ABC could net world-mark IPO
By Zhang Fengming |
June 29, 2010, Tuesday
|
Print Edition
Print Edition
AGRICULTURAL Bank of China could net a maximum US$23.1 billion in its dual-listing, based on its A-share price range announced yesterday.
That could make it the world's largest initial public offering with its dual-listing in Shanghai and Hong Kong.
The third biggest bank in China by assets priced its yuan-backed A-shares between 2.52 yuan (37 US cents) and 2.68 yuan each, the Beijing-based bank said in a filing to the Shanghai Stock Exchange last night.
The bank last week priced its Hong Kong shares at HK$2.88 (37 US cents) to HK$3.48 apiece.
Based on those prices, the bank could raise a maximum of US$23.1 billion from its dual-listing if it executes the "green-shoe" option to sell extra shares, surpassing Industrial and Commercial Bank of China's US$21.9 billion IPO in 2006 as the world's biggest.
The A-share price range was lower than previous market expectations.
Shenyin & Wanguo Securities Co expected a price range between 2.75 yuan and 3.30 yuan. The bank's four underwriters expected a share price of over 3 yuan, according to earlier reports.
"A low issue price in hopes of higher growth on the issuing day sounds better than a drop," said Xiao Hua, an investment manager at an insurer in Shanghai. "Meanwhile, the bank can still accomplish its super-large capital raising scale by executing the option to sell extra shares."
The bank has an option to increase the IPO by 15 percent to meet excess demand, boosting the shares it sells in Hong Kong to 29.22 billion and in Shanghai to 25.57 billion. Its IPO topped US$20.1 billion without the extra shares.
The bank's IPO comes at a time when the benchmark Shanghai Composite Index has lost 22 percent this year as the worst performer among the world's 10 major markets.
But the bank's huge and extensive network in China's rural areas is a major selling point. "The bank enjoys potential in the rural market as China is going deeper to generate growth in the rural areas," said Li Yamin, a Shenyin & Wanguo Securities analyst.
Eleven so-called cornerstone investors, including Qatar's sovereign investment fund, Standard Chartered Bank and Hong Kong's richest tycoon Li Ka-shing, are investing in the IPO ahead of the bank's trading debut in Hong Kong and Shanghai scheduled for July 6.
China International Capital Corporation, CITIC Securities Co, China Galaxy Securities Co and Guotai Junan Securities Co are managing the bank's yuan-denominated A-share offering.
That could make it the world's largest initial public offering with its dual-listing in Shanghai and Hong Kong.
The third biggest bank in China by assets priced its yuan-backed A-shares between 2.52 yuan (37 US cents) and 2.68 yuan each, the Beijing-based bank said in a filing to the Shanghai Stock Exchange last night.
The bank last week priced its Hong Kong shares at HK$2.88 (37 US cents) to HK$3.48 apiece.
Based on those prices, the bank could raise a maximum of US$23.1 billion from its dual-listing if it executes the "green-shoe" option to sell extra shares, surpassing Industrial and Commercial Bank of China's US$21.9 billion IPO in 2006 as the world's biggest.
The A-share price range was lower than previous market expectations.
Shenyin & Wanguo Securities Co expected a price range between 2.75 yuan and 3.30 yuan. The bank's four underwriters expected a share price of over 3 yuan, according to earlier reports.
"A low issue price in hopes of higher growth on the issuing day sounds better than a drop," said Xiao Hua, an investment manager at an insurer in Shanghai. "Meanwhile, the bank can still accomplish its super-large capital raising scale by executing the option to sell extra shares."
The bank has an option to increase the IPO by 15 percent to meet excess demand, boosting the shares it sells in Hong Kong to 29.22 billion and in Shanghai to 25.57 billion. Its IPO topped US$20.1 billion without the extra shares.
The bank's IPO comes at a time when the benchmark Shanghai Composite Index has lost 22 percent this year as the worst performer among the world's 10 major markets.
But the bank's huge and extensive network in China's rural areas is a major selling point. "The bank enjoys potential in the rural market as China is going deeper to generate growth in the rural areas," said Li Yamin, a Shenyin & Wanguo Securities analyst.
Eleven so-called cornerstone investors, including Qatar's sovereign investment fund, Standard Chartered Bank and Hong Kong's richest tycoon Li Ka-shing, are investing in the IPO ahead of the bank's trading debut in Hong Kong and Shanghai scheduled for July 6.
China International Capital Corporation, CITIC Securities Co, China Galaxy Securities Co and Guotai Junan Securities Co are managing the bank's yuan-denominated A-share offering.
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