10 Proposed IPO Bank Measures To Stabilize Stock Prices

< p > from the pre prospectus prospectus (Draft), although these banks have not said that they should issue more than net assets, the remaining 10 banks have proposed measures to stabilize the share price in three years except Shanghai bank. The trigger conditions are "A shares in the bank are closed for 20 trading days, and the closing price is lower than the latest net asset per share".

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< p > > Hangzhou a href= "http:// www.sjfzxm.com/news/index_cj.asp" > Bank < /a > points out that when the obligation to trigger the stabilization of stock price is triggered, the first option is to buy back the stock, but when the repurchase stock fails to meet the statutory listing requirements, the second option is to increase the share holdings of the controlling shareholder.

When the controlling shareholder is overweight, when the stock is still not satisfied, "the closing price of 3 consecutive trading days has been higher than the audited net assets per auditor in the latest year", triggering the third option -- directors and executives to increase their holdings (to meet the conditions that will not cause the company to fail to meet the statutory listing requirements or trigger the offer obligation of controlling shareholders or actual controllers).

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< p > the Bank of Jiangsu's stock price stabilization plan proposes that after reaching the conditions, the company will study the plan with the largest shareholder of Jiangsu trust, relevant directors and executives in 5 working days.

The methods can be taken as follows: first, the total public stock shall be repurchased at a rate of not less than 500 million yuan within three years after the listing, not exceeding the net asset price per share. < /p >

< p > (buyback is implemented in 6 months after triggering stability < a href= "http:// www.sjfzxm.com/news/index_cj.asp" > stock price < /a > obligations); second, the implementation of profit distribution or capital reserve to increase capital stock to stabilize stock price; third, reduce expenditure and improve business performance.

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< p > in addition, when triggering conditions for stabilizing measures can be triggered, the Jiangsu trust can also accumulate funds of not less than 15% of the most recent cash dividend. Non independent directors and senior executives should increase their holdings of company stock by accumulatively less than 15% of the previous year's salary. The price increase should be lower than the net assets per share.

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< p > the rest of the banks have slightly different details, but the main methods are similar, including < a href= "http:// www.sjfzxm.com/news/index_cj.asp" > buyback < /a >, holdings and so on.

Jiangsu Wujiang agricultural and commercial bank will also "stock closing 5 trading days closing price lower than 120% of the net assets per share" as an early warning condition, announced that it will hold investors' meeting within 10 trading days after triggering early warning conditions.

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< p > the foregoing broker sponsor pointed out that for these quasi IPO banks, they are faced with a dilemma: either the primary market is higher than the net asset issue per share, so investors may not buy it, nor will the sponsor be willing to underwrite it. Or it will be issued at a net asset below the share price, which has made the stock price stable condition before it has been listed.

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