China attracts raging bulls

ASIA is the world's boom continent. Economic growth is speeding ahead, led by the giant China. Stock markets are racing upward. The crisis of 1998, when currencies collapsed like ninepins and economic growth came to a shuddering halt, seems a long way away.

The stock market is truly intense. Shares in PICC Property & Casualty, a Chinese insurer, were 136 times subscribed when they floated in November. Aircraft maker AviChina was subscribed 155 times.

There are worries that a bubble is forming, but the underlying economies are growing strongly, interest rates are low and currencies tied to the sinking US dollar are boosting exports.

Alan Young, of the £1.3bn Alliance Trust, tells me it made more than 100% on some Chinese stocks last year.

For small investors, buying individual Asian stocks is risky. Better to find a fund manager with proven skills.

Aberdeen Asset Management's Hugh Young is one. In stark contrast to the group's ill-starred split capital funds, his Aberdeen New Dawn has been at the top of the performance tables for years. At 293 1/2p, it sells at 4% below asset value.

A more speculative venture is London Asia Capital , a grandiose name for a small, but interesting, company.

Originally Netvest, it was one more dotcom investor, but after the usual boom-to-bust - the shares went from 315p to 1 1/2p - it was taken over by Simon Littlewood, an accountant with a network of Asian contacts, and reborn as LAC. It has three offices in China, where it is led by Victor Ng. Its aim is to build a Chinese investment bank.

With £13m market value it has a long way to go. It has yet to get a licence, without which it cannot float companies in China.

What it does have is a string of stakes in small companies. Beijing Success is a share analysis software group that reported £1.2m net profits in the year to June 2003. It is hoped to float in Singapore this summer and LAC's half-stake could be worth 13p a share.

It is building up Biaoqui, a media and advertising business. It has attracted China Mobile as a partner in Biaoqui Century Data, which monitors pollution through a satellite phone system and which Littlewood sees becoming a major business.

To become an investment bank, LAC will need to raise more money. If the Asian bubble bursts, its floats could join a long queue. It could fall foul of the mysterious twists of Chinese politics.

But if it succeeds, it could become a bid target for a Western bank keen to go East. At 17 3/4p, the rewards could exceed the risks.

FOR many years the most exciting thing about Lawrence, the chemicals importing group, was the cat litter it sold.

But now there seems to be no stopping the shares, which have quadrupled to 404p, taking the market value above £100m.

The excitement is about Aivlosin, an antibiotic for pigs and hens made from fermented soya. It is a Japanese drug but Lawrence's 50%-owned Eco offshoot has 20-year rights to make and sell it.

The market is huge. Tylosin, the present leader, has £160m sales.

Lawrence hopes to win EU approval for Aivlosin this year, with the US following in 2005.

Profit margins are high and Aivlosin already has 70% of the market in Japan.

David Pannell, at broker Durlacher, can see Lawrence shares reaching £5 or £7.

But hang on. Aivlosin has not arrived yet. Regulators are notoriously prone to delay in clearing new medicines. Rivals will hardly stand still.

This is not for widows and orphans. But the bulls have the bit between their teeth, suggesting there is still upside.