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Sina.com Intrigues Readers; Malaysia Remains Unpromising

Mailbox spring-cleaning reveals strong interest in the Chinese-language portal.

Even though summer unofficially began this weekend, it's never too late for a little spring cleaning of the Global Portfolio mailbox.

My

column on Chinese-language portal

Sina.com

(SINA) - Get Free Report

generated a lot of interest among readers. Although I was pretty positive on the company's prospects, some thought I missed a few points.

Reader

Wenhui Cao

, for example, notes that the offering was a relatively small float of 4 million shares. To offer a comparison, that's less than a quarter of the 16.8 million float of fellow China Internet play

chinadotcom

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. Fewer shares translate into a greater potential increase in the stock price should interest in the company grow, especially among institutional investors. It also means investors wanting to get out may have to accept a lower price.

Cao also points out the projected growth of mobile phone customers in China to 100 million in 2003 and 200 million in 2010, which makes last week's deal between Sina and three Chinese telecommunications companies --

China Telecom

(CHL) - Get Free Report

,

China Mobile Communications

and

China Unicom

(which will go public next month) -- to provide Internet content via wireless all the more intriguing. "Believe me, chinadotcom will never land this kind of deal in China," writes Cao.

Another reader,

Dan

, ponders the possibilities should Sina list separately in Hong Kong. That development, he argues, "should drive the price up based solely on new demand from the Chinese investing public, who do, after all, know this company the best," he wrote. Perhaps, but no such deal is in the works, says Daniel Mao, chief operating officer at Sina. "We're focused 100% on the

Nasdaq

listing," he says, although a separate listing remains an option.

On a more negative note, however, a reader named

David

pointed out that the U.S.-listed Sina technically does not own the Chinese company that runs the Web site, sina.com.cn, which, as I noted in the column is the No. 1 portal in China. That's a problem because it is ostensibly one of the company's most attractive assets. Instead, the Chinese site is part of a separate Chinese company that is owned by

Zhidong Wang

, the president and CEO of Sina. This confusing setup was arranged "to address Chinese regulatory concerns," as the prospectus puts it, of foreign ownership of the Internet. In fact, Sina will be able to own 50% of the Chinese company after China joins the

World Trade Organization

.

(The nationality of Sina is not easy to pin down: The company's headquarters are in Hong Kong, it is registered in the Cayman Islands, its management is a mixture of Chinese and Chinese-Americans and it has an office in Silicon Valley and deep connections there. Nonetheless, it did need Chinese approval to continue operating in the country following its Nasdaq listing.)

However, according to COO Mao, Sina is allowed to consolidate financials and include "substantially" all revenue from the Chinese site in its total revenue. "It's not a perfect situation," Mao told

TSC

, "but it's the best we can do at the moment."

Whatever your take on the company, one thing is certain: It's taken a beating in the last week. The stock enjoyed a strong rally prior to last week's vote in the

House of Representatives

granting China normal trade status, which will lead, presumably, to the nation's entry into the WTO and an explosion of trade and foreign investment in the country. It closed at 30 1/4 after reaching an all-time high of 58 on May 23.

Elsewhere in Asia, my

comments regarding Malaysian Prime Minister

Mahatir Mohammed

continue to grate on some readers. "If you have some grudge against Mahathir, that's fine," one wrote, "but save it for a political column."

I plead guilty to having a grudge against megalomaniacal anti-Semites who rule with an iron hand. But no matter. I bring this up because for investors, the country offers little these days. Last fall, investors could get in on a rally triggered by the reweighting of Malaysia in three key indices by

Morgan Stanley Capital International

. That has now occurred, and, thus, no more momentum. With no Malaysian ADRs, U.S. investors are limited to the

MSCI I-Shares Malaysia

(EWM) - Get Free Report

, formerly WEBS Malaysia, down 16% since a peak early this year, and the closed-end

Malaysia Fund

(MF)

, which has fallen 32% since its peak. There are other, more interesting countries with more investment opportunities in the region. To quote

Michael Corleone

: "It's not personal, Sonny, it's strictly business."

Keep reading -- and writing. I have a feeling it's going to be a long summer of volatility in markets around the world. To try to make sense of it all, I encourage you to send me any questions you might have about international investing; likewise, if you simply want to spout off about something I've written, feel free.

David Kurapka's Global Portfolio column appears Wednesdays and Fridays on TSC. In keeping with TSC's editorial policy, he does not own shares in any companies or mutual funds mentioned in this column. He also doesn't invest in hedge funds or other private investment partnerships. He welcomes your feedback at

dkurapka@thestreet.com.