The China Securities Regulatory Commission will review on Monday
an application by the Bank of Communications (BoCom) for an initial
public offering in Shanghai.
The China Securities
Regulatory Commission will review Bank of Communications'
applicaiton.
BoCom, China's fifth-largest lender, plans to issue 3.19 billion
A shares, or 6.51 percent of its expanded share capital, the bank
said in its preliminary prospectus.
Funds raised from the offering will be used to replenish the
bank's capital base, to support its business growth.
Its capital adequacy ratio stood at 10.83 percent at the end of
2006, down from 11.20 percent at the end of 2005, according to the
prospectus.
The Shanghai-based, Hong Kong-listed bank, does not provide a
target sum it hopes to raise.
BoCom's shares in Hong Kong climbed 0.71 percent to close at
8.51 HK dollars on Friday.
Based on this price, the bank could raise about 27 billion yuan
through the offering, but generally local companies sell shares in
domestic IPOs at a discount to their H share price.
A recent Morgan Stanley report said China had the most expensive
bank stocks in Asia's emerging markets, trading at about 3.2 times
the estimated book value in 2007, compared with 1.7 times for peers
in India and 1.4 times for South Korea.
BoCom traded at 3.5 times its estimated 2007 book value after
shares surged 152 percent following its Hong Kong IPO in June
2005.
The lender joins China CITIC Bank Co to take advantage of
soaring domestic stock prices to sell shares.
China CITIC Bank earlier this month began marketing a
simultaneous IPO in Shanghai and Hong Kong that is expected to
raise as much as US$5.4 billion.
China Galaxy Securities, CITIC Securities and Haitong Securities
have been appointed lead underwriters and Goldman Sachs Gaohua
Securities the financial adviser for BoCom's Shanghai IPO.
After the offering, HSBC's stake in BoCom will drop to 18.6
percent from the current 19.9 percent.
(China Daily April 14, 2007)
