China's Stock Regulator Says Companies Should Gauge Market Before Making Share Sale Plans.
China's stock regulator has warned companies against "malicious money grabbing," urging them to take investor demand into account when drawing up plans for raising funds through share offerings.
The China Securities Regulatory Commission's statement, carried on the front pages of many newspapers Tuesday, came after share prices dropped to a seven-month low Monday amid mounting apprehension over a slew of new share offerings.
"Listed companies should consider market conditions, investor sentiment and their own funding needs before deciding the timing and size of refinancing," the commission said in a comment posted on its Web site. "Companies by no means should engage in malicious money grabbing in the market," it said. The benchmark Shanghai Composite Index gained 45.65 points, or 1.1 percent, Tuesday to 4,238.18, after falling 4.1 percent in the previous session.
The CSRC's statement was made in a question-and-answer "dialogue" between an unnamed journalist and an unnamed CSRC spokesman that referred to plans by Shanghai-traded Ping An Insurance, among other companies, for major share offerings.
Ping An's shares have fallen about 30 percent since it announced last month that it planned to raise funds through share and bond sales. The company has said it plans to raise up to $22 billion for acquisitions. The insurer's shares rose 4.1 percent Tuesday to 68.04 yuan ($9.54), after the state-run China Securities Journal reported the company would reconsider the timing and size of its fundraising plan.
The CSRC official said that Ping An's proposal was still in the planning stages and had not yet been presented to the commission. Such proposals would be "subject to strict examination, taking into account market conditions, their feasibility and their conformity with regulations and law," the official said.
On Monday, shares in mobile phone carrier China United Telecommunications, also known as China Unicom, fell by the daily limit of 10 percent amid speculation that the company also was planning a share offering. Although China Unicom issued a statement saying it has no new fundraising plans, its shares fell 4.2 percent Tuesday to 10.46 yuan ($1.47).
The CSRC's statement stressed that refinancing through share sales is a legitimate and reasonable strategy. But it said the agency would review such plans carefully. The stock watchdog also said it would crack down on insider trading, price manipulation, falsified disclosures and other abuses -- chronic problems that have also hurt market sentiment.
China's share markets have long struggled with imbalances between share supply and demand. Prices have faltered with some 400 billion yuan ($56 billion) worth of shares held by strategic investors and large shareholders due to become tradable in March, when a series of IPO- or share reform-related lockup periods expire.
The market's weakness already has prompted some companies to scale back on or postpone fund raising plans. Major contractor China Railway Construction cut the size of its initial public offering in Shanghai to 2.45 billion shares from the originally planned 2.8 billion shares.
China's stock regulator has warned companies against "malicious money grabbing," urging them to take investor demand into account when drawing up plans for raising funds through share offerings.
The China Securities Regulatory Commission's statement, carried on the front pages of many newspapers Tuesday, came after share prices dropped to a seven-month low Monday amid mounting apprehension over a slew of new share offerings.
"Listed companies should consider market conditions, investor sentiment and their own funding needs before deciding the timing and size of refinancing," the commission said in a comment posted on its Web site. "Companies by no means should engage in malicious money grabbing in the market," it said. The benchmark Shanghai Composite Index gained 45.65 points, or 1.1 percent, Tuesday to 4,238.18, after falling 4.1 percent in the previous session.
The CSRC's statement was made in a question-and-answer "dialogue" between an unnamed journalist and an unnamed CSRC spokesman that referred to plans by Shanghai-traded Ping An Insurance, among other companies, for major share offerings.
Ping An's shares have fallen about 30 percent since it announced last month that it planned to raise funds through share and bond sales. The company has said it plans to raise up to $22 billion for acquisitions. The insurer's shares rose 4.1 percent Tuesday to 68.04 yuan ($9.54), after the state-run China Securities Journal reported the company would reconsider the timing and size of its fundraising plan.
The CSRC official said that Ping An's proposal was still in the planning stages and had not yet been presented to the commission. Such proposals would be "subject to strict examination, taking into account market conditions, their feasibility and their conformity with regulations and law," the official said.
On Monday, shares in mobile phone carrier China United Telecommunications, also known as China Unicom, fell by the daily limit of 10 percent amid speculation that the company also was planning a share offering. Although China Unicom issued a statement saying it has no new fundraising plans, its shares fell 4.2 percent Tuesday to 10.46 yuan ($1.47).
The CSRC's statement stressed that refinancing through share sales is a legitimate and reasonable strategy. But it said the agency would review such plans carefully. The stock watchdog also said it would crack down on insider trading, price manipulation, falsified disclosures and other abuses -- chronic problems that have also hurt market sentiment.
China's share markets have long struggled with imbalances between share supply and demand. Prices have faltered with some 400 billion yuan ($56 billion) worth of shares held by strategic investors and large shareholders due to become tradable in March, when a series of IPO- or share reform-related lockup periods expire.
The market's weakness already has prompted some companies to scale back on or postpone fund raising plans. Major contractor China Railway Construction cut the size of its initial public offering in Shanghai to 2.45 billion shares from the originally planned 2.8 billion shares.
2 comments:
Very good post.
А! Che un bel post. Adoro leggere questi tipi o articoli. Posso? T aspettare di vedere ciò che altri hanno da dire.
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