Latest news with #JonWithaar
Business Times
03-08-2025
- Business
- Business Times
South-East Asian firms test Hong Kong waters amid IPO surge
[SINGAPORE] South-east Asian companies have mostly sat out Hong Kong's 2025 listing boom , but a cautious revival may be under way with four more initial public offerings (IPOs) from the region in the pipeline, according to the Hong Kong Stock Exchange (HKEX). Johnson Chui, HKEX's head of issuer services, told The Business Times that four South-east Asian companies are preparing to list, though he did not name them. If these plans proceed, they would mark the highest annual number of South-east Asian IPOs in Hong Kong since 2020, signalling a slow rebound after a prolonged slump. The pandemic and unfavourable macroeconomic conditions drove a steep decline in regional interest, with just three South-east Asian IPOs recorded between 2021 and 2024, compared with more than 65 in the five years prior. The new listings could include that of Singapore-headquartered apparel retailer Shein. In July, it filed for an IPO on HKEX after its plans to debut in New York and London were stymied by regulatory pressures . Chui told BT that the exchange continues to seek opportunities from the south. 'HKEX is deeply committed to strengthening ties with Asean markets,' he said, noting that the bourse frequently conducts roadshows in the region. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up In the first half of 2025, three regional companies listed on HKEX: Indonesia-based Nanshan Aluminium, Singapore biotech firm Mirxes , and Thai coconut water-maker IFBH . They accounted for 7 per cent of the bourse's 43 IPOs so far this year, as overall activity rebounded sharply. In H1, IPOs and cross-listings on HKEX totalled 210 deals, raising US$49.2 billion – more than nine times the US$5.3 billion raised a year ago, based on data from S&P Global Market Intelligence. The 43 IPOs in H1 2025 marked a sharp jump from the 29 in the same period in 2024, and the 27 in H1 2023. 'Most of the success we've seen in the capital markets in Hong Kong has been from Chinese companies,' said Jon Withaar, head of Asia special situations at Pictet Asset Management. Much of HKEX's fundraising surge has stemmed from the 175 dual-listed companies that also trade on the mainland's A-shares market. For these firms, Hong Kong's deep capital markets and currency fungibility provide greater flexibility. Mainland markets The prospect of expanding into the Chinese market has prompted some South-east Asian companies to make the leap. Listing on HKEX could lead to greater recognition among investors across Greater China, or the leverage of brand familiarity for fundraising. Thailand's IFBH, whose coconut water brand IF commands a significant market share in China, cited desires to grow its business in the wider region following its Hong Kong debut in June. ' Most of the success we've seen in the capital markets in Hong Kong has been from Chinese companies. ' — Jon Withaar, head of Asia special situations at Pictet Asset Management In addition, Hong Kong's efforts to attract listings from key sectors could draw the attention of Greater China companies. Specialist technology firms in China have flocked to HKEX as the bourse offered pathways to lessen compliance burdens for applications within the sector. This may be why cancer diagnostics startup Mirxes chose HKEX over the Singapore Exchange (SGX) for its IPO in May, citing better valuations and a more savvy investor pool. This is despite the company's links with Singapore government bodies such as the Agency for Science, Technology and Research, and the Economic Development Board. Homecoming bias Admittedly, South-east Asia's own IPO market has been relatively quiet, with fundraising reaching a decade-long low in 2024 . Fresh listings in H1 2025 have also underperformed compared to the year before, a Deloitte report noted. Local exchanges have remained more attractive than HKEX for new listings, with fundraising flexibility and policy incentives laying the foundations for domestic players to access funds. 'Major Asean members have their own currencies and domestic stock markets to fund business growth,' a Bloomberg Intelligence report noted in July. 'The bias remains for South-east Asian companies to list on their local exchanges in 'homecomings',' said Pictet's Withaar, pointing out that government-linked investment companies and sovereign wealth funds in countries such as Malaysia, Indonesia and Singapore often support large listings in the region. Such government involvement is expected to persist in South-east Asia's capital markets. 'Companies increasingly favour local exchanges over international ones due to regulatory support and growing domestic investor interest,' Stephen Bates, partner and head of deal advisory at KPMG in Singapore, told BT last month. As a result, little of Hong Kong's listing activity in the last few years has come from South-east Asia, Withaar noted. 'These are markets for Chinese and Hong Kong investors, who can understand Chinese businesses much more than (those) in Thailand, Vietnam or Malaysia.' Cross-listings Notably, HKEX may still find additional reach in dual-primary or secondary-listed companies which already trade on Asean exchanges. The bourse may already have signalled a strategic shift, which HKEX chief executive Bonnie Chan hinted at in a June interview: 'I am now beginning to realise that our sweet spot may not be private companies.' 