ASEAN KEY DESTINATIONS
Are Malaysian investors wary of China stocks?
Shares in Sozo, an export-driven one-stop gourmet convenient food specialist from Shandong Province in China, opened at 79.5 sen yesterday against its IPO price of 80 sen. However, it closed unchanged at 80 sen and was the most active counter with 43 million shares traded. Of the China companies that are currently listed on Bursa, only China Ouhua Winery Holdings Ltd, which made its debut last month, is trading above its IPO price.
The others Xingquan International Sports Holdings Ltd, K-Star Sports Ltd, Multi Sports Holdings Ltd and XiDeLang Holdings Ltd, all involved in the shoe business, are trading below their issue prices.
Institutional investors are said to be skeptical of taking up shares in China companies following accounting irregularities involving several China-based companies listed in Singapore.
In Sozo's case, some investors may take comfort in the fact that Khazanah Nasional Bhd was a pre-IPO investor.
Xingquan has institutional funds like the Employees Provident Fund and Kumpulan Wang Persaraan. It was reported that China Ouhua has attracted Great Eastern to take up its shares under a private placement.
Commenting on the issue, OSK Investment Bank Bhd director and equity capital markets head Gan Kim Khoon said, "I won't necessarily conclude that investor sentiment towards Chinese IPOs has eased based on just this one example (Sozo)."
After all, he said, it was only about a month earlier that the market saw a strong debut by China Ouhua and it is trading at a 20 percent premium over its IPO price.
There are a few more China companies waiting to be listed on Bursa. However, Maxwell International Holdings Bhd, which aims to launch its prospectus on October 28 and for a listing in mid-November, has been quiet since its October 14 underwriting exercise.
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