Published August 20, 2009

Second China firm debuts on KL bourse

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(KUALA LUMPUR) China-based shoe sole maker Multi Sports Holdings Ltd began trading yesterday on Malaysia's stock exchange, becoming the second foreign company to list here.

It was a shot in the arm for the Malaysian bourse, which recently simplified and sped up procedures to attract more foreign listings and give its market more depth amid the global credit crunch.

Multi Sports hit a high of RM0.89 shortly after debuting on the main board of Bursa Malaysia, up from its initial public offering price of RM0.85. However, it slid to RM0.815 at noon in an overall sluggish market.

Chris Eng, analyst with OSK Securities, said that investors are expected to be cautious with the two foreign stocks as the companies are fairly small and in the competitive area of shoe manufacturing.

Stock of China's sportswear company Xingquan International Sports Holdings Ltd, which began trading on July 10, was at RM1.43 at noon yesterday, down 16 per cent from its IPO price of RM1.71.

'The appetite for good quality foreign IPO is huge, but people tend to be cautious of generally small foreign companies,' Mr Eng said.



Malaysia's stock market has been eclipsed by neighbouring Singapore, which has more than 100 foreign listings, partly due to affirmative action policies under which listed businesses had to allot 30 per cent of their shares to ethnic Malay Muslims.

The government scrapped the equity requirement recently as part of a liberalisation of financial services to woo foreign investors.

Authorities also waived listing fees and gave fast-tracked approvals to Xingquan and Multi Sports.

Multi Sports chief executive Lin Hou Zhi said that the company chose to be listed in Malaysia because it was less affected by the global financial crisis compared to other nations.

The company has said that it expected to raise RM58 million (S$23.7 million) from its share sale and would use part of the proceeds to build a second factory in China to triple its production capacity to 74.6 million pairs of soles a year.

Based in the south-eastern city of Jinjiang in the Fujian province, Multi Sports posted a net profit of RM46.8 million last year. -- AP