'We're now more focused on companies which are actually already listed on another market, but might have outgrown their domestic market,' she added. Since 2022, international issuers have been included in HKEX's Stock Connect programme, which allows mainland Chinese investors to trade and settle shares listed on Hong Kong boards. Access to these investors may be why companies such as Malaysia-listed Capital A, the parent company of low-cost carrier AirAsia, is now seeking a secondary listing on the Hong Kong bourse. ' I am now beginning to realise that our sweet spot may not be private companies. We're now more focused on companies which are actually already listed on another market, but might have outgrown their domestic market. ' — Bonnie Chan, HKEX chief executive As part of efforts to woo more South-east Asian firms, HKEX has included several exchanges from the region in its list of recognised stock exchanges – allowing companies already listed on these boards to pursue secondary listings in Hong Kong without being subject to additional regulatory requirements. The bourse added the Indonesia Stock Exchange to this list in 2023, and the Stock Exchange of Thailand in March this year. The list already includes SGX, but not Malaysia's or Vietnam's main stock exchanges. Seventeen companies from South-east Asia –- including 16 from Singapore and one from Malaysia – are currently trading on both HKEX and their domestic bourses, Bloomberg data indicated. Even so, access to additional fundraising is far from a given for South-east Asian companies. SGX-listed real estate player LHN discovered this as it voluntarily delisted from the Hong Kong bourse in July, citing compliance costs and low trading volumes. Liquidity concerns, the company's board said, had limited its opportunities to conduct secondary equity fundraising on HKEX. Pictet's Withaar also warned that dealmaking in Hong Kong still suffers from deep cyclicality, where listing booms come and go. 'Just 18 months ago, there were miniscule levels of activity in the Hong Kong capital markets,' he said. 'This is unlike the US, which has a very deep and liquid market. There is always a steady stream of capital markets transactions.' When it comes to overseas listings, Wall Street exchanges Nasdaq and the New York Stock Exchange remain the gold standard for foreign companies due to better liquidity and valuations, he added. Compared to the three South-east Asian listings on HKEX, six regional companies have already gone public on Nasdaq in 2025, all of which are headquartered in Singapore.
Gulf Today
28-01-2025
- Business
- Gulf Today
China springs an Artificial Intelligence shock
A Chinese startup in Hangzhou has put out a new version of generative AI called DeepSeek, using chips of a lower sophistication because of the restrictions imposed on chips by the United States, and it has overtaken ChatGPT, which had come into the market in November 2022. ChatGPT had shaken up the world as it were, and there began a fierce competition between the big tech companies like Microsoft and Google to get ahead with a more sophisticated version to dominate the market. The Chinese have done what they seem to know best. They have adapted the AI contrivance and turned out a cheaper one, and DeepSeek has already been downloaded more than ChatGPT on Apple Store. Even as the valuations of the mostly American tech companies soared and investors poured in hundreds of millions of dollars to produce a better version of ChatGPT, the unknown Chinese startup had achieved a commercial breakthrough with the claim that it had invested a mere $6 million. It is not a surprise that the share prices of the tech companies in New York had tumbled down. Futures on Nasdaq 100 lost 4 per cent, S&P 500 lost 2 per cent. Share prices of chipmaker Nvidia fell by 11 per cent, of Oracle by 8.5 per cent, and AI data analytics company Palantir lost 6.5 per cent. The markets are in a panic, and when the panic subsides, which it will, normalcy would be restored. But the time of speculative valuation of AI companies is over. But things are yet to be established, to be confirmed. We still need the feedback from DeepSeek as there was from ChatGPT. Jon Withaar, a portfolio manager at Pictet Asset Management said, 'We still don't know the details and nothing has been 100% confirmed in regards to the claims, but if there truly has been a breakthrough in the cost to train models from $100 million + to this alleged $6 million number this is actually very positive for productivity and AI end users as cost is obviously much lower meaning lower costs of access.' That is a good caveat. Whether DeepSeek lives up to the hype or not, what has happened is that the market for AI devices has opened up. It is no more the monopoly of the American tech giants and their investors with deep pockets. The American monopoly of AI has been broken. And from China, the pricing down of AI devices could recur in Japan and South Korea. The threat of technology denial by the US will now become ineffective. But the dangers posed by AI devices in general do not vanish because they are now available at lower prices. The AI contrivances like ChatGPT and DeepSeek can be put to good and harmful uses, and there is need for regulation of some kind. What Sam Altman, the man who led the researchers who put out ChatGPT, had told the members of the US Senate still holds good: the need for regulation, for oversight. What is also of great interest in the emergence of DeepSeek is that technology cannot remain a secret in the global economy. A new technology is of no use if its products do not sell in the world markets. And however encrypted the technology might be in a device, it will be broken through, and it will be reconstructed. In more ways than one, global markets are free markets when goods and services are laid out in the open, and the users will find out the insides of the devices that they are using. It is good news for the people, and a sobering news for the tycoons who would want to make a killing with every new technological breakthrough. The radical aspect of DeepSeek is it is an open access device.
