Second China company debuts on Malaysian bourse

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 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 July 10, was at RM1.43 at noon Wednesday, down 16 percent 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," Eng said.

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

The government scrapped the equity requirement recently as part of a liberalization 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 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 it expected to raise RM58 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.

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