China's AgBank makes tepid HK IPO debut
Sunday, 18 July 2010
HONG KONG, July 17 (AFP): Agricultural Bank of China's shares rose just slightly in the Hong Kong portion of its massive IPO yesterday, with a positive start seen as a matter of pride for the world's third largest economy.
The lender's shares closed at 3.27 Hong Kong dollars (42 US cents), a 2.2 per cent rise on their 3.20 Hong Kong dollar initial public offering price.
The last of China's "Big Four" state banks to go public could raise a record 22.1 billion US dollars in its mammoth dual offering, which opened in Shanghai on Thursday to a tepid investor response.
AgBank has not yet disclosed whether it will exercise an option to issue additional shares, a crucial factor in determining whether the sale would overtake rival Industrial and Commercial Bank of China's record-setting 21.9- billion-dollar IPO in 2006.
AgBank chairman Xiang Junbo told reporters in Hong Kong the flotation was a "historic moment" and "the first step of the internationalisation of AgBank".
He later added that he was happy with AgBank's share price in light of stock market weakness: "I am very satisfied. It's really not too bad -- 3.30 dollars", he said referring to the Hong Kong dollar share price.
Hong Kong's chief executive Donald Tsang and financial secretary John Tsang made a rare appearance at the lender's listing ceremony on Friday, underscoring the importance of AgBank's high-profile flotation.
Several heavyweight foreign investors had been drummed up to help make a success of the Hong Kong portion of the sale. Investors included Qatar's sovereign investment fund, British bank Standard Chartered and Hong Kong's richest tycoon, Li Ka- shing.
The biggest investor in the Shanghai issue was China Life, the nation's largest life insurer by premium income. A total of 40 per cent of the mainland shares went to 27 so- called cornerstone investors-mostly state-owned entities ranging from Cofco Ltd, China's main grain producer, to China Aerospace Science and Industry Corp to the operators of the Three Gorges Dam.
Despite the strong support, AgBank had scaled back its original IPO target of nearly 30 billion US dollars amid choppy markets and questions about its balance sheet.
"The central government is going all out to make sure (AgBank's) IPO is a success," Francis Lun, general manager of Hong Kong's Fulbright Securities, told AFP earlier.
"They're determined to make a good show. Otherwise they would lose face."
AgBank had a lacklustre debut in Shanghai on Thursday with its shares closing at 2.70 yuan (40 US cents) -- up 0.75 per cent from the IPO price of 2.68 yuan, but lower than the opening price of 2.74.
The Shanghai-listed shares closed 0.4 per cent lower on Friday at 2.69 yuan (39 cents).
AgBank's debut rise in both cities was modest compared with previous Chinese bank IPOs, many of which rose 10 per cent on their first day, according to Bernstein Research.
On Thursday, Beijing said that China's blistering economic growth had slowed in the second quarter.
The lender's shares closed at 3.27 Hong Kong dollars (42 US cents), a 2.2 per cent rise on their 3.20 Hong Kong dollar initial public offering price.
The last of China's "Big Four" state banks to go public could raise a record 22.1 billion US dollars in its mammoth dual offering, which opened in Shanghai on Thursday to a tepid investor response.
AgBank has not yet disclosed whether it will exercise an option to issue additional shares, a crucial factor in determining whether the sale would overtake rival Industrial and Commercial Bank of China's record-setting 21.9- billion-dollar IPO in 2006.
AgBank chairman Xiang Junbo told reporters in Hong Kong the flotation was a "historic moment" and "the first step of the internationalisation of AgBank".
He later added that he was happy with AgBank's share price in light of stock market weakness: "I am very satisfied. It's really not too bad -- 3.30 dollars", he said referring to the Hong Kong dollar share price.
Hong Kong's chief executive Donald Tsang and financial secretary John Tsang made a rare appearance at the lender's listing ceremony on Friday, underscoring the importance of AgBank's high-profile flotation.
Several heavyweight foreign investors had been drummed up to help make a success of the Hong Kong portion of the sale. Investors included Qatar's sovereign investment fund, British bank Standard Chartered and Hong Kong's richest tycoon, Li Ka- shing.
The biggest investor in the Shanghai issue was China Life, the nation's largest life insurer by premium income. A total of 40 per cent of the mainland shares went to 27 so- called cornerstone investors-mostly state-owned entities ranging from Cofco Ltd, China's main grain producer, to China Aerospace Science and Industry Corp to the operators of the Three Gorges Dam.
Despite the strong support, AgBank had scaled back its original IPO target of nearly 30 billion US dollars amid choppy markets and questions about its balance sheet.
"The central government is going all out to make sure (AgBank's) IPO is a success," Francis Lun, general manager of Hong Kong's Fulbright Securities, told AFP earlier.
"They're determined to make a good show. Otherwise they would lose face."
AgBank had a lacklustre debut in Shanghai on Thursday with its shares closing at 2.70 yuan (40 US cents) -- up 0.75 per cent from the IPO price of 2.68 yuan, but lower than the opening price of 2.74.
The Shanghai-listed shares closed 0.4 per cent lower on Friday at 2.69 yuan (39 cents).
AgBank's debut rise in both cities was modest compared with previous Chinese bank IPOs, many of which rose 10 per cent on their first day, according to Bernstein Research.
On Thursday, Beijing said that China's blistering economic growth had slowed in the second quarter.