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DBS Bank Annual Report 1998

Performance at a Glance

Financial Highlights

Letter to Shareholders

Corporate Governance

Operations Review

Financial Report



Operations Review

Capital Markets & Advisory

DBS Bank achieved several important milestones in Singapore's Capital Markets in 1998, including a first in asset-backed securities.


Above Left: Sembawang Utilities
    - the first Singapore project financing transaction
      for local infrastructure.

Left: NOL - the first asset securitisation transaction
       in Singapore.

During 1998, DBS Bank achieved several important milestones in Singapore's capital markets. We were joint lead manager of a US$1 billion exchangeable bond issue and won the International Financing Review's Asian Equity-Linked Issue of the Year award. The bonds which are exchangeable into ordinary shares in Singapore Telecommunications Ltd represented the largest convertible (or exchangeable) bond offering in Asia, excluding Japan.

The Bank also managed the first asset-backed securitisation transaction in Singapore by issuing S$185 million of mortgage-backed bonds cum redeemable preference shares. The bonds are secured by the flagship office building of Neptune Orient Lines Ltd. An innovative feature of the transaction is the opportunity for investors to realise a share of gains on the sale of the building.

We were also the co-lead manager of a S$300 million bond issue by the International Finance Corporation, the World Bank's private lending arm. This was the first Singapore dollar bond sale by a supranational body.

In the equity market, DBS Bank successfully launched covered warrants on Singapore Airlines Ltd and Keppel TatLee Bank Ltd shares. Compared to past issues, which were placed exclusively with institutional investors, both issues featured smaller minimum subscriptions and board-lot sizes, making them affordable to individual investors. In the case of the Singapore Airlines transaction, DBS was the first bank to distribute warrants to the public through ATMs.

DBS was the leading underwriter of initial public offerings (IPOs), lead-managing eight of the 20 companies listed on the Stock Exchange of Singapore (SES) during the course of 1998.

In the secondary market, DBS Bank lead-managed three of seven rights issues; for Nippecraft Ltd, ST Capital Ltd and DBS Bank. We arranged a S$400 million floating-rate note issue for ST Treasury Services Ltd and joint-managed the year's two largest share placements of NatSteel Electronics Ltd shares which raised S$255 million.

DBS also led in corporate advisory activities, advising on a number of mergers during the course of 1998 including: the take-overs of Pacific Century Regional Developments Ltd and CSA Holdings Ltd; the acquisition of Shenzhen Haixing Harbor Development Co. Ltd by China Everbright Pacific Ltd; the acquisition of Keppel Shipyard (Pte) Ltd by Hitachi Zosen Singapore Ltd; and the divestiture of Yaohan Best Electrical Pte Ltd by IMM Multi-Enterprise Ltd.

DBS' Capital Markets team received the Asian Equity-Linked Issue of the Year Award for our work on the Fullerton Global Corporation / Temasek Holdings exchangeable bond issue

Issues Lead-managed & Underwritten by DBS Bank in 1998

The Bank also assisted Acer Computer International Ltd in obtaining the first shareholders' mandate for share repurchase based on new SES guidelines.

One notable capital market transaction was the Bank's acquisition of the business undertaking of POSBank for S$1.6 billion, which strengthened our position as the largest bank in Southeast Asia with total assets exceeding S$90 billion.

In Hong Kong, DBS Asia Capital Ltd was lead or co-lead manager for three IPOs, including Computer and Technologies Holdings Ltd. We lead-managed the HK$300 million 'B' share issue of Dalian Refrigeration Company Ltd. DBS Asia Capital also advised Hong Kong-based corporate customers in 15 merger and acquisition transactions.

The Bank, together with DBS Capital Investments Ltd (DBSCI) continued to expand its direct investment activities in the region. DBSCI made investments totalling S$26 million in seven new companies and one follow-on fund. As at end-1998, DBSCI had 67 direct and indirect investments in a number of high-growth venture capital funds/management companies. Eighteen of the direct investee companies have now been publicly listed, including TSM Resources Ltd and Brilliant Manufacturing Ltd which were listed on the SES during the course of 1998.

Date of listing
TSM Resources Ltd
Hong Leong Asia Ltd
Hersing Realty Ltd
Brilliant Manufacturing Ltd
ASA Ceramic Ltd
PSL Holdings Ltd
Ultro Technologies Ltd
Spindex Industries Ltd
8 January
6 March
18 March
6 April
1 June
9 October
23 October
2 November


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