Bloomberg reported that Citic Securities Co China's second biggest brokerage by market value bought CNY 407.4 million of shares in Shanxi Taigang Stainless Steel Co that it couldn't sell in an additional stock offering.

According to a statement Taigang filed to the Shenzhen Stock Exchange, Citic will purchase the 39 million shares, equivalent to 11.5% of the sale that investors didn't buy. The Shenzhen offering raised about CNY 3.55 billion the biggest in China since May.

Mr Liang Jing a Shanghai based analyst at Guotai Junan Securities Co said that “The underwriting risks are higher in a weak market for securities companies. Citic's risks are lower than the industry average because the companies it underwrites for are better positioned in their industries.''

Citic will have to use about CNY 407.4 million of cash to buy the Taigang shares, based on the sale price of CNY 10.46 apiece. The Beijing based firm is also underwriting the 100 million share initial public offering of Shaanxi Provincial Natural Gas Co this week.

Mr Raymond Tang spokesman for Citic declined to comment.