Agricultural Bank of China (AgBank, 中國農業銀行) launched a share offer worth a world-record US$23.2 billion yesterday, as China strives to develop depressed regions in the rural lender’s heartland.
AgBank, the last of China’s “big four” state banks to list, plans to float its shares in Hong Kong and Shanghai next month with the monster IPO on track to overtake a previous record of US$22 billion set by Industrial and Commercial Bank of China (ICBC, 中國工商銀行) in 2006.
The initial public offering has already won bedrock support from heavyweight investors — including Qatar’s sovereign wealth fund, British bank Standard Chartered and US food giant Archer Daniels Midland.
PHOTO: REUTERS
Standard Chartered said yesterday it would sign up for US$500 million of shares in AgBank in next month’s flotation to become one of the biggest shareholders.
“Agricultural Bank of China is a great bank with a great future,” Standard Chartered Group chief executive Peter Sands said in a statement to the London Stock Exchange.
“This investment is a natural next step in our longstanding relationship and it underpins our recent agreement to develop business together,” he said.
Small-time retail investors had their first chance to grab a piece of the action yesterday and lines were building outside bank branches in Hong Kong where the AgBank prospectus was being handed out.
“I think it will be a pretty good investment — there is good demand for this stock,” Warren Ng, 24, said as he grabbed a weighty prospectus at HSBC’s headquarters in the city’s financial district.
“I’ve already made up my mind. I’m going to put some money in it,” he said.
But retiree S.S. Fung said he wasn’t so sure about the massive share sale, especially after his investment in AgBank’s Chinese rivals fell flat.
“I think I’ll take a little of this one, but this is not a good time in the market,” he said.
Hong Kong’s South China Morning Post also reported that investors in the soccer-mad territory may be distracted by the World Cup.
“The IPO has come at a wrong time as market sentiment is not good while the World Cup is going on,” Christopher Cheung (張華峰), chairman of Hong Kong’s Christfund Securities (恒豐證券), was quoted as saying. “[Some investors] think they could earn more money from soccer betting than the IPO.”
AgBank chairman Xiang Junbo (項俊波) said on Tuesday that his company had worked hard to cut its bad-debt load, a major concern for all of China’s big banks after a state-sanctioned lending binge during the global financial crunch.
The lender also says it is poised to capitalize on Chinese government efforts to boost economic growth in the country’s center and west, which have missed out on the export-driven boom enjoyed by coastal regions.
“The county area business will be one of our key profit drivers,” Xiang told a news conference in Hong Kong. “[AgBank] is well positioned to capitalize on China’s next wave of growth.”
AgBank said on Tuesday it planned to raise US$13.1 billion from the Hong Kong IPO, with a price range of HK$2.88 to HK$3.48 (US$0.37 to US$0.44) a share.
The lender plans to raise US$10.1 billion from the Shanghai portion of the share sale, with a range of 2.52 to 2.68 yuan (US$0.37 to US$0.39) a share.
Agbank’s prospectus said its bad debt ratio dropped from 4.32 percent in 2008 to 2.91 percent last year.
The bank said it booked a profit of 65 billion yuan last year, up from 51.45 billion yuan in 2008.
It forecasts a profit of 82.9 billion yuan for this year.
RISK REMAINS: An official said that with the US presidential elections so close, it is unclear if China would hold war games or keep its reaction to angry words The Ministry of National Defense said it was “on alert” as it detected a Chinese aircraft carrier group to Taiwan’s south yesterday amid concerns in Taiwan about the possibility of a new round of Chinese war games. The ministry said in a statement that a Chinese navy group led by the carrier Liaoning had entered waters near the Bashi Channel, which connects the South China Sea and the Pacific Ocean and separates Taiwan from the Philippines. It said the carrier group was expected to enter the Western Pacific. The military is keeping a close watch on developments and “exercising an
FIVE-YEAR WINDOW? A defense institute CEO said a timeline for a potential Chinese invasion was based on expected ‘tough measures’ when Xi Jinping seeks a new term Most Taiwanese are willing to defend the nation against a Chinese attack, but the majority believe Beijing is unlikely to invade within the next five years, a poll showed yesterday. The poll carried out last month was commissioned by the Institute for National Defense and Security Research, a Taipei-based think tank, and released ahead of Double Ten National Day today, when President William Lai (賴清德) is to deliver a speech. China maintains a near-daily military presence around Taiwan and has held three rounds of war games in the past two years. CIA Director William Burns last year said that Chinese President Xi Jinping
REACTION TO LAI: A former US official said William Lai took a step toward stability with his National Day speech and the question was how Beijing would respond US Secretary of State Antony Blinken yesterday warned China against taking any “provocative” action on Taiwan after Beijing’s reaction to President William Lai’s (賴清德) speech on Double Ten National Day on Thursday. Blinken, speaking in Laos after an ASEAN East Asia Summit, called the speech by Lai, in which he vowed to “resist annexation,” a “regular exercise.” “China should not use it in any fashion as a pretext for provocative actions,” Blinken told reporters. “On the contrary, we want to reinforce — and many other countries want to reinforce — the imperative of preserving the status quo, and neither party taking any
President William Lai (賴清德) yesterday said that China has “no right to represent Taiwan,” but stressed that the nation was willing to work with Beijing on issues of mutual interest. “The Republic of China has already put down roots in Taiwan, Penghu, Kinmen and Matsu,” Lai said in his first Double Ten National Day address outside the Presidential Office Building in Taipei. “And the Republic of China and the People’s Republic of China [PRC] are not subordinate to each other.” “The People’s Republic of China has no right to represent Taiwan,” he said at the event marking the 113th National Day of
RSS