Banking News
- Construction Bank, COSCO eye A-share sales
Date: 18-Jun-2007 Sources: (Shenzhen Daily)
CHINA Construction Bank (Construction Bank), the mainland's No. 3 lender, and China's top shipping company, China COSCO Holdings Co., set plans Friday to raise up to a combined US$7.7 billion through listings on the red-hot Shanghai stock market.
The government has been encouraging the mainland's leading domestic companies to list shares at home in a bid to further develop its capital markets and give local investors more stocks to trade.
Mainland companies raised a combined 107 billion yuan (US$14 billion) in new shares on the Shanghai and Shenzhen stock exchanges by the end of May, compared with a record 165 billion yuan in 2006.
The listings come at an opportune time, as Shanghai's benchmark composite index has risen more than 50 percent this year, after more than doubling in 2006. The government lifted a one-year ban on domestic listings in May 2006.
Construction Bank, which raised US$9.2 billion in a Hong Kong initial public offering (IPO) in October 2005, will issue up to 9 billion domestic shares, which would have a market value of about US$5.7 billion based on the bank's closing share price of HK$4.92 Friday, an increase of 3.15 percent for the day.
COSCO is selling 1.784 billion domestic shares, or 20 percent of its expanded share capital, in a price range of 7.60 yuan to 8.48 yuan, it said in an exchange filing.
'China COSCO's IPO is almost certain to be priced at the top of the range and snapped up after its listing because its price range is set at such a big discount against its Hong Kong shares,'said analyst Chen Jinren at Huatai Securities.
COSCO shares in Hong Kong closed up 7.05 percent at HK$10.32, putting its domestic offering price range at an 18 to 26 percent discount.
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