ABC's IPO approval gives banks a boost

08:41, June 10, 2010      

Email | Print | Subscribe | Comments | Forum 

The banking sector stock index saw gains Wednesday in response to expectations that the securities regulator would approve the initial public offering of Agricultural Bank of China (ABC) on the same day.

All 14 listed banks in Shanghai and Shenzhen saw their stock prices grow Wednesday. The average growth of the banking sector stocks was 3.94 percent at the market close. China CITIC Bank led, with its shares soaring 9.98 percent, close to their daily trading limit.

The rebound of the banking sector is a reaction to the green-light given by the China Securities Regulatory Commission to the IPO application of ABC, said Xu Guangfu, a strategy analyst with Xiangcai Securities, a brokerage firm.

The China Securities Regulatory Commission (CSRC) said on its website Wednesday af-ternoon it had approved ABC's IPO application.

Banking stock prices had plunged and remained at a low level following the government's tightening measures in the property market in April and recent moves by listed banks to raise funds by issuing more shares.

Institutional investors such as social security funds, insurers, mutual funds and private equity investors, rather than individual investors, pushed the overall banking prices upward, Xu said.

The regulator's approval of ABC's IPO restored the market's confidence in banking stocks to some extent, as the previous downturn had made the sector's market prices attractive, he said.

Meanwhile, strategic investors hope that ABC lists as soon as possible. China's National Social Security Fund has invested 15 billion yuan ($2.2 billion) in ABC, Reuters reported May 31, citing Ji Guoqiang, an official with the fund.

ABC plans to launch its IPO on the A-share market July 15 and H-share market the next day, stockstar.com, a business portal, reported June 3, citing an unnamed source from ABC's underwriters.

The reason that ABC got the nod from regulators so quickly was to ensure its IPO could move forward in July, because the government might raise the interest rate for depositors in autumn to curb inflation, which will erode banks' profits and attractiveness to investors, said Yang Li, partner of strategy and financing with Adfaith Management Consulting.

ABC will issue no more than 25.57 billion A-shares and 25.41 billion H-shares, including additional shares to be issued by its underwriters if they choose to do so, according to ABC's prospectus filed with the CSRC June 4.

The share price has not yet been settled.

Source: Global Times

(Editor:黄硕)

  • Do you have anything to say?

双语词典
dictionary

  
Special Coverage
  • Premier Wen Jiabao visits Hungary, Britain, Germany
  • From drought to floods
Major headlines
Editor's Pick
  • Giant red lantern lights up in Tiananmen Square to celebrate the coming National Day on Oct. 1. (Xinhua/Li Xin)
  • A ceremony is held in Taipei, southeast China's Taiwan, on Sept. 28, 2011, to commemorate the 2,562nd birthday of Confucius (551-479 BC), a Chinese thinker, educationist and philosopher. (Xinhua/Wu Ching-teng)
  • The world's first Boeing 787 Dreamliner for delivery arrives at Haneda airport in Tokyo, capital of Japan, on Sept. 28, 2011. The Boeing 787 Dreamliner, whose buyer is All Nippon Airways (ANA), will implement a flight of ANA on Oct. 26 from Tokyo's Narita Airport to Hong Kong in south China. (Xinhua/Ji Chunpeng)
  • A Libyan National Transitional Council (NTC) fighter shows what is believed to be human jawbone found inside a mass grave near Abu Salim prison in Tripoli, Libya, Spet. 27, 2011. The NTC on Sunday said they had found a mass grave containing the bodies of 1,270 people killed by Gaddafi's security forces in a 1996 massacre at Abu Salim prison in southern Tripoli. (Xinhua/Li Muzi)
  • Rescue workers and local residents search for survivors after a building collapsed in old Delhi, India, Sept. 27, 2011. At least 10 people were killed and 35 injured when an old three-storey building collapsed. More than a dozen people are still feared trapped under the debris, police said. (Xinhua/Partha Sarkar)
  • A visitor has flying experience in the windmill castle of Jinshitan National Holiday resort in Dalian, northeast China's Liaoning Province, Sept. 27, 2011. The castle is a 23-meter-high building with 21 meters in diameter. The castle uses wind tunnel to make objects floating in the air. It is the first indoor stadium in China, which enables people to have flying experience. (Xinhua/Zhang Chunlei)
Hot Forum Discussion