Li’s ARA considers yuan IPO as currency demand wanes

SINGAPORE: ARA Asset Management, the manager of property trusts backed by Li Ka-shing, is considering Singapore’s first yuandenominated stock offering even as expectations for the currency’s appreciation wane.

ARA said it was exploring the possible establishment and listing of a real estate investment trust with assets located in China and traded in yuan, according to a statement to the Singapore stock exchange yesterday. The company was responding to media reports about the plans.

The company hired Citigroup Inc, Dbs group Holdings Ltd and Standard Chartered Plc for the initial public offering of one of its property funds, three people with knowledge of the matter said on Tuesday. The size and timing of the deal had yet to be decided, the people said, declining to be identified because the process is private.

The IPO is being considered even as lowered expectations for the Chinese currency’s appreciation this year mean demand for yuan-denominated investments in Hong Kong is slowing.

“It’ll be challenging to launch a yuan IPO in Singapore, where yuan deposits are much lower than in Hong Kong,” said Ronald Wan, a Hong Kong-based managing director at China Merchants Securities Co, which oversees about Us$1.5bil in assets. – Bloomberg