Friday May 9, 2008 MYT 1:22:52 PM
China's Ping An Insurance says holding off on Shanghai A-share issue to volatile markets
SHANGHAI, China (AP): China's second-largest insurer, Ping An Insurance, says it will not pursue a plan to issue new yuan-denominated shares on the Shanghai Stock Exchange for at least six months given current turbulent market conditions.
The company, which is seeking to raise billions of dollars to pay for acquisitions, issued the statement in a notice to the Hong Kong Stock Exchange late Thursday. Rumors that Ping An might go ahead and issue new "A shares'' in Shanghai rocked China's share markets earlier this week.
Ping An is one of many top-tier mainland Chinese companies with shares traded both in Hong Kong and Shanghai.
In January, it announced plans for massive fundraising plans through stock and bond issues, but that plan drew criticism given mounting investor worries over a potential glut of shares in the market.
A severe correction, which recently took the benchmark Shanghai Composite Index to about half the level of its all-time peak reached in mid-October, has meanwhile prompted the postponement of many share issue plans.
"Given the recent volatile capital market in China, the timing and condition for making the application for refinancing ... is not yet mature,'' Ping An's statement said.
"The company will take into account the market conditions and the acceptance level of the investors in considering the timing for the application and issue of A shares,'' it said, adding that the application would not be made for at least six months.
Ping An's business includes life, property and casualty insurance. The insurer says it had 583 billion yuan ($82 billion) in assets as of June 2007. The company also owns a bank.
Ping An's shares rose 1.2 percent to 70.35 Hong Kong dollars early Friday. The Shanghai Composite Index fell 0.9 percent in early trading, to 3,624.53.
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