Shares for Industrial & Commercial Bank of China (中國工商銀行) rose yesterday as China's largest lender launched its US$21.9 billion initial public offering -- the world's biggest ever -- in Hong Kong and Shanghai.
The stock's price rocketed up 14.6 percent to HK$3.52 (US$0.45) -- compared to its IPO price of HK$3.07 per share -- when it started trading in Hong Kong. They traded between HK$3.50 and HK$3.63 in the morning session.
The state-owned bank made history by simultaneously listing its IPO in Shanghai, but its shares there didn't rise as much as expected. The bank's so-called "A shares" gained 5.1 percent from their debut price to close at 3.28 yuan (US$0.42). They had been expected to trade between 3.40 yuan and 3.60 yuan.
ICBC's stock sale beats the previous record, a US$18.4 billion IPO by Japanese mobile phone firm NTT DoCoMo Inc in 1998.
In the past year, three of China's Big Four banks have successfully gone public, selling US$42 billion worth of stock to international investors.
The IPO's timing for the gargantuan bank, whose assets totaled 6.45 trillion yuan (US$816 billion) at the end of last year, couldn't be better.
After years of languishing in post dot-com bust and scandal-related doldrums, Shanghai's market has finally taken off, trading near five-year highs. Yuan-denominated A shares are up nearly 56 percent since the beginning of the year.
And Hong Kong's benchmark Hang Seng Index surged 1.1 percent to a record high of 18,353.74 on Thursday.
Over the past decade, China's best companies, such as Petro-China Co (
Current regulations prevent most mainland Chinese from openly investing in Hong Kong shares, and bar most foreign investors from buying yuan-denominated mainland Chinese shares.
But in the past year, regulators have carried out carefully orchestrated shareholding reforms aimed at shifting government-held, nontradable shares into the market. Most of the shares affected are subject to lockup periods, helping to alleviate uncertainties over a possible flood of new shares hitting the market.
The giant bank's trading debut marks a milestone in more than two decades of reforms.
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