| |
| |
 |
| |
|
| |
|
| |
|
HONG KONG: A lacklustre debut for Hong Kong's biggest IPO this year – shares of China Minsheng Bank fell on their first day of trade on Thursday, weighed down by concerns over valuation and the need for capital raising.
There were six Chinese banks which listed in Hong Kong before Minsheng, and all of them posted an average of 13.5 per cent gain on their debut.
But it is clearly not lucky seven for Minsheng - its counter closed the day at HK$8.80 or 3 per cent lower than the IPO price.
Minsheng's much sought-after IPO had attracted more than 370,000 retail investors, drawing in nearly US$4 billion and making the IPO about 230 times oversubscribed.
But mainland banks have had a rough week on news that they may have to raise funds to bolster their capital adequacy ratios.
However, China's first privately-owned bank to list on the Shanghai Stock Exchange had said that it is not planning to raise any capital in the next three years.
Dong Wenbiao, chairman of China Minsheng Bank, said: "The Chinese economy will still be good next year. We're full of confidence and we're working to gain market share. That way, Minsheng Bank will develop to be healthier and its profit margin will rise."
The bank's capital adequacy ratio will rise to 12 per cent after the IPO, above the current reserve requirement of 10 per cent. Still, another factor weighing on sentiment on Thursday is Minsheng's valuation.
Its shares were priced at around 3.5 times its book value – higher than many of its bigger rivals like Bank of China or China Construction Bank.
Despite the lacklustre debut, market-watchers said Minsheng's post-market performance will likely not affect sentiment for upcoming IPOs in Hong Kong as there is still plenty of liquidity in the market.
Chinese windpower company Longyuan and Las Vegas' Sands China are among the mega offerings coming up before the year is out, estimated to raise up to US$6 billion.
- CNA/so
|
