Thousands of people across Hong Kong flocked to banks yesterday in a rush to buy into what could be the world's largest initial public offering (IPO) from Industrial and Commercial Bank of China (ICBC,
In the stock market, the launch has capped the Hong Kong market's gains amid concerns the float will drain market liquidity.
Chinese banks listed in the city were mostly lower as investors switched out of stocks to invest in ICBC.
The Hang Seng Index closed up 21.34 points at 18,010.20 yesterday.
Although investors were allowed to apply for the listing on the Internet for the first time, it did not stop many of them lining up for application forms and a prospectus on the first day of the float's retail launch.
By early morning, more than 200 people were lining up hours before the banks' opening in the industrial Kwun Tong area in Kowloon District as bank staff kept emptying boxes of forms and prospectus.
Many people on the streets of the central financial district were also seen clutching a few forms in their hands.
Three million application forms have been published for the IPO, in which China's largest lender may raise more than US$20 billion, trumping the US$18.4 billion offer by Japanese mobile phone service operator NTT DoCoMo Inc in 1998.
"This is the focus [of] the world. I cannot miss it. Everyone is applying for it. You can't possibly lose money here. It's like HSBC, you never lose if you put money in that bank," said Michael Cheung, a 45-year-old architect.
China's sizzling economic expansion and the overhaul of its banking sector has fueled a huge international appetite for ICBC, which on Oct. 27 will become the latest in a recent series of Chinese banks to list on overseas stock markets.
Many individual investors see it as a quick opportunity to make money.
"I have made a little bit pocket money with the Bank of China [
Bank of China listed in Hong Kong in June, and then in Shanghai in July.
Cheung Sang, a 70-year-old retired teacher, hoped to make short-term gains.
"I have confidence in the bank, but I don't expect it to make me much money first of all. I do this for short-term investment," he said.
"But I believe in the potential of the bank development because of China's strong economic growth," he said.
"I hope it will be able to do as good as other top banks in the US and Japan," he said.
ICBC, which has some US$800 billion in assets, has set a price of HK$2.56 to HK$3.07 for its offer in Hong Kong of 35.4 billion H-shares, which could be raised to 40.7 billion H-shares.
It will sell another 13 billion A-shares in Shanghai at the same price, but could up the number to 14.95 billion if it uses an over-allotment option.
Hong Kong newspaper the Standard reported yesterday that the institutional portion of the IPO is 17 times oversubscribed, attracting orders worth more than US$170 billion.
The South China Morning Post reported that the institutional orders were worth US$130 billion.
The A-share institutional portion opened in Shanghai yesterday, while Chinese retail investors will have to wait until Thursday.
Hong Kong investors will have until Thursday midday to place orders, while ICBC will announce the pricing of its initial offering next Monday.