Author: Tan KW | Publish date: Thu, 5 May 2016, 01:31 PM
This article first appeared in The Edge Financial Daily, on May 5, 2016.
KUALA LUMPUR: Investor confidence in China-based companies listed on Bursa Malaysia appears to have sunk even lower after two of the companies received a “possible suspension” warning from the exchange.
The two companies, Maxwell International Holdings Bhd and Multi Sports Holdings Ltd, saw their share prices drop to an all-time low as investors ditched their shares.
Maxwell fell 1 sen or 28.57% to a low of 2 sen, before recovering to close at 2.5 sen yesterday.
Multi Sports, which fell to an historic low of 3 sen on Tuesday, managed to recover 0.5 sen or 16.67% yesterday to close at 3.5 sen.
On Tuesday, Bursa Malaysia warned sports shoe manufacturer Maxwell and sports shoe sole maker Multi Sports that if they fail to submit their annual reports for the year ended Dec 31, 2015, by May 9, their share trades will be suspended the following day.
The latest warning is another blow to loss-making Maxwell, which is trying to resolve problems related to its advertising expenditure audit for the third quarter ended Sept 30, 2015.
Multi Sports, meanwhile, reported a net loss of RM9.79 million for its third quarter ended Sept 30, 2015, after posting a net loss of RM6.09 million in the second quarter.
The warning issued to the two companies triggered a selldown of shares in the other China-based companies.
Xingquan International Sports Holdings Ltd dropped 0.5 sen or 1.69% yesterday to close at 29 sen and China Automobile Parts Holdings Ltd also fell 0.5 sen or 7.69% to 6 sen.
Similarly, K-Star Sports Ltd has been trading at its all-time low since March 24, closing at 4.5 sen yesterday, down 0.5 sen or a 10% drop from Tuesday.
It is worth noting that the 10 China-based companies listed on Bursa Malaysia are trading below 10 sen, a stark difference compared with their initial public offering (IPO) price of between 54 sen and RM2.15.
Alliance Investment Bank remisier Raymond Foo said the companies were delaying their financial statements, facing problems with their accounts, or having fallen into Practice Note 17 status.
“Because of this, the investors have lost confidence in these companies. I think it is quite risky now to continue to hold on to these stocks,” he told The Edge Financial Daily.
Foo said the share prices of all these companies had fallen below their IPO prices for sometime now.
He said he would not be surprised if some of these companies were delisted after failing to resolve their problems.
http://www.theedgemarkets.com/my/article/confidence-china-based-firms-sinks-further
KUALA LUMPUR: Investor confidence in China-based companies listed on Bursa Malaysia appears to have sunk even lower after two of the companies received a “possible suspension” warning from the exchange.
The two companies, Maxwell International Holdings Bhd and Multi Sports Holdings Ltd, saw their share prices drop to an all-time low as investors ditched their shares.
Maxwell fell 1 sen or 28.57% to a low of 2 sen, before recovering to close at 2.5 sen yesterday.
Multi Sports, which fell to an historic low of 3 sen on Tuesday, managed to recover 0.5 sen or 16.67% yesterday to close at 3.5 sen.
On Tuesday, Bursa Malaysia warned sports shoe manufacturer Maxwell and sports shoe sole maker Multi Sports that if they fail to submit their annual reports for the year ended Dec 31, 2015, by May 9, their share trades will be suspended the following day.
The latest warning is another blow to loss-making Maxwell, which is trying to resolve problems related to its advertising expenditure audit for the third quarter ended Sept 30, 2015.
Multi Sports, meanwhile, reported a net loss of RM9.79 million for its third quarter ended Sept 30, 2015, after posting a net loss of RM6.09 million in the second quarter.
The warning issued to the two companies triggered a selldown of shares in the other China-based companies.
Xingquan International Sports Holdings Ltd dropped 0.5 sen or 1.69% yesterday to close at 29 sen and China Automobile Parts Holdings Ltd also fell 0.5 sen or 7.69% to 6 sen.
Similarly, K-Star Sports Ltd has been trading at its all-time low since March 24, closing at 4.5 sen yesterday, down 0.5 sen or a 10% drop from Tuesday.
It is worth noting that the 10 China-based companies listed on Bursa Malaysia are trading below 10 sen, a stark difference compared with their initial public offering (IPO) price of between 54 sen and RM2.15.
Alliance Investment Bank remisier Raymond Foo said the companies were delaying their financial statements, facing problems with their accounts, or having fallen into Practice Note 17 status.
“Because of this, the investors have lost confidence in these companies. I think it is quite risky now to continue to hold on to these stocks,” he told The Edge Financial Daily.
Foo said the share prices of all these companies had fallen below their IPO prices for sometime now.
He said he would not be surprised if some of these companies were delisted after failing to resolve their problems.
http://www.theedgemarkets.com/my/article/confidence-china-based-firms-sinks-further
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