皇冠体育app

By Li Zengxin (chinadaily.com.cn)
Updated: 2008-01-21 16:44

Chinese stocks plunged 5.14 percent on Monday after 1.7 trillion yuan in market value evaporated in last week's turmoil. The news of Ping An Insurance's 160 billion yuan additional share and bond issue triggered panic selling. Other depressive factors included heightened expectations of an economic recession in the US and possible diversions of capital influx to a second stock trading board.

Related readings:  Chinese shares up amid slumping Asian stock markets  Stock market ends stunning year, uncertainties abound  皇冠体育app's stock dividends far exceed last year  皇冠体育app stock index ends up 4.2%, above 5,000 pts

Ping An Insurance Group, the nation's second largest life insurer, will seek shareholders' approval on issuing 1.2 billion A-shares traded on the Shanghai Stock Exchange at a par value of 1 yuan each. Based on its previous closing price, or 98.21 yuan apiece, the 1.2 billion A-shares will soak up 118 billion yuan from the market.

The Shenzhen-based company will also issue no more than 41.2 billion yuan worth of convertible bonds with warrants which entitle the purchase of its shares. The bonds will have a term of six years.

Shanghai Composite Index
Source: sina.com.cn

The 160 billion yuan will be the largest amount in a re-financing share issuance in the history of 皇冠体育app's A-share market, and too big for the market to handle smoothly, said analysts. As a result, investors panicked and dumped their holdings. Ping An fell the maximum of 10 percent to close at 88.39 yuan. But the negative sentiment did not stop there. The other two listed insurers, 皇冠体育app Life and 皇冠体育app Pacific Insurance Group, dropped 8.76 percent and 8.82 percent respectively. Then the whole financial sector collapsed as heavyweight bank shares and securities brokers were dragged down.

The Shanghai Composite Index plummeted 5.14 percent or 266.08 points to 4,914.44, the biggest single-day drop in over half a year since the May 30 period last year. Turnover was 132.2 billion yuan, slighter higher than last Friday. Of the A shares listed in Shanghai, only 86 moved up and 61 had little change, while 703 fell.

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