ICBC starts consultations on IPO pricing
By Zhang Lu (China Daily)
Updated: 2006-09-28 09:21
A-share underwriters will give pre-marketing presentations to price
consultation participants in Beijing, Shanghai, Shenzhen and Guangzhou from
September 27 to 29 and October 9 and 11.
"ICBC's share offering will put
some pressure on the domestic stock market, as part of its funds will turn to
the new shares," said She.
"But it is unlikely to have a big impact due
to sufficient market liquidity."
ICBC's A shares should not have a market
value any lower than that of Bank of China (BOC), said She.
BOC's A
shares have been traded at between 3.2 yuan (40 US cents) and 3.46 yuan (43 US
cents) over the past month.
However, some analysts worry that ICBC's
relatively large bad loan ratio will hurt its performance.
The bank has
cautioned investors that it faces various business risks including
non-performing loans and increased competition.
By the end of June,
ICBC's NPL ratio stood at 4.1 per cent, down from 4.69 per cent in December
2005.
Its loan book showed the bank has the greatest exposure to the
manufacturing sector, which accounted for 27.8 per cent of its domestic
corporate loans, with the real estate market accounting for 9.1 per
cent.
"A significant downturn in any industry in which loans are highly
concentrated may lead to a significant increase in non-performing loans," it
added.
In addition, China's banking industry is becoming increasingly
competitive as foreign banks prepare for the opening of the financial sector at
the end of this year.
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