Top Biz News

CMB sets target for Hong Kong offering

By Lillian Liu and Zhang Jin (China Daily)
Updated: 2006-09-08 09:14

The bank, already listed in Shanghai, has received a warm welcome its institutional tranche, which accounts for 90 per cent of the IPO for corporate investors, was 12 times covered on Monday, the first day it accepted subscriptions.

The retail portion of CMB's IPO, earmarked for individual investors and accounting for 10 per cent of the total offering, will be open from tomorrow until next Wednesday.

People line up for brochures and application forms outside a bank to buy China Merchants Bank shares in Hong Kong September 8, 2006. [Reuters]

Its Hong Kong shares are scheduled to begin trading on September 22.

China International Capital Corp, JP Morgan and UBS, the three sponsors of the deal, on average estimated the bank's earnings would jump 48 per cent to 5.54 billion yuan (US$710.3 million) in 2006 and a further 36 per cent in 2007.

CMB's shares will attract at least HK$150 billion (US$19 billion) worth of retail funds, according to a median of four analysts surveyed by China Daily yesterday.

The local market hasn't seen any big IPOs for more than two months after the US$9.7-billion float of Bank of China in June.

"People have a pent-up demand for new shares," said Andes Cheng, associate director at South China Research.

Analysts also said Hong Kong-traded shares in CMB's peers such as China Construction Bank (CCB) and Bank of China (BOC) could drop in the coming days as local investors sell off stock to buy CMB shares.

CMB will be the fourth mainland bank to list in Hong Kong following Bank of Communications, CCB and BOC, as the mainland's financial sector reform makes progress.

The mainland's top lender, the Industrial and Commercial Bank of China, will follow suit to launch a US$19-billion deal in the first simultaneous listing in Hong Kong and Shanghai.