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Bawang's IPO draws almost US$9b

CHINESE herbal shampoo maker Bawang International Group drew nearly US$9 billion in retail orders for its initial public offering in Hong Kong, reports said yesterday, amid signs of renewed investor confidence.

The strong response was likely to lead Bawang, which is based in the southern city of Guangzhou in Guangdong Province, to price its shares at or close to the maximum price of HK$2.38 (12 US cents), the South China Morning Post and other reports said, citing unnamed sources.

Bawang is the latest among several China-based companies whose shares have been avidly sought by investors seeking fresh opportunities for gains.

Mainland share markets are resuming initial public offerings after a nine-month moratorium, with a small drug maker -- Guilin Sanjin Pharmaceutical Co --- due to debut on Monday in Shenzhen, the smaller of China's two stock exchanges.

The offering by Bawang, which has hired film celebrity Jackie Chan to promote its products, was 420 times oversubscribed, triggering a clawback mechanism that increased the retail section to half of its HK$1.67 billion IPO from the original 10 percent, the reports said.

Other firms are also faring well.

China Qinfa, a coal trading and transport company, raised HK$630 million in its recent Hong Kong IPO. Its shares begin trading on Friday.

Share prices in Hong Kong and Chinese mainland have been rising, with the Hang Seng Index up about 28 percent since the beginning of the year, and the Shanghai Composite Index up 60 percent.

Investors have been encouraged by strong initial gains made by several other newcomers.


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