China's Ping An to 'Prudently' Consider Fund-Raising

China's Ping An Insurance will "prudently" consider the size and timing of its planned fund-raising after Beijing warned companies against big share sales, the Shanghai Securities News reported on Tuesday.

"Our company has noticed the comments made by the spokesman of the China Securities Regulatory Commission (CSRC) ... The company will prudently consider the timing and size of the fund raising as well as market situation," a Ping An spokesman was quoted by the official paper as saying.

The CSRC, in a fresh effort to prevent a stock market crash, warned companies late on Monday against making big issues of new shares that could push down the market.

"Refinancing by listed companies is a function of the capital market, and it is an important way for the market to allocate capital in the best way," Xinhua quoted a spokesman for the commission as saying. "But companies should on no account maliciously seize money from the market," the spokesman said.

Ping An has said it planned to issue 1.2 billion additional local-currency A shares and sell 41.2 billion yuan ($5.8 billion) in convertible bonds, but its has not specified why it needs to raise so much money or how it plans to use the proceeds.

Ping An officials were not immediately available for comment early on Tuesday.

The fund-raising plan, which is estimated to raise about 160 billion yuan, was a major factor behind the recent sharp falls in China's A share market over the past month.

The Shanghai Composite Index has plunged 24 percent since mid-January because of concern about the market's ability to absorb large supplies of new shares, including huge share offers planned by Ping An and Shanghai Pudong Development Bank.

Ping An has seen its A share price more than halved since late October when its stock peaked at 149.28 yuan. It closed at 65.38 yuan on Monday.

Ping An has said it would hold a shareholders' meeting scheduled for March 5 to vote on the plan. But many fund managers and analysts have said they expect shareholders to reject the plan.

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