Merchants Bank rights offer

China Merchants Bank plans rights issue

The pipeline of financial sector deals continues to grow as China Merchants Bank announces plans to raise $5.4 billion from a rights issue.
<div style="text-align:right; font-size:7pt; color:rgb(119, 119, 119);">
Photo: ImagineChina</div>
<div style="text-align:right; font-size:7pt; color:rgb(119, 119, 119);"> Photo: ImagineChina</div>

China Merchants Bank CMB plans to raise up to Rmb35 billion $5.4 billion from a rights issue of A- and H-shares as it tries to boost its reserves to meet new capital adequacy requirements. The rights issue will hit the market in September at the earliest, according to a statement the bank made yesterday, adding further to the amount of capital-raising in the financial sector during the second half of this year.

CMB’s rights issue won’t be too big a drain on the appetite for financial sector shares among international investors, however, as only 18.1% of its capital raising, or about $985 million will come from the sale of...

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