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London Stock Exchange Aims to Lure Chinese Companies

The London Stock Exchange has opened its first office in Asia, and Singapore Airlines has posted strong second quarter results, but maintains a cautious outlook. Andrea Niem in Hong Kong takes a look at business developments in Asia over the past week.

More and more Chinese companies are trying to raise capital overseas and the London Stock Exchange (LSE) plans to use its new Hong Kong office, to persuade them to list their shares in London.

The stock exchange says its advantage lies in its role as a gateway to European investment funds eager to tap into the thriving Chinese economy.

The New York Stock Exchange already has an office in Hong Kong, and at least 16 Chinese companies listed in New York. There are just six Chinese companies listed on the LSE. Some financial analysts say the stock exchange is late in the game, but LSE spokesman Richard Webster-Smith says this is a misperception.

"The Chinese economic miracle has barely begun yet. So the idea that we're late in the game is a misnomer," he said.

Singapore Airlines beat expectations with second-quarter profit of more than $200 million, a 17 percent surge from the same period a year earlier. The rise was a result of growth in travel demand.

Airline chief executive Chew Choon Seng says the carrier has bounced back from last year's outbreak of Severe Acute Respiratory Syndrome, which caused many travelers to avoid Asia and devastated the region's airline industry.

However, Mr. Chew warns that Singapore Airlines' earnings in the coming months could be hurt by competition from low-cost carriers and persistently high fuel prices.

"For every one U.S. dollar per barrel change in the price of jet fuel, for the six months left of the present financial year, the difference to our expenditure on fuel will be US $ 14 million."

China National Offshore Oil Corporation, China's leading offshore oil producer, has signed an oil exploration and production sharing agreement with Burma's state-owned company, Myanmar Oil and Gas Enterprise. The companies will hunt for oil in several areas off Burma's coast.