Market slide may dent AgBank IPO valuation hopes
Thursday, 3 June 2010
HONG KONG/SHANGHAI, June 2 (Reuters): Agricultural Bank of China (ABC.UL) may struggle to get the kind of valuation it wants as it gears up to launch the world's biggest IPO into a market that has slumped by a fifth in just six weeks.
China's market drop is one of several factors prompting potential investors to query whether AgBank, China's fourth-biggest lender by assets, is worth the 1.6 times book value being bandied around in the market.
The bank, whose 350 million customer base is bigger than the population of the United States, is expected to open pre-marketing of its roughly $30 billion initial public offering within the next week, aiming to list its A-shares in Shanghai on July 15, and its Hong Kong H-shares a day later, according to sources, one of whom said the bank would seek Hong Kong listing committee approval on June 10.
Hong Kong's market is down 11 per cent since mid-April.
The China Daily newspaper reported Wednesday that AgBank could cut the size of the IPO if markets remain volatile, citing a source close to the bank.
Beijing-based AgBank's big domestic rivals trade at near or above 1.6 times book value.
China's market drop is one of several factors prompting potential investors to query whether AgBank, China's fourth-biggest lender by assets, is worth the 1.6 times book value being bandied around in the market.
The bank, whose 350 million customer base is bigger than the population of the United States, is expected to open pre-marketing of its roughly $30 billion initial public offering within the next week, aiming to list its A-shares in Shanghai on July 15, and its Hong Kong H-shares a day later, according to sources, one of whom said the bank would seek Hong Kong listing committee approval on June 10.
Hong Kong's market is down 11 per cent since mid-April.
The China Daily newspaper reported Wednesday that AgBank could cut the size of the IPO if markets remain volatile, citing a source close to the bank.
Beijing-based AgBank's big domestic rivals trade at near or above 1.6 times book value.