Fifty Asian Internet firms to get listed in 2000Despite the lingering decline of technology stocks on New York's NASDAQ stock market, dot.com fever continues to reign in Asia.International investment banks have not slackened in their quest to take public new Internet companies in the region. A well-known US investment bank Merrill Lynch is one of them as it believes the year 2000 will see more initial public offerings (IPO) for Internet firms in Asia buoyed by the Asian economic revival. "As many as 50 Internet companies in Asia are likely to go public this year," said Matei Mihalca, vice-president of Merrill Lynch Asia Pacific and head of the Asia-Pacific Internet Research. The figure more than doubles the number of last year. China alone has five Internet companies considering listing on the NASDAQ market, he said, and there may be five more entering the Hong Kong and the soon-to-be-established Shanghai and Shenzhen high-tech boards. "China has a huge market potential for the Internet business," said Mihalca during an interview, "There is an ever growing number of Internet users." This has led to a heavier involvement of investment banks in the sector, he said. Though the fall of the technology stocks on the NASDAQ in recent weeks has affected investors' confidence in fledging Internet businesses, the long-term perspective is bright, Mihalca said. "The Internet business is very promising," he said, "It has affected almost every industrial sector, ranging from fishing and building to food." Frank G. Zarb, chairman of the National Association of Securities Dealers in the United States, which oversees the NASDAQ, considered the market fall a result of a healthy correction after a strong rally weeks ago. "Qualified stocks will continue to stage good performances in the market," Zarb said in an recent interview. But times change. "Investors are more concerned about the profitability of the companies now. Internet players should adjust their marketing strategies and lower costs in response to that," Mihalca said. The role of investment banks such as Merrill Lynch is to explain the reasons for market shuffles to investors and to relate the actual performances of Internet companies planning to list, he said. Since January 1, 1999, Merrill Lynch has led five Internet IPOs in the Asia Pacific region (excluding Japan), raising a total of US$561.2 million in funds. It is also discussing ways to take several Chinese Internet companies public. "We prefer those with strong managements, sound creditability and good marketing," said Mihalca. He said Chinese Internet companies should nurture a corporate culture which relies on a board of directors to better protect the rights of all investors. The enhancement of transparency of company operations and its financial status and quicker decision-making also weigh heavily in building up a company's creditability and the confidence of investors. |
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