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China's top brokerage CICC shares slump on $3.9 bln rights issue plan

China's top brokerage CICC shares slump on $3.9 bln rights issue plan

Reuters · 09/14/2022 03:35
China's top brokerage CICC shares slump on $3.9 bln rights issue plan

- Shares in China International Capital Corp Ltd (CICC) 3908.HK, 601995.SS fell more than 9% on Wednesday after the country's top brokerage announced a plan to raise up to 27 billion yuan ($3.88 billion) via rights issue.

Its Hong Kong-listed shares were down 7.3% in afternoon trade, having fallen as much as 9.5%, while the broader market .HSI was down 2.3%. Its Shanghai stock was down 9%.

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 three 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 Ltd.

Chinese brokerages have been looking to bolster capital amid competition in the world's second-largest market. CITIC Securities Co Ltd 6030.HK raised 28 billion yuan in a rights issue earlier this year.

($1 = 6.9642 Chinese yuan renminbi)


(Reporting by Jason Xue, Ziyi Tang and Ryan Woo; editing by Sumeet Chatterjee and Jason Neely)

((Ziyi.Tang@thomsonreuters.com;))