January 6, 2011 / 5:11 AM / 7 years ago

UPDATE 1-Ping An shares slump on fundraising rumour

* Brokerages forecast capital shortfall of 20-50 bln yuan

* Speculation of up to 100 bln yuan target exaggerated-Guosen

* Stock falls 4.1 pct in Shanghai, less than 1 pct in HK (Adds analyst quote, more details)

By Samuel Shen and Jacqueline Wong

SHANGHAI, Jan 6 (Reuters) - Shares of Ping An Insurance (Group) of China Ltd (601318.SS) slumped to three-month lows in Shanghai on Thursday on market rumours that the country’s second-biggest life insurer was planning to raise as much as 100 billion yuan ($15 billion) through a share sale.

Brokerages including Citic Securities Co (600030.SS) and Guotai Junan Securities have recently predicted in notes to clients that Ping An, which acquired Shenzhen Development Bank (000001.SZ) last year, has a capital shortfall of 20-50 billion yuan.

“The figures are based purely on analyst calculations, rather than any information from the company,” said Huang Huamin, analyst at Citic Securities, who forecast a shortfall of 30-40 billion yuan.

Speculation is swirling in the market, however, that Ping An may need to raise as much as 100 billion yuan, and that the company may also have suffered from poor investment returns during the fourth quarter of 2010.

    A Ping An spokesman declined to comment when contacted by telephone.

    Ping An shares slumped 4.1 percent in Shanghai in morning trade, having touched its lowest level since Sept. 30. In Hong Kong, the stock (2318.HK) was down less than 1 percent at noon.

    Some analysts hold the view that Ping An’s share price tumble on Thursday, as well as its 3.6 percent fall on Wednesday, triggered market speculation about a possible share sale.

    But Guosen Securities Co said in an emailed note to clients on Thursday that Ping An was unlikely to launch fundraising any time soon and that its expected capital shortfall for 2013 was merely about 20 billion yuan. ($1=6.66 Yuan) (Reporting by Samuel Shen and Jacqueline Wong)

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