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Ara Asset Management

March 21, 2012 by staff 

Ara Asset Management, ARA Asset Management (ARA), the manager of property trusts backed by Li Ka-shing, is considering Singapore’s first yuan-denominated stock offering even as expectations for the currency’s appreciation wane.

ARA said it’s exploring is 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 today. The company was responding to media reports about the plans.

The company hired Citigroup Inc. (C), DBS Group Holdings Ltd. (DBS) and Standard Chartered Plc (STAN) for the initial public offering of one of its property funds, three people with knowledge of the matter said yesterday. The size and timing of the deal have 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. The only other yuan-denominated stock listed outside of China, Li’s Hui Xian Real Estate Investment Trust (87001), is down 25 percent in Hong Kong since its debut last April.

“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 $1.5 billion in assets. “Investors have been lowering their expectations of yuan appreciation, making it difficult to do such a deal.”

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