Korean insurance business, after two previous attempts fell through.

Asian Business and Finance reports that the transaction is valued at US$1.66 billion. Following the completion of sale, ING will own an indirect stake of about 10% in ING Life Korea valued at US$107 million.

ING has also signed a licensing agreement that will allow ING Life Korea to continue to operate under the same brand for a maximum period of five years.

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