China Merchants Property to scrap share sale plans

SHANGHAI: China Merchants Property Development Co said on Thursday, May 13, it would scrap its four billion yuan (RM1.87 billion) share placement plan due to a slump in its stock price triggered by government tightening.

The mid-sized property developer is the latest casualty of weakening stock markets in the region, with Swire Properties pulling its US$2.7 billion initial public offering in Hong Kong and China's New Century Shipbuilding withdrawing its Singapore IPO this month.

Last August, China Merchants unveiled plans to sell up to 200 million shares at no less than 28.12 yuan apiece to select institutional investors, and later revised down the price target to 20.6 yuan to accommodate falling share prices.

But a continuous price slump forced the company to give up its share placement scheme, China Merchants Property said in a statement to the Shenzhen Stock Exchange.

The stock has tumbled by more than half since the announcement of the share placement plan, closing on Wednesday, May 12, at 16.32 yuan, hit by government policies to cool the red-hot real estate sector.

China has curbed property lending, raised mortgage rates and stepped up efforts against land hoarding this year to rein in a surge in home prices that stoked worries about asset price bubbles. -- Reuters