CBC
27-01-2025
- Business
- CBC
What is DeepSeek? The Chinese OpenAI rival sparking chaos in tech markets
There's a new player in AI on the world stage: DeepSeek, a Chinese startup that's throwing tech valuations into chaos and challenging U.S. dominance in the field. DeepSeek has rolled out a free AI assistant that it says uses cheaper chips and less data. On Monday, it overtook rival ChatGPT to become the top-rated free application available on Apple's App Store in the United States. U.S. stocks dropped sharply on Monday, as the surging popularity of DeepSeek sparked a selloff in chipmaker Nvidia and other companies that stand to benefit from investments in the technology. Whether DeepSeek's developments have the potential to really disrupt the industry is something investors will be paying close attention to, said Adam Sarhan, CEO of 50 Park Investments. "If it is something that can, then we have a situation where all these AI stocks and the market as a whole will be re-priced." What is DeepSeek? Little is known about the small Hangzhou startup behind DeepSeek, which was founded out of a hedge fund in 2023. Its researchers wrote in a paper last month that the DeepSeek-V3 model, launched on Jan. 10, cost less than $6 million US to develop and uses less data than competitors, running counter to the assumption that AI development will eat up increasing amounts of money and energy. DeepSeek offers the prospect of a viable, cheaper AI alternative, raising questions on the heavy spending by U.S. companies such as Apple and Microsoft, amid a growing investor push for returns. "We still don't know the details and nothing has been 100 per cent confirmed in regards to the claims, but if there truly has been a breakthrough in the cost to train models from $100 million+ to this alleged $6 million number, this is actually very positive for productivity and AI end users as cost is obviously much lower, meaning lower cost of access," Jon Withaar, a senior portfolio manager at Pictet Asset Management, said. One of the differences between DeepSeek's AI assistant, R1, and other chatbots like OpenAI's ChatGPT is that DeepSeek lays out its reasoning when it answers questions, something developers are excited about. "The dealbreaker is the access to the raw thinking steps," Elvis Saravia, an AI researcher and co-founder of the U.K.-based AI consulting firm wrote on X, adding that the response quality was "comparable" to OpenAI's latest version. DeepSeek-R1, which came out on Jan. 20, was released as "open-weight," which means that developers and researchers can look at its inner workings and build on it. It's not completely open source because its training data has not been made available, according to a Nature article. U.S. dominance in AI challenged One of the reasons DeepSeek is making headlines is because its development occurred despite U.S. actions to keep Americans at the top of AI development. In 2022, the U.S. curbed exports of computer chips to China, hampering their advanced supercomputing development. According to the paper on DeepSeek-V3's development, researchers used Nvidia's H800 chips for training. H800 chips are not top of the line. Initially developed as a reduced-capability product to get around curbs on sales to China, they were subsequently banned by U.S. sanctions. Marc Andreessen, the Silicon Valley venture capitalist, said in a post on X on Sunday that DeepSeek's R1 model was AI's "Sputnik moment," referencing the former Soviet Union's launch of a satellite that marked the start of the space race with the U.S. in the late 1950s. "DeepSeek-R1 is one of the most amazing and impressive breakthroughs I've ever seen — and as open source, a profound gift to the world," he said in a separate post. Nvidia drops 11% The impact was being felt in tech markets on Monday. Nvidia, whose chips are the top choice for powering AI applications, saw shares drop 11.4 per cent in premarket trading, while industry peers Broadcom and Marvell Technology fell about 11 per cent each. Microsoft, Meta Platforms and Google parent Alphabet fell between 1.8 per cent and 3.6 per cent. AI server makers Dell Technologies DELL.N and Super Micro Computer SMCI.O slid 5.6 per cent and 8.1 per cent. In Japan, startup investor SoftBank Group 9984.T slid more than eight per cent. Last week, it announced a $19-billion US commitment to fund Stargate, a data-centre joint venture with OpenAI. In his announcement of the Stargate deal, U.S. President Donald Trump said the U.S. was investing up to $500 billion in the private sector to fund infrastructure for artificial intelligence. European tech stocks also dropped on Monday in the technology sector.
