(Yicai Global) Dec. 10 -- Chongqing Rural Commercial Bank, China's first bank whose stock has dived below its initial public offering price this year, has called on its directors and senior managers to raise their holdings in the bank in the next half year, the lender said in the share price stabilizing plan it released yesterday.
Chongqing Rural's shares [SHA:601077] languished under its net asset price CNY7.18 (USD1.02) per share for 20 straight trading days from Nov. 12 to yesterday, which activated a regulatory rule allowing the bank to take steps to prop it up, the bank announced yesterday, saying it has therefore required 12 directors and senior managers to raise their stakes in the bank using their own funds to up to 15 percent of their after-tax salaries last year.
It thus joins the ranks of nine other Chinese banks that have announced such stock buttressing schemes this year, albeit for other reasons.
Bank stocks sagging below their net asset price are typically casualties of a sluggish market, sector insiders said. China's A-share market has embarked on a long adjustment after rapid growth earlier this year, and the Shanghai Stock Exchange Composite Index has been hovering between 2,800 points and 3,000 points since May. It had dipped 0.3 percent to 2,905.61 points as of 10.00 a.m. today.
The bank listed on the domestically-traded A-share market on Oct. 29, but its stock dropped lower than its IPO price of CNY7.36 per share on the 10th trading day. It thus became this year's first banking share to decline below its IPO price, but its stock kept sliding thereafter. It also slipped after opening today, notwithstanding the plan, dropping a further 1.05 percent to CNY6.57 at the lunch bell.
Bank of Zhengzhou, Wuxi Rural Commercial Bank, Bank of Chengdu, Bank of Changsha, Bank of Shanghai, Bank of Guiyang, Jiangsu Suzhou Rural Commercial Bank, Jiangyin Rural Commercial Bank, and Bank of Hangzhou have also released their stock stabilizing programs, Yicai Global has found from a study of incomplete data, but most of their shares remain under their net asset price per share even after they heralded their schemes.
Editors: Dou Shicong, Ben Armour