China’s top brokerage CICC shares slump on 27b yuan rights issue plan
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SHARES in China International Capital (CICC) fell more than 9 per cent on Wednesday (Sep 14) after the country’s top brokerage announced a plan to raise up to 27 billion yuan (S$5.4 billion) via rights issue.
Its Hong Kong-listed shares were down 7.3 per cent in afternoon trade, having fallen as much as 9.5 per cent, while the broader market was down 2.3 per cent. Its Shanghai stock was down nearly 9 per cent.
The sell-off in CICC’s shares came after the brokerage said in an exchange filing late on Tuesday that it planned to issue up to 3 rights shares for every 10 of its existing shares.
CICC will use the capital to support business development and boost capital, the filing said.
The rights issue will dilute existing shareholders’ stakes, said Linus Yip, Hong Kong-based chief strategist at First Shanghai Securities
Chinese brokerages have been looking to bolster capital amid competition in the world’s second-largest market. CITIC Securities raised 28 billion yuan in a rights issue earlier this year. REUTERS
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