HONG KONG: The Industrial and Commercial Bank of China (ICBC) raised US$19
billion in the world's largest initial public offering (IPO) after it priced the
Hong Kong portion at the top end of an indicated range on Friday, boosted by
overwhelming demand from investors.
Beijing-based ICBC priced its Hong Kong offering at HK$3.07 a share, the top
end of an indicative range between HK$2.56 and HK$3.07. At that price, the bank
will raise US$13.9 billion from the H-share market.
Meanwhile, the Shanghai portion of the IPO, the first to be launched
simultaneously with a Hong Kong offer, sold 13 billion A shares and was priced
at 3.11 yuan (38.9 US cents), near the top of its proposed range of 2.6 yuan (32
US cents) to 3.12 yuan (39 US cents). The mainland portion will raise US$5.1
Analysts and banking industry watchers expect a strong trading debut and are
optimistic about the ICBC's performance.
"In view of other mainland lenders' solid trading debuts, I think shares in
the ICBC will jump by 20 per cent on its first trading day (next Friday)," said
Marco Mak, head of research at Hong Kong-based Taifook Securities.
"Hong Kong investors have shown a strong interest in the mainland's banking
shares ever since Bank of Communications' public offering in Hong Kong last
year. With the ICBC's strong liquidity in the Hong Kong stock market and recent
favourable market sentiment, the debut will be pretty good," Mak told China
May Yan, vice-president and senior analyst at Moody's Asia-Pacific branch,
who specializes in the mainland's banking industry, said investors' enthusiasm
was fuelled by the Chinese Government's effort and determination to reform the
"Investors have been keen to invest in banks on the mainland, betting that
strong support from the central government will limit risks while allowing them
to tap the booming economy," said Yan.
The shares are due to begin trading simultaneously in Hong Kong and Shanghai
The ICBC's massive share sale surpasses the previous record set by Japan's
NTT Mobile Communications Network, which raised US$18.38 billion in what was
then the biggest IPO in the world.
The ICBC's mega deal values the largest lender of the "big four" State-owned
commercial banks at US$129 billion in terms of market capitalization, ranking it
seventh among banks in the world.
The mainland's second-largest bank and foreign exchange specialist, Bank of
China, ranks tenth with US$109 billion in assets.
The ICBC is the fifth mainland bank to float shares in Hong Kong. Investors
have rushed for shares in all five Hong Kong IPOs by the mainland banks since
last year on the back of banking industry success driven by the rapidly growing
The Hong Kong portion of the ICBC listing has drawn the largest amount of
orders ever from retail investors more than US$53.9 billion. Over 1 million
people, accounting for one in seven of Hong Kong's total population, placed
The overwhelming demand overtook the record set by Bank of China, whose IPO
in June attracted HK$280 billion (US$36.4 billion) in retail orders.