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Minsheng to list in HK
( 2003-12-11 00:18) (China Daily)

Although widely speculated fears are still not fading away that a listing in Hong Kong Stock Exchange could hurt its owners in the domestic A-share market, China Minsheng Bank Corp (Minsheng) shares were still stable Wednesday.

The group's share price ended at 9.08 yuan (US$1.09) per share, up 3.42 per cent boosted by China's central regulators move to allow domestic lenders to issue subordinated bonds and raising lending rates by up to 1.7 times its basic rate.

The Beijing-based bank, China's first shareholding bank with private investments, announced on Tuesday that it plans to file documents for an initial public offering (IPO) on the Hong Kong market.

The move finally clarified the widely speculated rumour that have been broadcast throughout the sector, and it could make Minsheng the first Chinese bank to be both listed on the domestic yuan-dominated A-share market and the Hong Kong market, which trades in HK dollars.

The bank said that the funds raised, to be about HK$7 billion (US$902 million) by issuing some 1 billion shares, will be used to shore up its capital base.

At the moment, Minsheng's capital adequacy ratio stands at 7.11 per cent, lower than the 8 per cent bottom line required by the Basel Accord.

And the funds raised will also be used to finance its network development and other new business areas, said the bank.

As of today, the eight-year-old bank has established 16 branches in economic hub cities, such as Beijing, Shanghai, Tianjin and Chongqing. With some 5,000 employees, the company has a total of 145 outlets nationwide.

Boosted by China's rapid economic growth, Minsheng's business has also developed rapidly, with 254.4 billion yuan (US$30.72 billion) in total assets by the first quarter in 2003.

However, Minsheng said the timing and pricing of the shares have still not been finalized, and will be based on the growth of the market.

However, in earlier interviews with China Daily, Minsheng President Dong Wenbiao said that the listing will be in the first half of 2004.

The recent performance of the Hong Kong market was believed to be a golden opportunity for Chinese mainland-based firms to list on the market, as those H shares have seen bullish growth recently.

And the successful IPO of the People's Insurance of China and the ongoing issuance of China Life, which have attracted enough interest to cover its order book by nearly 10 times, have further triggered anxiety on the part of domestic firms over fund-raising in the Hong Kong market.

However, the news sparked fears in the market over the interests of A-share owners, as the pricing of the shares in different markets will change after being listed.

To weed out the fears, Minsheng promised in its announcement that A-share owners will be compensated by measures such as giving all of the dividends generated in 2003 to A share-owners.

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