apple

 
 

China-based companies in hot soup?

PETALING JAYA: Shareholders are recommended to be particularly vigilant, prudent and diligent when investing in China-based companies listed on Bursa Malaysia given their propensity to “get into trouble”, according to the Minority Shareholders Watch Group (MSWG).

Just over a week ago, the Securities Commission Malaysia (SC) reprimanded China-based China Stationery Ltd, Xingquan International Sports Holdings Ltd and Maxwell International Holdings Bhd for various breaches of securities laws. The SC also said that the retention of office by four of the directors in these companies are prejudicial to public interest.

MSWG CEO Devanesan Evanson said many of the other China-based companies listed here have financial and accounting irregularities and do not perform well. Interestingly, China-based companies in Singapore also had a string of problems, just like in Malaysia.

“Some of the reasons for the problems in China-based companies are because these companies are often incorporated outside Malaysia and as such different laws apply. Many of their directors are foreign nationals and locating them or holding them accountable may be a challenge. Much of their business is based and located outside Malaysia and as such the existence, scale and veracity of their operations may be questionable. These give rise to conflicts of laws and business practices and jurisdictional issues,” he told SunBiz.

Out of the 12 China-based companies listed on Bursa Malaysia, four are PN17 companies. All of them are trading below the initial public offering prices.

“We advise minority shareholders to err on the side of caution, after all there are more than 900 companies listed on Bursa Malaysia. At the end of the day it is up to the risk appetite of minority shareholders. Minority shareholders should rely more on fundamental analysis and look out for key financial indicators when making their investment decisions,” said Evanson, adding that MSWG has included the China-based companies under the list of companies that it monitors.

However, he said one should not stereotype any set of companies or paint them with a broad brush. Every company should be evaluated on its merits.

“Just like in any country, there are good China-based companies and ‘not so good’ China-based companies. Given the experience with China-based companies in Malaysia, even regulators are exercising greater diligence prior to allowing these companies to list on Bursa Malaysia. There has not been any such listings in the past few years,” he observed.

He said it is timely that the SC acted on these listed companies as the offences are serious and impacts minority shareholders and the stock market’s integrity.

“The SC’s action acts as a warning that action will be taken on capital market offences and we hope that the SC (and Bursa Malaysia) will be more severe with the sanctions to send a strong message that capital market integrity and investor protection are paramount,” said Evanson.

Meanwhile, Associated Chinese Chambers of Commerce and Industry of Malaysia president Tan Sri Ter Leong Yap said one should not shun China-based companies just because of a few bad apples.

“These are individual cases. You cannot (have a blanket judgement) because of one or two cases like this and you think that Chinese companies are not good. There are lots of good Chinese companies worldwide, such as Tencent and Alibaba. Those are large ones, but even the small and medium companies from China are good,” Ter said.

He added that when Bursa Malaysia is able to attract Chinese companies to come into the country, and get them listed on the local bourse, that would make the Malaysian capital market more lively.

“We shouldn’t judge just because of two or three (offenders). China is the second largest economy in the world and there are lots of solid companies in China,” said Ter.


Rebound in job growth pushes Wall St higher, trade hopes add to optimism

NEW YORK, April 5 — Wall Street’s main indexes rose today after data showed US employment in March accelerated from a 17-month low, easing concerns of a domestic slowdown, while hopes of a US-China trade deal added to the sentiment. The Labor…


France sticks to digital tax despite US anger

BUCHAREST, April 5 — Finance Minister Bruno Le Maire said today that France would stick to plans for a tax on digital giants such as Facebook and Apple, despite displeasure in Washington. “We are determined to implement a tax on the largest…


Samsung Electronics flags 60pc fall in Q1 operating profit

SEOUL, April 5 — The world’s biggest smartphone and memory chip maker Samsung Electronics warned of a 60 per cent-plus fall in first-quarter operating profits today, in the face of a weakening chip market. Operating profits for January to March…


Austria proposes taxing internet giants 5pc of ad revenue

VIENNA, April 3 — Austria today proposed taxing internet giants such as Google and Facebook five per cent of their digital advertising revenue, a higher rate than France and other EU countries are seeking. Austrian Chancellor Sebastian Kurz said…


Apple, luxury brands drop prices in China on VAT cut

BEIJING, April 3 — Apple and luxury labels such as Gucci have lowered their prices in China after a cut in its value-added tax (VAT) rate came into effect from April 1. Beijing said last month that it would cut taxes and fees for all companies by…


EU hits Britain over illegal tax break to multinationals

BRUSSELS, April 2 — The EU’s powerful anti-trust authority today said a tax break from Britain for unnamed multinationals was illegal under state aid rules, firing a shot at London amid Brexit chaos. The European Commission gave no indication of…


Saudi Aramco world’s most profitable company in 2018

DUBAI, April 1 — Oil giant Saudi Aramco revealed today it made the world’s biggest corporate profit last year, opening its secretive accounts for the first time as it prepares to raise funds from investors. International ratings agencies Fitch…


Brexit fears for British shop owners in Germany

BERLIN, March 31 — As the United Kingdom grapples with its Brexit drama, the uncertainty around its decision to leave the EU persuaded Dale Carr to close down her Berlin shop selling British goods. The 67-year-old from Sheffield and her husband…


Foxconn posts fall in Q4 profit, beating estimates

TAIPEI, March 29  —Taiwanese manufacturer Foxconn reported a smaller than expected fall in quarterly profit, despite warning signs from key customers including Apple Inc that demand for tech electronics is softening. Foxconn, formally known…