Voice of America
27-01-2025
- Business
- Voice of America
DeepSeek's 'Sputnik moment' prompts investors to sell big AI players
Investors hammered technology stocks on Monday, sending the likes of Nvidia and Oracle plummeting, as the emergence of a low-cost Chinese artificial intelligence model cast doubts on Western companies' dominance in this sector. Startup DeepSeek last week launched a free assistant it says uses less data at a fraction of the cost of incumbent players' models, possibly marking a turning point in the level of investment needed for AI. Futures on the Nasdaq 100 slid almost 4%, suggesting the index could see its biggest daily slide since September 2022 later on Monday, if those losses are sustained. Those on the S&P 500 dropped 2%. Shares in AI chipmaker Nvidia fell more than 11%, rival Oracle dropped 8.5% and AI data analytics company Palantir lost 6.5% in pre-market trading. DeepSeek, which by Monday had overtaken U.S. rival ChatGPT in terms of downloads on the Apple Store, offers the prospect of a viable, cheaper AI alternative which has raised questions about the sustainability of the level of spending and investment on AI by Western companies, including Apple and Microsoft. From Tokyo to Amsterdam, shares in AI players tumbled. "We still don't know the details and nothing has been 100% confirmed in regards to the claims, but if there truly has been a breakthrough in the cost to train models from $100 million+ to this alleged $6 million number this is actually very positive for productivity and AI end users as cost is obviously much lower meaning lower cost of access," Jon Withaar, a senior portfolio manager at Pictet Asset Management, said. The hype around AI has powered a huge inflow of capital into the equity markets in the last 18 months in particular, as investors have bought into the technology, inflating company valuations and sending stock markets to record highs. Little is known about the small Hangzhou startup behind DeepSeek. Its researchers wrote in a paper last month that the DeepSeek-V3 model, launched on Jan. 10, used Nvidia's H800 chips for training, spending less than $6 million - the figure referenced by Pictet's Withaar. H800 chips are not top-of-the-line. Initially developed as a reduced-capability product to get around restrictions on sales to China, they were subsequently banned by U.S. sanctions. 'Sputnik moment' Marc Andreessen, the Silicon Valley venture capitalist, said in a post on X on Sunday that DeepSeek's R1 model was AI's "Sputnik moment," referencing the former Soviet Union's launch of a satellite that marked the start of the space race in the late 1950s. "Deepseek R1 is one of the most amazing and impressive breakthroughs I've ever seen — and as open source, a profound gift to the world," he said in a separate post. In Europe, ASML which counts Taiwan's TSMC, Intel and Samsung as its customers, dropped almost 7.5%, while Siemens Energy lost nearly 18%. In Japan, startup investor SoftBank Group slid more than 8%. Last week it announced a $19 billion commitment to fund Stargate, a data-center joint venture with OpenAI. Given the volatility, investors sought out safe-havens such as U.S. Treasuries, which pushed 10-year yields down nearly 10 basis points to 4.52%, while low-yielding currencies like the Japanese yen and the Swiss franc soared against the dollar. Big Tech has ramped up spending on developing AI capabilities and optimism over the possible returns has driven stock valuations sky-high. Nvidia alone has risen by over 200% in about 18 months and trades at 56 times the value of its earnings, compared with a 53% rise in the Nasdaq .IXIC, which trades at a multiple of 16 to the value of its constituents' earnings, according to LSEG data. Nick Ferres, chief investment officer at Vantage Point Asset Management in Singapore said the market was questioning the capex spend of the major tech companies. Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management said: "The idea that the most cutting-edge technologies in America, like Nvidia and ChatGPT, are the most superior globally, there's concern that this perspective might start to change." "I think it might be a bit premature," Ichikawa said.
