The planned mammoth initial public offering by China Construction Corp could present another pressing problem for the mainland's precarious stock market, raising fears that a meltdown may yet come. If the mainland's largest real-estate contractor passed a public-offering review by the regulator on Thursday, its future offering would drain another 40 billion yuan (HK$45.03 billion) from the already weak market, exacerbating uncertainty, analysts said. China Construction aims to sell 12 billion A shares, or 40 per cent of its enlarged capital, to raise 40 billion yuan, the largest offering on the Shanghai Stock Exchange this year. The company would leapfrog Ping An Insurance (Group)'s 38.87 billion yuan offering in February last year to become the country's fifth-largest share sale. 'It is a zero-sum game - the company is desperately looking for capital while the market is struggling to shrug off gloomy sentiment,' said GF Securities analyst Wang Fei. 'Unfortunately, the regulator chose to support the cash-hungry company at the cost of investors' interests.' The builder of the Water Cube, or National Aquatics Centre for the Beijing Olympics, received special permission from the State Council for the offering because it has been operational for less than six months. Mainland listing regulations require applicants to report a profit for three consecutive years. The company said it would use the proceeds to replenish five mega-projects and boost capital flow. The China Securities Regulatory Commission slowed the pace of share offerings this year amid fears that new shares would saturate the already bearish market. The Shanghai Composite Index has slumped 34.3 per cent this year, closing at 3,459.04 yesterday. All signs suggest the indicator will continue to fall given investors' low confidence, despite efforts by the CSRC to bolster the market. In the past three weeks, the regulator has twice required fund managers not to dump shares for fear the market would retreat below the 3,000-point level. 'The big IPO is undoubtedly bad news,' said Haitong Securities analyst Zhang Qi. 'What's worse, the market is still overshadowed by selling pressure from previously non-tradable shares.' Large quantities of state-owned shares become free-floating this year as their lock-up periods expire. Some investors and analysts argued that the negative impact of China Construction's share offering would be minimal, noting the Shanghai index's mild rise yesterday of 25.69 points or 0.75 per cent. But others disagreed, saying the rally would be short-lived. 'Since the fund managers were forced to hold on to shares, selling pressure has eased for the moment,' said Morgan Stanley China equity strategist Jerry Lou. 'In the long term, selling pressure will remain.'