The mainland's largest property lender, China Construction Bank
(CCB),
raised US$8 billion in the world's largest initial public offering
(IPO) this year, after it priced its shares at HK$2.35 apiece
yesterday, close to the top end of the indicative range.
Analysts believe CCB will become a major market mover after its
shares are traded in Hong Kong from next Thursday. They think CCB's
share price will soar.
Lai Wai-ching, associate director of Hantec Investment Holdings
based in Hong Kong, predicted that CCB's share price would rise by
5 to 8 percent in the short term, and has the potential to exceed
HK$10 in the long term.
CCB, the first of the big four state-owned banks to be listed
overseas, had earlier priced its IPO at between HK$1.9 and HK$2.4
when it sold 26.5 million H, or Hong Kong-listed shares, through
the global offering. Among them, 1.32 billion shares, or 5 percent,
were initially earmarked for retail investors in Hong Kong, with
the rest for international offering, including some to CCB's
strategic investors.
A spokesman for CCB declined to reveal subscription results,
only saying the bank will release an official announcement next
Tuesday.
It was reported that the international tranche as of yesterday
attracted investment demand worth US60 billion from institutions
and corporations, including Japanese investors and private
banks.
Market sources have said the IPO's retail portion was more than
42 times over-subscribed, less than the 50 to 60 times level
earlier estimated by Hong Kong brokerages. Sources close to the
deal said the retail portion of the IPO was lifted to 7.5 percent
from the initial 5 percent, even though demand was not as huge as
expected.
"Retail investors are very careful about their investments these
days as the stock market is sluggish," Lai said. "They are now more
aware of valuation and margin costs."
However, Lai believes CCB's IPO was a good beginning and will
encourage other mainland banks that are preparing for their
overseas listings.
"I believe CCB, as well as other mainland lenders, have the
potential to become investment darlings among local investors," Lai
added.
According to CCB's prospectus, proceeds from the IPO would be
used to strengthen the company's capital base in order to support
growth.
The Bank of Communications was the first mainland bank to be
listed overseas. Its shares were over-subscribed by more than 200
times earlier this year.
One of the largest commercial banks in China, CCB has about
14,250 branches. It has a nationwide base of approximately 68,000
corporate loan and discounted bill customers, and approximately 146
million active personal deposit accounts.
(US$1=HK$7.8)
(China Daily October 21, 2005)