Sun, Sep 24, 2006 - Page 11 News List

China Merchants Bank makes strong market debut in HK


China Merchants Bank (招商銀行) made a strong debut on Hong Kong's stock market as another Chinese lender -- the country's biggest commercial bank -- got ready to kick off what could be the world's largest initial public offering.

China Merchants' share price rocketed to HK$10.68 on Friday -- 25 percent higher than the IPO price of HK$8.55. The bank, China's sixth-largest lender, raised US$2.4 billion in the second biggest IPO in Hong Kong this year.

"We're very satisfied," the bank's chairman, Qin Xiao (秦曉), said.

"This shows how much the investors and the market approve of our business and have confidence in the future of our business. But the road is long. It doesn't mean much if a stock's price is good on one day," Qin added.

China Merchants was seen as a good buy because it has fewer non-performing loans than other big state-run banks and its also operated more like a for-profit business, analysts said.

"The rise in China Merchant's share price is because fund managers want to buy as much as possible, as it is considered the best-quality bank in mainland China," said Kenny Tang, associate director of Tung Tai Securities.

The listing came one day after Industrial & Commercial Bank of China (ICBC, 中國工商銀行) got approval to list in Hong Kong.

The bank planned to launch its US$19 billion IPO simultaneously in Hong Kong and Shanghai late next month.

Late on Friday night, ICBC posted its preliminary prospectus on the China Securities Regulatory Commission Web site. The IPO still needs regulatory approval.

The bank said it wanted to issue 13 billion A-shares, which are priced in Chinese currency. It also wanted to offer 35.39 billion H shares, or stocks for a mainland Chinese-registered company listed in Hong Kong.

The preliminary prospectus didn't provide guidance on pricing of the shares, but said that the A shares would be priced equal to H shares.

The IPO could be the world's largest since NTT Mobile Communications Network Inc, or NTT DoCoMo Inc, raised US$18.4 billion in 1998, according to market-data provider Dealogic Inc.

ICBC would be the third of China's big four state-owned banks to list in the last year.

The other two were the smaller Bank of China Ltd (中國銀行) and China Construction Bank Corp (中國建設銀行).

Both have fared well in Hong Kong as investors viewed them as ways to tap into China's fast-growing economy.

This story has been viewed 3522 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top