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HONG KONG : Agricultural Bank of China shares rose about 1.6 per cent in their Hong Kong debut on Friday, in a dual listing with Shanghai that could become the world's largest share sale.
The lender's shares opened at 3.25 Hong Kong dollars (42 US cents), above the initial public offering price of 3.20 Hong Kong dollars, and touched a high of 3.30 dollars in early trading.
The last of China's "Big Four" state banks to go public could raise a record 22.1 billion US dollars in a mammoth offering that has put a spotlight on investor confidence in China.
AgBank has not yet disclosed whether it will exercise an option to issue additional shares, a crucial factor in determining whether the sale would overtake rival Industrial and Commercial Bank of China's 21.9-billion-dollar IPO in 2006.
The total number of AgBank's IPO shares is not yet known and will be determined by its market performance.
"This is a historic moment," AgBank chairman Xiang Junbo told reporters in Hong Kong before the shares started trading. "(The IPO) is the first step of the internationalisation of AgBank.
"I am very satisfied. It's really not too bad -- 3.30 (Hong Kong) dollars," he said of the market price.
AgBank had a lacklustre debut in Shanghai on Thursday with shares closing at 2.70 yuan (40 US cents) -- up 0.75 per cent from the IPO price of 2.68 yuan, but lower than the opening price of 2.74.
China is on track to be the world's biggest IPO market this year with up to 300 companies expected to raise 500 billion yuan (close to 74 billion dollars), according to PricewaterhouseCoopers.
The bank's Hong Kong sale won the support of almost a dozen heavyweight investors, including Qatar's sovereign investment fund, British bank Standard Chartered and Hong Kong's richest tycoon, Li Ka-shing.
The biggest investor in the Shanghai issue was China Life, the nation's biggest life insurer by premium income.
A total of 40 per cent of the mainland shares went to 27 so-called cornerstone investors -- mostly state-owned entities ranging from Cofco Ltd, China?s main grain producer, to China Aerospace Science and Industry Corp to the operators of the Three Gorges Dam.
But AgBank scaled back its original IPO target of nearly 30 billion US dollars amid choppy markets and questions about the quality of its balance sheet.
The bank was founded two years after Mao Zedong's 1949 communist revolution, with a mission to lend money to China's poor farmers and distribute state money in rural areas.
Heavy exposure to China's poverty-stricken interior meant that mission was frustrated by decades of chaotic policies, leaving it awash with bad debt.
Despite Beijing's efforts to salvage AgBank, it is the weakest of China's big banks and it remains to be seen whether it can shift from policy bank to profit-oriented company.
AgBank's stock market debut Thursday came after Fitch credit ratings agency warned of growing risks in China's banking system.
The agency warned in a report that complex deals were obscuring hundreds of billions in loans and possibly concealing a new batch of bad property and infrastructure lending.
- AFP/jm
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