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| Bank Quadruples IPO Shares on Offer |
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Investors rushed to buy a share in the retail portion of China Merchants Bank (CMB) during its initial public offering (IPO), oversubscribing the sale by 150 to 200 times and signalling the popularity of mainland banks among international investors. In response the mainland's sixth-largest lender will quadruple the retail tranche of the offering, allocated to individual stock buyers and initially accounting for 5 percent of the total shares, to 20 percent, according to Declared the mainland's best retail bank by fund managers and analysts, CMB has offered 2.2 billion H shares, or 15.2 percent of its enlarged share capital, in The bank closed its order book yesterday and will price the IPO on Friday. Its shares will start trading in More than 10 Retail investors have also placed large orders for CMB shares in the past few days. Some experts estimate the IPO has attracted between HK$100 billion (US$12.8 billion) and HK$140 billion (US$17.9 billion) in bids. In the past few days, queues more than 100 meters long were seen in populous areas of Many local investors bought their shares through margin financing, a financial tool which helps investors buy shares with borrowed money. Because of the warm response, CMB is likely to price its IPO at the upper end of the proposed range, said Ricky Cheung, fund manager at Phillip Capital Management. CMB, which has already traded its shares in Analysts generally expect CMB shares to rise 6.5 to 7 percent on the first trading day. Some optimistic analysts even put the growth at more than 10 percent, citing Bank of China's strong debut in June. Bank of China's shares surged 15 percent in the first day of trading. "We expect the share price will see a 10 to 15 percent increase in the first day of trading, which is more or less similar to the performance of Bank of China," said Cheung. China Merchants Bank will be the fourth mainland bank to list in Hong Kong following Bank of Communications, The strong response to CMB's offering sets an encouraging precedent for the upcoming listing by top mainland lender the Industrial and Commercial Bank of China (ICBC), which could raise up to US$21 billion in a dual Hong Kong and Shanghai listing in October. The capitalization of ICBC could be the world's largest. "Investors are hungry for IPOs and mainland banks have been their favorites," said Stephen So, director of China Everbright Securities. (
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