the world's largest public offering and its priced to go. The
lower-than-expected price range set for Industrial & Commercial
Bank of China's flotation on 27 October could still raise as much as $21bn, according to AP.
bank plans to simultaneously sell 10.8% of its enlarged capital in Hong
Kong and another 4% via A shares listed in Shanghai. It thus becomes
the first ever company to launch a public offering in two markets
Clearly, there is a lot riding on ICBC's IPO, not least a lot of national pride.
China's last high-profile IPO, of Air China, had to heavily cut its size because of lacklustre demand — see this EngagingChina story.
No such problems this time round according to China Daily's typically jingoistic report,
which says the state-run bank has only just started its road show but
has already attracted enough orders to cover the HK institutional order
book several times over.
To free up funds to get a slice of the
action, investors have been selling shares in the mainland's other
HK-listed banks in expectation that when trading begins, ICBC will
quickly move to a premium to its IPO price, just like its predecessors.
Nevertheless, according to The Times, the real winners in this deal
are the trio of western investors, Allianz, Goldman Sachs and American
Express, who together bought 8.45% of ICBC last April for $3.8bn. At
the top of the indicative IPO price range, their stake would be worth
$9.5bn. That's a return of 150% in six months — certainly beats
leaving your money in the bank.
Elsewhere on the financial services front:
HSBC plans to enter China's insurance sector before year-end, according to the Wall Street Journal ($)
. HSBC already owns a 19.9% stake in Ping An Insurance, China's second
largest life insurer, and 27% stake in their banking JV, Ping An Bank,
which recently received a licence to conduct yuan-denominated business. Ping An Insurance may also be planning a secondary offering next year, reports Business Week.
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