Bank of China (
Shares were valued at HK$2.95 each (US$0.38), and they closed at HK$3.40, defying jitters that dragged down the market's benchmark Hang Seng Index by 1.3 percent.
About HK$20.06 billion worth of shares changed hands.
Demand for the stock has been strong among institutional investors, who haven't been scared away by the bank's history of corruption and bad debt.
The bank's ratio of nonperforming loans to total lending was reported at a whopping 33 percent in 2003. After a government bailout, the bank said the number fell to 4.4 percent.
However, much of its lending has been to companies, and an economic slowdown could cause the bad loans to balloon again.
Corruption has been another worry. Former bank chairman, Wang Xuebing (王雪冰), is serving a prison term for taking bribes. A former president of the bank's Hong Kong branch, Liu Jinbao (劉金寶), was given a suspended death sentence last year for embezzlement.
Two former branch managers and their family members are facing trial in Las Vegas, Nevada, for alleged embezzlement and money laundering.
Steven Cheung (張仁良), a professor of finance at City University of Hong Kong, said the past problems aren't spooking investors because they think the stock gives them a chance to buy into China's hot economic growth.
Cheung added that investors think that since the bank is among the first to list overseas, it must have sorted out its accounting books and is "brave enough to face the international investment community." The bank also has the crucial support of China's central government, which has launched a campaign to clean up the financial system, he said.
"Bank of China is too big to fail," the professor said.
Another factor inspiring investors is the success other Chinese banks have had with IPOs in the past year in Hong Kong. The share price for China Construction Bank (中國建設銀行), the nation's No. 4 lender, has shot up nearly 50 percent since its IPO in late October.
The parade of big Chinese bank IPOs is expected to continue when Industrial and Commercial Bank of China (中國工商銀行), the country's No. 1 lender, hits Hong Kong's market later this year.
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