China Railway Construction shares down on new placement

China Railway Construction Corp’s (CRCC) shares continued to fall after yesterday’s announcement that it plans to raise up to renminbi 8 billion (US$1.2 billion) by placing over one billion new A-shares in Shanghai, the South China Morning Post reported. CRCC’s shares in Hong Kong were down 2.26% at the midday close after falling 4.49% yesterday. According to Credit Suisse analyst Ingrid Wei, the placement would dilute CRCC’s return on equity to 11.5% from 12.8%. CRCC said proceeds would be used on highway construction and renovation in Guiyang and part of the Beijing-Shanghai expressway, with the remainder to replenish working capital and service debt.