China Vanke plans $1.6b new share offering in weak market

China Vanke, the country's No. 2 property developer, plans to raise up to $1.6 billion via a new share offering amid a property revival, though the issue is likely to dent a wobbly stock market.

A rebound in real estate prices has bolstered developers' earnings and spurred them to raise funds for new projects.

Worries about new share issues have weighed heavily on the stock market following a two-week, 20-percent slide earlier this month.

China's benchmark stock index initially slipped yesterday following Vanke's news, but later moved back into positive territory.

“The Vanke plan has investors worried about more possible fund raising, and the pace of IPOs isn't letting up, so confidence is waning in the short term,” said analyst Wu Nan from Xiangcai Securities.

Two big IPOs were approved this month: a 6.4 billion yuan ($936.77 million) offer by China CNR and a 16.85 billion yuan IPO by Metallurgical Group of China. China State Construction Engineering Corp raised $7.3 billion last month, making it China's biggest listed developer.

Reuters
 

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