Shanghai bank up 44% on debut

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November 17, 2016

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Shanghai bank up 44% on debut

By Leng Cheng | November 17, 2016, Thursday |

Print Edition

BANK of Shanghai surged 44 percent on its trading debut yesterday as investors banked on the lender’s relatively stable loan quality.

Its shares jumped to 25.59 yuan (US$3.73) each in 30 minutes — 44 percent above the bank’s IPO price of 17.77 yuan per share and the maximum allowed increase for new shares in a day.

Its IPO was oversubscribed 763 times earlier this month, with a price-to-earnings ratio at 8.26, above the average of 7.66 for 22 other listed peers, data from the Shanghai Stock Exchange showed.

Investors pursued the bank for its relatively stable loan quality and its customer base, in which nearly 94 percent of blue-chip clients are located in developed areas such as the Yangtze River Delta and Bohai Rim regions, Essence Securities Co said.

The lender made 11 billion yuan in net profit in the January-September period, up 10 percent year on year, according to its third-quarter earnings report. Its total assets were 1.7 trillion yuan by the third quarter.

Analyst Mu Hua at GF Securities Co said: “In the near future, the bank will speed up development of consumer finance products and retail banking to enhance profitability.”

Bank of Shanghai was the seventh lender to be listed on China’s mainland this year.

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Shanghai bank up 44% on debut

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