China Construction Bank (CCB), one of the nation's four big state-owned commercial lenders, has attracted a record 2.26 trillion yuan (US$300 billion) in subscriptions for its A-share initial public offering.
The new record exceeded the 1.9 trillion yuan received by the Bank of Beijing, the country's largest city commercial bank, less than a week ago, the Shanghai Securities News reported Tuesday.
Analysts said the record came as investors rushed to IPOs for almost certain high price rises on debut and chased blue chips for stable earnings as risks started to build on the heated domestic equity markets
China's benchmark Shanghai Composite Index climbed 2.06 percent to finish at 5,421.39 on Monday, more than doubling since the beginning of the year.
The CCB's on-line subscriptions from individual investors exceeded more than 1.6 trillion yuan, while off-line subscriptions from institutional investors hit 660 billion yuan, the newspaper said.
The over-subscription would prompt the bank to follow earlier common practice to sell its shares at 6.45 yuan per share, the high end of its price range. It had earlier set the price range of its A-share IPO between 6.15 and 6.45 yuan per share.
This share price translated into a price-to-earnings ratio of 31.38 to 32.91 times, according to the IPO's main underwriters China International Capital Corporation, CITIC Securities and China Cinda Asset Management Company.
The bank, Chinese partner of the American Bank, has said it plans to issue no more than 9 billion shares, less than 3.85 percent of the expanded capital after the IPO and the proceeds will be used to boost its capital adequacy ratio.
The bank's earnings per share in the first half of 2007 was 0.15 yuan, compared with 0.12 yuan for the ICBC and Bank of China.
Its non-performing loans ratio stood at 2.95 percent at the end of June, lower than the 3.29 percent half a year ago.
The CCB shares would likely debut on the Shanghai Stock Exchange at about 30 percent higher than its H-share prices in Hong Kong, according to Changjiang Securities.
The government has encouraged the return of China's large red-chip companies, mainland firms incorporated outside the mainland and listed in Hong Kong, to mainland bourses to disperse excessive liquidity and help cool down the stock markets.
On Monday China securities regulator gave go-ahead to the A-share IPO plan of another red-chip China Shenhua, the country's largest coal producer.
China Mobile, the world's largest handset operator in terms of subscribers, and PetroChina, the nation's largest oil producer, are also expected to launch A-share IPOs this year.
(Xinhua News Agency September 18, 2007)
