Business

Saturday September 5, 2009

Quek’s stake cut in Multi Sports raises concern

By IZWAN IDRIS


PETALING JAYA: Is tycoon Tan Sri Quek Leng Chan and his family walking out on Multi Sports Holdings Ltd right after the Chinese shoe-sole maker got listed on Bursa Malaysia?

The latest stock exchange filings showed GuoLine Group Management Co Ltd, a Bermuda-registered company linked to the tycoon, had cut its stake in Multi Sports from a high of 14.9%, or 54 million shares, on Aug 19, to 8.5%, or 30.8 million shares, as at Aug 28.

“It does raise a lot of questions when a major shareholder starts dumping shares right after the company got listed,’’ a fund manager remarked.

Multi Sports’ officials, based in Fujian in China, were not immediately available for comment.

At its closing price of 56.5 sen yesterday, shares in Multi Sports had tumbled 34% against its initial public offering (IPO) price of 85 sen.

The counter was the second-most active stock on Bursa Malaysia yesterday with 22 million shares changing hands.

Multi Sports was the second Chinese company to be listed on Bursa Malaysia this year, following in the footsteps of shoemaker Xingquan International Sports Holdings Ltd, which was listed on July 10.

Shares in Xingquan closed 1 sen lower at RM1.36 yesterday.

The stock had fallen 20% from its IPO price of RM1.71.

“It is not good for the retail investors and the industry,’’ Malaysian Investors Association (MIA) president Datuk P.H.S. Lim said, describing the performance of the two Chinese companies as “failures”.

Analysts said there were no clear cut answers why these companies failed. It must be noted that both the IPOs of Xingquan and Multi Sports were well received by the market, with their shares oversubscribed prior to listing.

MIA’s Lim reckoned that the two companies were haunted by issues of perception and a lack of confidence in Bursa Malaysia-listed Chinese companies.

Bursa Malaysia-listed Chinese firms also had to compete with Chinese companies listed in Singapore, where they had the advantage of a longer track record, he said.

It should also be noted that the recent sharp declines in the mainland China bourses of Shanghai and Shenzhen have brought down valuations of Chinese stocks.

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