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Pudong Bank board meets on share sale
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Shanghai Pudong Development Bank yesterday held a board meeting to discuss its refinancing plan, with details due to be announced today.

Analysts expect the bank to cut its original plan to sell up to one billion new shares.

Shares of the bank rose 3.82 percent to 40.49 yuan (US$5.70) yesterday in Shanghai after the securities watchdog said it would "scrutinize" such plans. The benchmark Shanghai Composite Index increased 1.09 percent to 4,238.18.

It's the first rise for Pudong Bank in five trading days since it announced plans for an additional share sale. Its shares have lost 21 percent since last Wednesday, when its plans came to light, while the index tumbled 9.1 percent in the period.

The Shanghai-based bank held the board meeting to discuss the deal yesterday afternoon but a spokesman for the bank declined to comment further until today's official announcement.

The future supply of shares amid the current jittery market has further weakened investors' confidence, who have rushed to sell in fear of further depreciation.

Ping An Insurance (Group) Co was the first to spark the market drop with a mammoth share-sale plan.

The Shenzhen-based insurer is scheduled to hold a shareholders' meeting on March 5 to vote on the issuance of up to 1.2 billion new yuan-backed A shares, or 14 percent of its expanded capital, plus 41.2 billion yuan of six-year convertible bonds with detachable warrants.

The country's second biggest insurer said, "We will consider how much the market's able to absorb in deciding the timing and size of our share sale plan."

"Ping An will follow the existing rules and regulations in this area," its spokesman said yesterday.

Ping An shares gained 4.04 percent to 68.04 yuan in trading yesterday. Its shares have decreased 31 percent since it announced the sales plan. The broader market shed 18 percent in the period.

(Shanghai Daily, February 27, 2008)

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