China Construction Bank gains in HK debut
Updated: 2005-10-27 16:41
Shares in China Construction Bank rose by one
percent on their trading debut Thursday, which, with a huge US$8 billion IPO, is
the world's biggest in four years.
The stock, by far the most active on
the Hong Kong bourse, had been expected to rise only slightly, given recent
equity market weakness, a demanding IPO price, and the huge size of a deal that
left little pent-up demand for shares, the Reuters reported.
man stands next to branch of China Construction Bank in Shanghai on October 24, 2005.
The first of China's four, big state lenders to list ended the morning
session at HK$2.375, compared with an IPO price of HK$2.35. The shares traded in
a tight range between HK$2.35 and HK$2.375, with 9 percent of CCB shares
changing hands by mid-day.
The Hang Seng Index has lost 6.7 percent so far this month.
"After pricing its shares at the top end, the bank didn't leave enough on the
table for investors to take a profit," said Yang Liu, a fund manager at Atlantis
Investment Management. "In the long run, I still believe the bank has good
prospects," she said.
Construction Bank (0939.HK), China's third-largest lender, priced its
offering near the top of an indicated range, giving it a market value of nearly
$67 billion -- more than American Express and Deutsche Bank.
CCB Chairman Guo Shuqing said the pricing reflected keen interest from both
institutional and retail investors, who subscribed to over 9 times and 42 times,
respectively, the shares initially offered to them.
"Investors had huge demand for CCB shares," he told reporters during a
listing ceremony at the Hong Kong exchange.
China's biggest-ever IPO marks a milestone in Beijing's efforts to reform the
country's weak financial sector and sets the stage for listings expected next
year by rivals Bank of China and Industrial and Commercial Bank of China.