Banking News
- Beijing bank's IPO draws record orders
Date: 14-Sep-2007 Sources: (Shenzhen Daily)
BANK of Beijing drew more than US$250 billion of funds to its US$2 billion share sale in Shanghai, setting a record for subscriptions to an initial public offering (IPO) in the domestic market.
The massive demand for the shares may ease concern about the stock market's ability to absorb a slew of big IPOs expected over the next several months, as monetary policy tightens and the bull run in equities shows signs of faltering.
Bank of Beijing, in which Dutch bank ING Groep owns nearly 20 percent, said Thursday it had set the price for its sale of 1.2 billion A shares, or about 19 percent of its enlarged capital, at 12.50 yuan apiece, the top of an indicative range.
The bank drew a total of 1.90 trillion yuan (US$253 billion) of subscriptions from retail and institutional investors, beating the previous record of 1.63 trillion yuan set by shipping giant COSCO Holdings at its Shanghai IPO in June.
Bank of Beijing allocated 900 million shares to retail investors and 300 million to institutions, raising the ratio in favor of the retail tranche because of strong demand.
The pricing of the IPO valued the shares at 36.38 times 2006 earnings, roughly twice the valuations of bank stocks globally but well below the average of about 50 times for domestic banking stocks.
That appeared to ensure a strong debut for Bank of Beijing's shares, which are expected to list in Shanghai around next Wednesday.
Its record for total subscriptions is not likely to last long. A Shanghai IPO by China Construction Bank is expected to raise more than US$7 billion and draw more than 2 trillion yuan of subscriptions next week.
Sponsor Results:
