Analysts are looking for the three listings debuting this week to possibly double in price, based on prices quoted in the unofficial `gray market' on Wednesday.

Timeless Software Ltd and China Agrotech Holdings Ltd begin trading on Thursday and Pine Technology Holdings Ltd, a maker of computer modems and portable MP3 audio players, will launch on Friday.

``Certainly looking at some of the grey market prices suggests that they already achieved a 100 percent increase at least,'' said Michael Bugel, head of Hong Kong and China product research at Jardine Fleming.

Small issues, big interest
The issue sizes are relatively small and attracted strong institutional and retail interest, putting upward pressure on the shares.

Wharf (Holdings) Ltd spinoff I-Cable Communications Ltd, saw its share price rise 52 percent in its main board debut on Wednesday to HK$15.75 from an initial offer price of HK$10.39. It trades on Nasdaq later on Wednesday. Among the GEM listings, Timeless Software sold 150 million shares at HK$3.00 each, China Agrotech sold 75 million shares at HK$1.20 each and Pine Technology sold 165 million shares at HK1.50 each.

"It will be a successful launch tomorrow, but the questions till remains whether the small high growth companies will be focused on GEM or are they going to Nasdaq," Bugel added.

Lock-up a deterrent
A major deterrent in the GEM listing rules is a lock-up provision that prohibits top management shareholders of listing candidates from selling any shares for two years following the initial offering.

Non-management investors with over five percent of the company's shares must keep their shares for six months. Nasdaq, which GEM hopes to emulate, does not have such restrictions, leaving it up to underwriters to determine lock up agreements on a listing-by-listing basis.

The restrictions may cause I-Quest Corp, which provides high-speed Internet access to Asian hotel rooms and runs a travel web portal, to bypass GEM in favour of Nasdaq when it comes time to list in mid-2000.

``If the two-year lock-up period is not relaxed, the best companies, the most exciting companies, will choose the board that's least restrictive,'' said I-Quest Chief executive Anthony Blass.

``The investors that the Securities and Futures Commission is seeking to protect won't get the opportunity to invest in these companies. They'll be trading in Singapore, Japan or New York.''

Blass said the lock up would put his firm at a disadvantage when competing for talented executives with rivals that could offer share options with no restrictions.

Nonetheless, he said he believes GEM will be ultimately be successful, with valuations that equal those of Nasdaq.

Local Exposure
TS Telecom Technology, which debuts on GEM on December 2, said it overlooked the lock-up restrictions because GEM offered the telecom cable and equipment monitoring firm better exposure to investors.

``Our operations are mainly in south-east Asia and it is our belief that it's better for us in terms of raising capital now and in the future to have a listing status in Asia,'' said Randy Hung, TS Telecom's executive director and Chief Financial officer. Analysts said they expected continued pressure on the Stock Exchange of Hong Kong to relax the GEM listing rules, particularly if the board loses key listings to Nasdaq.

The exchange has no immediate plans to revisit the lock-up issue, but will review listing rules from time to time to consider market feedback and review market integrity, said spokeswoman Lorraine Chan. ``We will need to strike a balance between the attractiveness of the market and investor protection,'' Chan said. ``The GEM companies will be new start up companies. We believe that continuous participation by management and significant shareholders will be very important to these companies.''