Citic Securities Plunges 8% After Estimate Cut: Hong Kong Mover
“The Chinese regulator has put IPO issuances on hold since last October and this is having a prolonged impact on the brokers, and especially on their 2013 earnings,” Frances Feng and Arjan Van Veen wrote in a note, cutting their share price estimate to HK$14.50 from HK$16.50. “We expect Citic to see the biggest hit given the scale of its investment banking business.”
The China Securities Regulatory Commission is drafting new rules for share sales to beef up investor protection, and has rebuked or punished at least three brokerages for inadequate due diligence on IPOs. The country’s stocks entered a bear market June 24, plunging on concern a cash squeeze will hurt economic growth. China’s Shanghai Composite index declined today for the first time in four days.
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