Insurance News
- BoCom shares expected to make strong debut
Date: 15-May-2007 Sources: (Shenzhen Daily)
SHARES in Bank of Communications (BoCom) are expected to jump 52 percent when they debut on the Shanghai Stock Exchange today, analysts said, boosted by the bank's strong earnings growth and investor interest in new shares.
BoCom's Shanghai A shares are likely to trade at about 12 yuan on their first day of trading, against their initial public offering (IPO) price of 7.90 yuan. Four analysts predicted yesterday a range of 11.26 to 12.76 yuan.
That would give the A shares a premium of 44 percent over BoCom's Hong Kong-listed H shares, based on the H share price at midday yesterday, although analysts said the domestic trading price would be in line with the A shares of other banks.
BoCom, China's fifth-largest commercial bank, raised 25.2 billion yuan (US$3.3 billion) last month in the country's fourth-biggest domestic public offer by selling 3.19 billion new A shares, equivalent to 6.51 percent of its expanded capital. The IPO attracted a record 1.455 trillion yuan in subscriptions.
Analysts forecast that BoCom's earnings would see stable annual rises of 25 to 30 percent over the next two or three years, driven by China's rapid economic growth.
'Helped by HSBC's strategic investment, BoCom is also strong in risk control and is seeing a quick expansion in sales outlets,'said industry analysts Wu Yonggang at Guotai Junan Securities.
BoCom achieved a ratio of nonperforming loans to total loans of only 2.01 percent at the end of last year, compared with an industry average of 7.09 percent, company and regulatory figures showed.
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