After HK, BOC eyes mainland IPO
By Zhang Ran and Li Xiaowei (China Daily)
Updated: 2006-05-30 08:57 "In
fact, issuing A shares on the domestic bourse is part of BOC's whole listing
plan and we have already got approval from the CSRC. But there are still some
details that need the CSRC's approval."
Wang said the total volume of A
shares and H shares together will account for 15 per cent of BOC's total
equity.
The bank has already issued US$9.8 billion of H
shares.
"The number of A shares will not be more than 10 billion, capping
approximately 20 billion yuan (US$2.5 billion)," Xiao Gang, chairman of BOC said
last week in Hong Kong. If so, A shares will account for 3 per cent of the
bank's equity.
The government's recent lift of the year-long ban on IPOs
in the domestic bourse has encouraged many banks who need cash to issue A shares
to increase their capital-adequacy ratio, a key factor when evaluating a bank's
competence.
Last week, the Fujian-based Industrial Bank also announced it
would issue A shares very soon and probably be one of the first banks to do
so.
According to Li Renjie, president of the Industrial Bank, it passed
IPO application materials to the CSRC at the end of last year.
Analysts
pointed out that A-share issuance could turn out to be a double-edged sword for
bank shares in the domestic market.
"The issuance of H shares is likely
to benefit BOC's A share price as the H share price, which is higher, would be
taken by investors as a reference point," said Li Minya, an analyst with the
Shenyin Wanguo Securities.
"But the stock of some other listed
banks may be marginalized as institutional investors would first of all pick BOC
for their bank stock portfolio," Li said.
BOC's A shares will be available to mainland investors and
overseas buyers although the latter will only be permitted under a qualified
foreign institutional investor (QFII) scheme, the bank said in its preliminary
listing document.
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