…markets in China are in the spotlight after mainland regulators warned companies about offering new shares to investors. Our Asia Business Editor Eunice Yoon joins us now with more and Eunice uh, what prompted this warning?
Well, you know, last year the Shanghai Index tripled and after that big blus, blockbuster year, we see a lot of companies heading to the market to raise capital, uh but er, one of those companies is a company called Ping An Insurance, and Ping An Insurance says that, said last month that it's hoping to raise uh, 22 billion dollars in er, secondary placement, however there seems to have been a bit of a backlash against its plans as well as the plans of a lot of these other companies, a lot of people are concerned that there are as just uh, too much money or too many share placements coming to the market at the same time, and they are not sure that the market's gonna be able to absorb all of those secondary placements.
So, will these comments and regulators soothe investors, potential investors?
Well, the regulators have said that they are hoping that these companies will be able to more carefully consider their plans, their fundraising plans, to think more carefully about the amount, the timing, the affordability because they don't want to see all of this, all of these placements coming to the market, and of course in a good time, the, in the good times uh, you know a lot of these investors have actually welcomed these large listings, because they wanted to get a piece of them, but now that it looks like the markets are looking a bit more jittery, uh, they are shying away from these large listings. You're just concerned about the, uh, ability of the market to absorb these uh large listings, now one other thing that people have been saying is that even though it seems to be uh, having a boost in confidence a bit today, the markets are up by 2% today, uh, overall they are concerned that this gesture really won't be enough to soothe the people uh, for the long term, because there are just so many negatives out there, people there worried about uh, the possibility of a recession in the United States, the belt tightening or at least the tightening uh, campaign, that the uh, Chinese authorities have been on, and finally they are concerned about these credit curbs, and how those are gonna play out in the market as well.
Notes:
Blockbuster: A high-explosive bomb used for demolition purposes.Soothe: To calm or placate.Jittery: Having or feeling nervous unease.