Innovative Plan to Form New Shares to Become Blueprint of Major Market Listing
An innovative plan was created that will form new shares debuted on the Shenzhen Stock Exchange which could become the blueprint of a more major market listing in the coming months. Shares from the China Merchants Shekou Industrial Zone Holding Co. came into being as the company merged with China Merchants Property Development Co. in a deal that combines dollar dominated shares with yuan denominated assets.
Officials said that the plan is an option that is appealing for enterprises that wishes to combine local and overseas assets and listing in the future. Shenzhen Stock Exchange said the listing is an innovative plan, which completes China’s capital market. China Merchants Group is one of the biggest State owned corporations that consolidates both Chinese and overseas assets which spreads across various real estate development arms that dominates the yuan and dollar. As of now China Merchants Shekou is the biggest company listed in Shenzhen based on market value. The company issued new shares that will finance the takeover of China Merchants Property and all of its assets and liabilities, and the same time China Merchants Property dollar denominated shares are delisted and an employee stock ownership plan will be released.
During the first day of trading in Shenzhen, China Merchants Shekou shares lost around 8.38 percent in which analysts said that it was expected due to the large cap company. The IPO price was at 25.3 yuan per share, but trading opened at 5.53 percent lower, which is at 23.9 yuan and slumped at 14.98 percent until the trading was suspended. Price closed at 23.18 yuan and 27.11 percent of available stock has changed hands. China Merchants Shekou released an after trading statement, which stated that China Merchants Group increased its holdings in the new stock by spending 2.535 billion yuan for 111.5 million shares. Based on a research done by the China Investment Securities Co. these large cap companies are likely to see and experience fluctuation prices.