China Merchants IPO hits Hong Kong market
(AP)
Updated: 2006-09-22 14:28
HONG KONG - China Merchants Bank made a strong debut Friday in early
trading on Hong Kong's stock market as another Chinese lender, the country's
biggest, got ready to kick off what could be the world's largest initial public
offering.
Retail and institutional investors snapped up
China Merchants' shares, which opened at HK$10.88 (US$1.39), 27 percent higher than
their IPO price of HK$8.55 (US$1.09). The bank, the mainland's
sixth-largest lender, raised US$2.4 billion in the second biggest IPO in Hong Kong
this year.
The listing came one day after Industrial & Commercial Bank of China got
approval to list in Hong Kong. The bank planned to launch its US$19
billion IPO simultaneously in Hong Kong and Shanghai in late October.
ICBC was expected to release its prospectus online later Friday, a person
familar with the IPO told The Associated Press.
The IPO could be the world's largest since NTT Mobile Communications Network
Inc., or NTT DoCoMo Inc., raised US$18.4 billion in 1998, according to
market-data provider Dealogic Inc.
ICBC would be the third of China's big four state-owned banks to list in the
last year. The other two were the smaller Bank of China Ltd. and China
Construction Bank Corp. Both have fared well in Hong Kong as investors viewed
them as ways to tap into China's fast-growing economy.
China Merchants' strong debut Friday was a sign that investors are still
excited about getting a piece of a major Chinese bank.
Demand for the retail portion of the bank's IPO were more than 266 times
oversubscribed. To better meet demand, the retail tranche was raised to 20
percent from 5 percent of China Merchants' total offering. The institutional
tranche of the deal was more than 50 times covered, with orders totaling US$96.4
billion.
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