Learning from Malaysian listings

Learning from Malaysian listings

Chinese companies struggle to raise their profiles as investors are wary of unfamiliar names

When Xingquan International Sports Holdings sought a listing on Bursa Malaysia, the Malaysian stock exchange, it was welcomed with open arms.

The 2009 initial public offering (IPO) of China’s fifth largest outdoor sportswear manufacturer marked the first by a foreign-owned company after a concerted 16-month effort by the Securities Commission and the stock exchange to internationalize the Malaysian capital market.

The Fujian-based company’s July debut was followed closely by Multi Sports Holdings, a shoe sole specialist that designs, develops and manufactures shoe soles, which listed in August. Three months later, sports shoe and sportswear manufacturer XiDeLang Holdings made its IPO.

Hopes were high that the arrival of these Chinese companies would improve the efficiency of the Malaysian capital market, add depth and breadth to the exchange, and pave the way for local investors to access stocks from the world’s most dynamic economy. Bursa Malaysia, a latecomer to the game, would finally catch up with the likes of Singapore, New York and London in courting cross-border listings from the economic superpower.

In a win-win situation, Chinese companies were accessing funds much faster than on home ground, where a massive backlog could delay listing aspirations for up to five years and intensify competition for investment dollars.

Xingquan International tells China Daily Asia Weekly they had decided on a Bursa Malaysia listing because of encouraging support from the authorities, and local financial institutions and funds.

“We explored several options back in 2008 and found the Malaysian market to be most suitable for us with strong attention at that point in time,” says Wu Qingquan, the executive chairman and CEO.

But the rosy picture has not panned out as planned.

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